Germany And Its Reunification Conditions
THE outstanding event of 1990 was the reunification of the German Democratic Republic (G.D.R.) and the Federal Republic of Germany on October 3 after monetary union between the two states had preceded it on July 1. Inclusion of the East German economy is currently not yet possible. In the meantime the statistics for the five new Lander, Brandenburg, Mecklenburg-Vorpom-mern, Saxony, Sachsen-Anhalt and Thuringia have been converted to the West German system of general economic accounting but the results are still lacking. Production and staffing data are therefore given below for the eleven former and five new Lander, classified as West Germany and East Germany.
In 1990 the West German economy showed the strongest growth since 1976. Economic performance, measured as gross national product, rose in real terms by 4.6% to DM2,450 billion. In the previous year this growth had amounted to 3.9%. This unusual rise is mainly caused this time by domestic demand for which investment grew in real terms by 8.2% and capital investment by 12.1% (1989: 9.7%). This last value is the highest since 1970. Under the influence of yet another very mild winter, investment in building rose by 5% in real terms.
An economic boost in contrast to the previous year was private consumption which rose in real terms by 4.4% as against 1.7% the year before. This was the biggest increase since 1972.
In 1989, exports were the most important stimulus to the economy but this time it turned out that the external contribution had a dampening effect. Exports of goods and services, including deliveries to East Germany, went up in real terms by 9.5%. Imports put on even more with 10.9%. The contribution of exports to GNP (exports minus imports) decreased in real terms by 1% to DM71.8 billion by contrast with 1989, when a growth in real terms of 10.8% was reported. The exchange of goods and services between West and East Germany is still treated here as export and import.
The state of employment also showed a better result in 1990 than in the year before. The number of those employed in West Germany rose by 775,000. The number of those registered as unemployed was reduced by 267,800 to less than 1.8 million at the end of the year although once again a considerable influx took place of emigrants from Eastern Europe and people moving out of the former G.D.R. The level of unemployment as a proportion of dependent employed civilians amounted as an annual average to 6.4%. In the new Lander the number of recorded unemployed rose to more than 640,000 at the end of the year, which is equivalent to an unemployment level of 7.3%.
The creation of German unity had a less happy influence on the overall economic situation for the State: State expenditure in West Germany rose by 9.8%; income, however, rose by only 4.2% as against 7.9% the year before.
Consumption of primary energy in the whole of Germany amounted to 494.0 Mtce(1); it was thus 3.3% lower than in the previous year. Because of the economic recession, East Germany had a sharp decline of 18.1% in consumption to 105 Mtce. In contrast to this, there was a slight increase in West Germany of 1.6% to 389 Mtce. The most important source of energy was oil with a 35.8% share in the total energy consumption and an increase of 3.8% to 177.0 Mtce. Second place in the overall German balance sheet was held by lignite with a consumption of 104.1 Mtce or 21.1% (1989: 23.5%). In the following places were coal and natural gas with 15.6% each (1989: coal 15.4% and natural gas 15.1%). Nuclear energy showed a further decline in the consumption of primary energy with a share of 10.0% (10.5%), as did miscellaneous sources with 1.9% (2.1%). In West Germany, by comparison with the previous year, the following was the distribution of consumption for primary energy: oil, 40.9% (40.0%); coal, 18.9% (19.2%); natural gas, 17.5% (17.1%); nuclear, 12.2% (12.6%); lignite, 8.3% (8.5%); miscellaneous, 2.3% (2.6%). The increased oil consumption is less attributable to the continued growth in the economy than to a rise in demand from private consumers whose high oil stocks from the year before were replenished. Following increased use of coal-fired power stations higher consumption of coal was reported. On the other hand, there was a decline in the requirement for coal and coke by the steel industry and the heating market.
The breakdown of energy consumption in East Germany with the values corresponding to the previous year were as follows: lignite, 68.6% (68.4%); oil, 17.1% (13.6%); natural gas, 8.6% (9.3%); coal, 3.1% (4.2%); nuclear power, 2.1% (4.1%) and miscellaneous, 0.5% (0.4%). Apart from oil, all energy sources were in sharp decline. Thus lignite fell in all areas of application but nevertheless covered more than two-thirds of the total consumption. East Germany’s consumption of oil increased greatly during the year, particularly as a consequence of rapid increase in car usage after the monetary union. The decline in nuclear power by two percentage points is attributable to shutting nuclear power stations.
