European Stars and Stripes (Newspaper) - July 14, 1990, Darmstadt, Hesse                                Unification Boom Berlin seen As economic two Germany at a glance West population Gross emotional product per capita Gnu inflation. Defense spending of Gnu military strength exports imports average wages workforce foreign workers education. % of budget infant mortality per 1,000 births life expectancy abortions per 1,000 women religion Catholic protestant households with 61 million $1.32 trillion $21,673 2.3%. 3.3% 495,000 $547 billion $369 billion $22,024 29,7 million 4.5 million. 9% 75 years 15 efts 16 million $135 bilion $7,105 2.0% 6.3% 173,000 $80.5 bilion $60.7 billion $7,744  90,000 is 8 42%-41% 6%-33% cars 83% 48% indoor toilets 95% 60% telephones 92% 7% color to 86% 39% refrigerator 82%. 99% Freezer 77% 43% ass Susan Harris epicentre of Europe by Steven greenhouse new York times. O n both sides of the crumbling remnants of the Berlin Wall signs of an economic Boom Are j everywhere a direct result of the merger of the East and West German economies. Seventy Yards from the Brandenburg Gate Yamaha has opened a showroom to sell sleek polished motorcycles and electronic organs to the More prosperous East germans of tomorrow. On Kurfurst Endami a major West Berlin commercial drag there is construction galore and developers Are Rushing to change their residential building permits to office permits to Cash in on the unification Boom. A the still unfinished Dorn hotel in East Berlin is seeking to rent out luxury 1,000-Square-foot offices to Western companies for $9,000 a month a More than 100 times the rents under communism. Rents for prime office space in West Berlin have jumped 60 percent since the Wall opened in november. Not Only is a United Germany destined to become an Industrial Power dominating Western Europe a Economy even More than West Germany has but Berlin seems Well on its Way to becoming the economic epicentre of Europe. Indeed a reunited Berlin of 4 million people will by itself have an Economy As Large As the Gross National product of Portugal a a a everyone seems obsessed about what s going on in this city/1 said Juergen Bischoff head of the Berlin office of Jones Lang Wooten an International real estate firm. A a we have japanese companies coming in and we have american developers looking around for the first time.�?�. To be sure reunification is fraught with uncertainty especially for East germans who worry that neither their jobs nor their enterprises will survive in the harsh yet promising capitalist Era. Still a United Germany will clearly be the Foremost economic Power in both Western Europe and Eastern Europe. With Germany s larger stature the importance of the Mark in the worlds currency markets will grow. Unification will also make Germany s Industrial giants even stronger in the Long term although for a few years non German companies May find it easier to compote with the germans because German Industry will be preoccupied with expanding into the East. East Germany s economic output is. Estimated to to around 10 percent of West Germany a and the United Germany will have a Gross National product of More than a trillion dollars a year thus fusing the two Germany will produce an Economy that is More than 25 percent larger than France s or great Britain s. With East Germany s economic output expected to double in the next seven to 10 years Germany s Lead will grow even larger. A Garter the transition period the German Economy will be bigger and stronger a said Meinhard Miegel director of the Institute for economics and social policy in Bonn. A the German Economy will have greater volume greater Selling Power greater exporting  West Germany also stands to gain the most economically from the opening up of Eastern Europe. The Federal Republic already accounts for two fifths of the West s Trade with Czechoslovakia Hungary Poland and Bulgaria a and that is before East Germany s booming Trade with those countries is included. Quot Germany will be the major economic Power in Eastern Europe Quot Miegel said a Eastern Europe will be primarily a German  the German Mark is already the Anchor currency in the nine nation european monetary system and Austria Belgium and the Netherlands have pegged their currencies to the Mark. The Mark has become the leading hard currency in Hungary and Czechoslovakia. What is More East Germany s Trade links with the soviet Union and West Germany s pledge of Aid to Moscow will help establish the Mark As the most important Western currency in the soviet Union. Some economists say that As a result of the european Community a push to adopt a single currency the Mark could someday become the currency of the Community a 320 million people. Quot if you accept that Europe will be a much More integrated Market in a decades time whichever currency becomes its official currency will be a very big rival to the Dollar Quot said Richard roid chief european economist for us Phillips amp Drew in London. Many germans grow quickly defensive with All the talk about German economic might. They say that a United Germany will be powerful but just one among Many countries in Europe and that it will be Europe not Germany that is the superpower. A United Germany will have 78 million people and they say it cannot possibly Dwarf France Britain or Italy each of which has More than 55 million people. Quot eighty million people Are not enough to be a superpower Quot said Norbert Waller chief economist at Deutsche Bank. Nonetheless lingering fears that a unified Germany will be too dominant Are causing Many europeans to Call for accelerating the process of european integration in order to submerge Germany More deeply into Europe and to create a european Germany rather than a German Europe. Integration they contend would make Germany More like California the first most populous and most economically powerful among equals but still an equal. Unification certainly raises fears among some non German companies which Are worried that German corporate giants will quickly expand to become overpowering competitors. Still Mahy germans Point out that other nations should generally Benefit from German Industrial strength. Indeed other Western countries pressured West Germany for years to Speed up its sluggish Economy to help pull Europe a and the world a along. So now reunification promises to turn West Germany into a fast moving locomotive for Europe s Economy in the Early 1990s, growing at a brisk rate of 4 percent a year Many economists predict. There Are also fears that this higher growth will Lead to higher inflation Quot reunification will add a full percentage Point to West Germany a annual economic growth Quot said Manfred Melzer an economist with the German Institute for economics in West Berlin the germans also predict that reunification will produce a second German economic Miracle in East Germany which will import $25 billion More in goods a year than it would have without reunification and the Swap of West German Marks for East German Marks. All the cars computers and cameras the East germans import will come from Many countries not just West Germany. Moreover analysts say that since German Industry is already operating near full capacity unification will leave plenty of business to go around for French British and american Industry. Quot since the West germans Are already close to full resource utilization they will have to import a lot of resources to help East Germany Quot said Paul Horne european economist for Smith Barney Harris Upham amp co Quot that will help France the . And other Western countries increase their  accordingly the next few years could provide non German businesses with a window of Opportunity to compete against the germans a and to expand in Germany and Europe. But once the decade Long process of rebuilding East Germany is Complete the companies of a United Germany could Well emerge As More potent More competitive forces. Quot in the Short term the germans will be very Busy taking care of East Germany Quot said Carlo de Benedetti chairman of ing. A Olivetti amp company spa the italian office machine and computer concern. Quot what we should remember is that ultimately we will have to compete with competitors that Are  indeed West Germany s muscular corporate heavyweights Are already trying to use unification As a vehicle to grow even bigger and stronger. Deutsche Bank a West Germany a largest Bank Hopes to open 250 new branches in East Germany and capture 20 percent of consumer deposits within the next three years. The Frankfurt based Bank is investing More than $500 million to expand in East Germany and As a result could quickly increase its assets by More than $10 billion. V a a it san additional Market of 16 million people Quot said Georg Krupp director of Deutsche Bank a East German operations a in the Long term that s very  Volkswagen a which boasts that it is no. 1 in Auto sales in Europe plans to increase production 10 percent by investing $2.9 billion in a 250,000-car-a-year Assembly Plant in East Germany. Mannsmann a company based in Dusseldorf West Germany that is Europe s largest machinery making group has signed letters of intent with 30 East German companies to establish different types of cooperation. Quot we have a Broad Range of activities and in virtually every sector there is a partner for us in the Cdr Quot said a Mannsmann spokesman. Page 16 a a a the stars and stripes saturday july 14, 1990