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German unification: the cost v benefit

Friday, October 02, 2015 - 01:46

As Gemany celebrates 25 years of reunification this weekend, most think the estimated $1.9 trillion bill for bringing east and west together was worth it. But as Tim Graham reports, Germany may have to go on paying for some time yet.

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Think German reunification, and you probably don't think of this tiny village. Straddling the country's east and west, Moedlareuth is also known as little Berlin. Remnants of the past aren't hard to find here, nor are the anecdotes. Thomas Reinhard lived in the border region when the wall came down. (SOUNDBITE) (German) COMPANY TECHNICIAN, THOMAS REINHARD, WHO LIVED IN THE BORDER REGION AND WAS 28 WHEN THE WALL CAME DOWN, SAYING: "We could neither go into our own forest nor could we go mushrooming. Everything was prohibited. That was a bother." The cost of reunification has been estimated at about 1.9 trillion euros. Free speech and freedom to travel are undoubted benefits of unity. But that's been tempered by hardships like high unemployment in the east. Indeed, Germans still express frustration at how far behind the eastern economy lags. So has it all been a worthwhile exercise economically speaking? Theo Waigel was Germany's Finance Minister in 1989. (SOUNDBITE) (German) FORMER GERMAN FINANCE MINISTER THEO WAIGEL, SAYING: "Had we told the public at the time how much it would cost over the next 25 years, the joy might have been a bit clouded." Quarter of a century on, Germany of course faces a major new crisis: what to do about the tens of thousands of refugees and migrants it's welcomed. Deutsche Bank expects the influx to boost German growth by as much as half a percentage point next year. In some ways it's a case of back to the future, according to CMC analyst Michael Hewson. (SOUNDBITE) (English) CMC ANALYST, MICHAEL HEWSON, SAYING: "Germany's probably still paying for reunification. It's probably going to continue to have to pay for closer European integration if the EU is to hold together." German reunification has, at times, been described as a shaky marriage. Like all unions, it might take a few more years of hard work.

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German unification: the cost v benefit

Friday, October 02, 2015 - 01:46