The economic unification of Germany : Germany :: Facts About Germany

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The economic unification of Germany : Germany

Since the beginning of 1995 the new states have been included in the financial equalization system amonj the federal states, from which they received approximately DM 57 billion in 1995. Prior to this the “German Unity Fund” had ensured their financial capacity to act.

in order to compensate for the massive costs incurred as a result of recovery and restructuring in the new states, as well as to prevent the Federation’s net new borrowing from assuming boundless proportions (debt service now consumes almost 20 percent of total federal resources), since 1 January 1995 a solidarity surcharge has been levied in Germany amounting to 7.5 percent of wage, income and corporation taxes.

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