"Economic and Monetary Implications of German Unification"

[From the Introduction]. The fall of the Berlin Wall, on November 9, 1989--followed in short order by the creation of the German Economic and Monetary Union, in July 1990; the political unification of West Germany (FRG) and East Germany (GDR),in October 1990; and the all-German election two months later--was the cause of great euphoria and jubilant celebrations. "Since then, however," a knowledgeable German obsemed recently, "the bridegroom has realized that he married a good-looking but very poor and sick girl."(l) Such a statement is highly instructive, for it provides a telling commentary on existing realities--the immense gap that divides the economies of the western and eastern parts of a united Germany. And by implication, it points to the exceedingly difficult task of welding two very unequal societies into a single nation strong enough to pursue a major global role. In fact, the sharp economic (as well as social) contrasts between the confident groom (FRG) and the willing but anxious bride (GDR), on the eve of their marriage, are by now well documented and require only brief mention here.(2