QUESTION:  “Reunification may have made reform more urgent, but globalization would have impacted on the German political-economy with or without reunification”.  Discuss.


 


            Reunification, as the process of coming together or bringing people or faction together again after they have been divided, may impose both affirmative and unconstructive changes to a state particularly in its political and economic systems. One of the most prominent reunification in world history is that of Germany which occurred in the 3rd of October 1990. In Blacksell’s word, ‘German reunification has undoubtedly signaled one of the most significant changes in the political geography of Europe’ (1997). Prior to the Second World War, there had been at least six different states called Germany with own raison d’être, population, society, economy, government and international boundaries. Further, 1849 marked the creation of two German states namely Federal Republic of Germany (FRG) and German Democratic Republic (GDR).


 


            FRG refers to a federation equipped with a Constitution that outlines strict division of political power, aiming to represent all Germany whereas GDR was a centralized and Communist totalitarian state with legitimacy that is founded on the complete break with the past. According to Blacksell (1997), FRG never recognized the GDR as a state due to the fact that it was not legitimized by free and democratic elections. GDR, on the other hand, always recognized FRG’s formal legitimacy. In brief, the collapse of the Berlin Wall, which served as a symbol of political power that dictates where people could and could not go, had been effective in reunification between FRG and GDR. GDR was admitted to the former along with the city-state Berlin (Zelikow and Rice, 1996).


 


            Both politically and economically German reunification have had required reforms and restructuring, nevertheless, recent geo-political changes fueled by globalization is also shaping the German landscape. In what specific ways and to what extent globalization impacted Germany under or without reunification is central to this paper. It would be important to note that FGR or the West Germany enjoyed political and economic prosperity compared to that of East Germany or the GDR. Reunification would be then riskier for FGR that than of GDR especially when globalization is increasingly becoming felt intra-borders.


 


            An online article entitled Germany, Globalization, and the European Union claims that the effect of German unification is apparent on the German position within the European Union (EU) system while also taking advantage of the new system. The growth of EU is one manifestation of globalization. Germany is now one of the significant leaders in the entire Europe because of German policy and its cooperation with the Union which is dubbed as the largest single market in the world. As such, globalization has enabled information transfer and widened opportunities through producing economic growth within the region, increasing trades across borders. East and West Germany would have not been able to reap the benefits of globalization individually if reunification did not materialize.


            Further, one might even argue that globalization started in the pre-reunification West Germany from the moment of rebuilding of the region as aided by the United States, leading to West German economic strength. In this context, globalization is considered as the growing integration of economies and societies around the world. East Germany, on the other hand, was left on economic catastrophe after the World War II. Collier and Siebert (1991, p. 196) asserted that the consumption expenditures of working West German families were double that of working East German families. West Germans also enjoyed living standards twice as much that of East Germans as well. Communism negatively impacted East German social, economic and political systems while West Germany thrived.


 


West Germany was considered the center of Europe and it became one of the richest and most commercial countries in the world, as according to Germany, Globalization, and the European Union. West Germany economy functioned as the major trading partner for the US. With this, it would be easy to conclude it would be difficult for West Germany to prosper without reunification especially because the strength acquired from the rebuilding initiatives made it possible for it to economically prosper on its own and be admitted in the European Union. Reunification therefore has more benefits to East Germany that with the West. Economic opportunities were extended to then East Germany and the East benefited from the EU enlargement and pre-established West by means of widened trading and labor opportunities.


 


Sinn (1999) states that the reunification has not been solely an internal affair but it has accelerated the unification of the whole Europe as well and its economic consequences have severely affected the rest of the Europe. Such acceleration materialized because of the widely held belief that only a tight integration of Germany into the European Community so that it would make it possible to control and influence the economic power center which was thought to have been created by German reunification (p. 33). Ironically, the ease with which the unification of Germany has swept away the political barriers to a European currency union contrasts sharply with the economic obstacles that unification may have created for such a reunification (p. 34).


 


Minus reunification, globalization will be also experienced due to the fact that Germany is occupying a key position in central Europe and this brings new responsibilities. The West also shared borders with other independent European states including Austria, Belgium, the Czech Republic, Denmark, France, Luxembourg, the Netherlands, Poland, and Switzerland, making possible high levels of trading and exchange of labor. Geographically, Germany also occupies a key strategic position aside from being the most powerful economically and with 79.7 million total numbers of population then of diverse skills, expertise and competencies. The West possessed an unparalleled scope to influence the course of events in Europe as a whole (Blacksell, 1997).


 


Manus (1997) also cited that during reunification, the then East Germany has made measurable progress through the assistance of its Western counterparts. To wit, wages have risen, housing conditions have improved and consumer goods and services were readily available. Economy has also benefited where there were only 20, 000 private businesses and now half a million. Reunification also negatively impacted East Germany. For instance, the drawback is that it led to 18.3% unemployment rate because of privatization which the Western Germany capitalist allowed to happen. Nevertheless, though reunification may have not taken place, the East will still be vulnerable for more globalizing tactics of the US considerably because the Articles of Confederation were eyeing those with economic potential and the East is one among them.


