Economist Calls German Unification an Economic Disaster

The president of the Ifo Institute, Hans-Werner Sinn has come under renewed criticism for his call to keep wages in eastern Germany low. The State Premiere of Saxony-Anhalt Wolfgang Böhmer called his advice "a wrong step in the wrong direction." In a television interview, Sinn labelled the reunification an economic disaster. He said "the economic development of the former East Germany has been worse than the worst predictions by pessimists at the time of the reunification." To make eastern Germany more attractive to German manufacturers, he recommended lower wages which would induce German firms who are currently outsourcing to Eastern European countries to start manufacturing in eastern Germany. He added that the state could help firms who are planning to set up operations in eastern Germany.