Sales of German coal went down by 7.8% to 71.1 Mtce. The decline was concentrated in the steel industry at home and abroad. Resulting from a diminishing steel economy, deliveries of coal and coke to the German steel industry fell by 10% to 20 Mtce and deliveries to the rest of the European Community by 24.6%. On the domestic heating market further sales losses had to be borne, down 10% to 3.6 Mtce. Only the earnings of the electricity sector remained nearly the same with 40 Mtce.
Output from Germany’s 27 coal mines declined by comparison with the previous year by 1.7% to 69.8 Mt. After the regulatory reductions in output agreed in 1987, the number of those employed in coal mining was further reduced to just 130,300 workers and staff at the end of the year — that is 8,600 fewer employees than at the end of 1989. Productivity in underground mining rose to something over 5,000 kg of marketable output per man/shift (MS) (1989: around 4,800 kg/MS). Over the last 10 years the average daily output from German coal mines went up from around 9,500 to 10,450 t of marketable output.
The first aggregated annual output for lignite mining in Germany showed a fall of 13.2% to 357 Mt. In the West, production declined by 2.1% to 107.6 Mt. It rose in 1989 by 1.2% to 109.9 Mt. Of this, 102.2 Mt came from the Rhineland, the rest mainly from the Helmstedt (4.3 Mt), Hessen (1.0 Mt) and Bavarian fields. In East Germany, production fell by 17.2% to 249 Mt, split between the Lausitz (168.1 Mt) and the Bitterfeld (80.9 Mt) fields. Clearance of spoil amounted to 1,588 million [m.sup.3]; in the West German fields it went up by 1% to 448 million [m.sup.3], in the East German fields it fell by 14.8% to 1,140 million [m.sup.3].
By far the largest proportion of lignite production went as crude lignite to public power stations (188.1 Mt), in the West with 90.2 Mt 1.7% less and in the East 97.9 Mt 13.8% less than the year before. Although the manufacture of briquettes for domestic fuel in the West German fields rose by 11.1% to 2.4 Mt, an overall loss in sales was experienced, down 18.9% to 40.0 Mt. The decline in the Lausitz field amounted to 10% and in the Bitterfeld field to 31.5%. More serious was the loss of deliveries for dust-firing by a total of 17.4% to 3.8 Mt. Manufacture of lignite dust in the Rhineland field remained roughly at the previous year’s level (2.5 Mt), but it fell in the Lausitz field by 35.7% to 700,000 t and in the Bitterfeld field by 38.8% to 600,000 t.
The number of those employed in West German lignite mining fell by 307 staff and labourers, equivalent to 1.7%, to 17,760 particularly because of laying off of miners in worked-out pits in Hessen. At the end of December the number employed in the two East German fields amounted to 107,762, thus for the whole of Germany to 125,215 employees.
Iron Ore and Steel
Production from the last iron ore pit in Germany, Wohlverwahrt-Nammen belonging to Barbara Rohstoffbetriebe GmbH in Porta Westfalica fell by 18% to 84,000 t. The stockpile was reduced by 8% to 44,000 t. Productivity at the mine amounted to around 90 t/MS and thus remained unaltered from the previous year’s performance level.
At the end of the year, 229 people were employed in iron ore mining, of which 171 were in the former Konrad pit which is set up as a dump for storing mildly radioactive materials.
With 38.4 Mt West German steelworks manufactured around 6.4% less crude steel in 1990 than in the year before. Thus the continuous pouring process won further significance so that this technique’s share amounts to 92%. Pig iron production was reduced compared with the previous year by 8% to 30.1 Mt. The reasons for the decline in the steel industry were predominantly the surplus in the European Community, rapidly falling demand from third parties such as China and the Soviet Union and, moreover, price competition following continued weakness of the U.S. dollar.