The Current Situation : Germany

By international standards, the new federal states are now an attractive industrial location for foreign investors. This can be seen from the investments of some 1,700 foreign firms from about 50 different countries. Among them are a number of world-famous international corporations such as General Motors (U.S.A.; automobile industry), Elf Aquitaine (France; energy industry), Dow Chemical (U.S.A.; chemical industry), Advanced Micro Devices (U.S.A.; computer industry), Samsung (South Korea; electronics industry) and Kvaerner (Norway; shipyards). Foreign investors find a modern infrastructure in the new states. The level of education, motivation and flexibility of the work force is acknowledged to be exemplary. Moreover, foreign investors receive the same financial incentives as domestic investors, incentives which are particularly high by European standards.

Progress in the economic recovery process is reflected in dynamic rates of growth. Until 1995, the economy in eastern Germany grew very rapidly, posting real growth rates of 8.9 percent in 1993, 9.9 percent in 1994 and 5.3 percent in 1995. These high rate increases were primarily attributable to the construction boom of the first few years following reunification. In the meantime, the situation has begun to normalize, and growth rates in the construction sector have declined.