 


Hamilton and Quinlan (2008) made mention that many areas of Eastern Germany still struggles twenty years after reunification and that globalization did not create those problems but it has exposed them. Economic transformation could be considered shallow and haphazard because of reunification, which may be avoided if reunification was not pursued in the first place. The authors also stresses that the German economy has been saddled with the costs of German reunification. Various rationales are to account for this. West-East transfers are financed by the government and this had profound impact on the German budget. Workers also financed such transfer payments to Eastern Germany through social security payments that resulted in a dramatic rise in non-wage labor costs. Broadly, this has affected the competitiveness of German companies.


 


Globalization, as Hamilton and Quinlan (2008) put it, in not responsible for the pressures and may in fact offer solutions. The paradox is that globalization does subjected demographic challenges to unified Germany. To put things in perspective, an older German workforce in a smaller and older European labor pool is exacerbating skills shortages and regional disparities while also exposing mismatches between available jobs and relevant skills. Skills gap in German economy is increasing because of immigration where the inflow of workers to West Germany from the East amounts to 1.7 million. The West is economically viable compared to the East which requires more skilled workers thus reunification had hampered the economy of the East the more.


           


It would be also critical to note that the diffusion of ideas may happen even without globalization due to the fact that since economic opportunities such as low wage and living standards was present then. Shifting business then in the East is plausible. Globalization in the East could also because of the weaker political system which means weaker labor policies and weaker unionism. These situations are attractive for companies so that the business that will be shift into their borders would be more profitable. To wit, even the East did not involve in any unification schemes the East will still be globalize considering both its economic and political status pre-reunification.


 


However, in terms of political changes in light of the globalization, East Germany also benefited along with the West. The unified Germany has taken a leadership position in EU’s political infrastructure; Germany holds most representation. Under the new practice democracy was spread to East Germany, escaping from the hold of communism which could be perceived as oppression of thoughts and ideas of East Germans. If not for reunification, East Germans will endure the drawbacks of communism until today. Such emancipation was also coupled with yet another benefit of reunification for both East and West Germany. Although this is more abstract, diffusion of culture took place and the exchange is between the East and the West (Thomcancek and Niven, 2001).


 


Sommer, one of Germany’s foremost authorities on international relations and strategic issues, offered new perspectives on German reunification.  He contended that Germany has lost strength as a result of the reunification. The new Germany had acquired the territory, population and economic resources of the former East Germany but will be absorbed by the process of integration for the next 20 to 25 years. Germany is also simultaneously beset by the problems of both the West and the East as it struggles to transform a communist-style economy while trying to compete in the age of globalization. Dramatically, the reunification had changed Germany’s standing in the world from a low-debt country before reunification into becoming a high-debt country after (Manus, 1997).


 


            While large cities reaped the advantages of a capitalist economy, small cities enjoyed traditional German customs. At the fall of the Berlin Wall, Thomancek and Niven (2001) claimed there had been a struggle to integrate East with West and vice versa into a commonality (p. 79). Globalization was taking hold and this had brought about an import of ideas from and to both East and West and also from the US and France. Germany was struggling to reestablish own culture and the West imported old Germanic culture from the East which had survived the rise and fall of communism. Economic and political thoughts were merged and with the injection of other foreign thoughts.


 


            The direct influence of globalization on the newly formed German nation and its culture after reunification is an aspect that acquires the less attention. Eichmanns (2007) emphasized that the reunification which equates with the downfall of socialism had opened the way for uninhibited intrusion of globalization into the East. Hence, the East Germany became a microcosm of the globalizing trends. The concept of Heimat or homeland or simply Germanness was jeopardized because of the increased importation of old traditions which could have been protected if not for reunification and eventual widespread globalization in the region.


 


            The report proved that even before reunification, globalization is already happening particularly in the West Germany because of the continuous assistance of the US which led to the extensive influence on the EU. East Germany could be also globalize minus the need to reunify because of its attractiveness to foreign companies including its weaker political and economic systems and low operating cost. However, if not for reunification of East into the West, the East was evidently a prey of globalization. There are significant economic changes for the East but there are also detriments. Same with the West, it benefits more politically compared to the East but economic changes are more apparent on the East because of the fact that prior reunification the East was more economically deprived.


 


 


References


 


Blacksell, M. (1997). State and nation: Germany since reunification. Europa, 3(5).


 


Collier, I. and Siebert, H. (1991). The Economic Integration of Post-Wall Germany. American Economic Review, 81(2): 196-201.


 


Eichemanns, G. (2007). Germany in the Age of Globalization. University of Washington, Department of Germanics.


 


Germany, Globalization, and the European Union. Retrieved on 25 April 2009, from http://international.tamu.edu/eunotes/Vol3_Iss4a.doc


 


Hamilton, D. S. H. and Quinlan, J. P. (2008). Germany and Globalization. Washington, D. C.: Center for Transatlantic Relations.


 


Manus, S. (1997). Perspectives on German Unification – Theo Sommer Shares International Expertise.


Sinn, H. S. (1999). International Implications of German Unification. In A. Razzin and E. Sadka, The economics of globalization: policy perspectives from public economics, (pp. 33-57). Cambridge University Press.


Thomcancek, J. and Niven, B. (2001). Dividing and Uniting Germany. New York, NY: Routledge.


 


Zelikow, P. and Rice, C. (1995). Germany Unified and Europe Transformed: A Study is Statecraft, Harvard University Press, Cambridge Massachusetts.


 


 


             


 



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