It has not yet been possible to correct structural deficits in all areas. A prime example is unit labor costs, which are too high compared to those in western Germany. Whereas gross income per gainfully employed person in the east has already risen to 74 percent of that in the west, productivity averages only 57 percent of the western figure. Excessively high wage costs and costs additional to wages are particularly burdensome to those firms which are still in the restructuring phase and have yet to gain access to the world’s markets. They do not, however, affect those investors who have built new production facilities and operate at a level of productivity that is very high by global standards.

The collapse of the large industrial combines left noticeable gaps in industrial production which new firms have not yet been able to bridge. Thus industry’s share of gross value added is only about 15 percent in the new federal states, whereas the figure in the western states is roughly 26 percent. It is expected that as economic growth accelerates again, it will be possible to continue correcting the structural deficits. However, the parties to collective agreements must do their part as well by exercising restraint in wage negotiations.