Merkel looks at ways to tackle Germany’s east-west disparities

In a video webcast, Merkel said the government needed to look at ways to address the structural differences that would remain after a solidarity tax introduced in 1990 to support poorer eastern states runs out at the end of 2019.

“We continually have to ask how we can balance systemic, structural differences between east and west in the area of research, in regard to the headquarters of large companies, and in the field of structural unemployment,” Merkel said. She gave no details about specific programmes.

Merkel, who grew up in former East Germany, will discuss the issue when she meets with the premiers of the five former east German states on Wednesday.

In a statement releasing Merkel’s comments, her office said, “The federal government wants to use a programme of subsidies to help ensure equal living standards in all of Germany.”

Merkel said in the webcast that per capita gross domestic product in the former east was now around 73 percent of the level seen in the west, and tax revenues were also uneven. Pensions were around 96 percent of the western level, but would not reach 100 percent until July 2024, she said.

Merkel’s conservatives and the centre-left Social Democrats, both worried by a rightward lurch in September’s national elections, have agreed to focus more on addressing structural disparities in the former east, and other structurally weak parts of Germany.

The anti-immigrant populist Alternative for Germany (AfD) party made big gains in the eastern states in the September national elections that gave the party seats in parliament for the first time, making it the first far-right party to win seats in the lower house since the 1950s.

In the eastern state of Saxony, for instance, the AfD was the overall winner, even beating Merkel’s conservatives.