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About: Economic history of the German reunification     Goto   Sponge   NotDistinct   Permalink

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On July 1, 1990, the economies of the two German states became one. It was the first time in history that a capitalist and a socialist economy had suddenly become one, and there were no precise guidelines on how it could be done. Instead, there were a number of problems, of which the most severe were the comparatively poor productivity of the former East German economy and its links to the economies of the Soviet Union and Eastern Europe, which were rapidly contracting. Two years after German reunification, industrial production in the east had plummeted by 73 percent from 1989 levels.