In the edition of the BBC’s Question Time programme aired on Thursday 17 February 2022, former Chief Executive of Siemens UK, Jürgen Maier, addressed the British government’s “levelling up” ambitions after the publication of its white paper on the issue in early February. Maier concluded that the “few hundred million [pounds] maximum” allocated by the government to meet its 2019 election manifesto promise would not be nearly enough. He added, pointedly: “I’ve seen proper levelling up done when Germany reunited with East Germany.”
“Germany has succeeded in levelling up”
This was not the first time that German reunification had been mentioned in relation to Prime Minister Boris Johnson’s plans for levelling up the country. On 15 July 2021, Johnson gave a flagship speech on his vision while on a visit to the UK Battery Industrialisation Centre in Coventry. In the speech, he cited Germany as a country that had “to a large extent succeeded in levelling up.”
Johnson recalled a visit he had made in 1990 to the regions that made up the former East Germany. He remembered his amazement at the extent to which the east’s economy was lagging behind that of the states in the old West Germany. Indeed, back then, productivity levels in the eastern German economy were only 60 per cent of those in the west.
But now, Johnson asserted, GDP in Germany’s east was higher than that of the North East, Yorkshire, the East Midlands, Wales and Northern Ireland. The message was clear: if Germany can achieve the Herculean task of levelling up its east, then the UK can level up its deprived and underdeveloped regions too.
German levelling up cost £71 billion annually
What Johnson failed to mention is the sheer amount of investment it has taken to improve the situation in the former East Germany. Between 1990 and 2014, the German government invested around £71 billion annually in the programme to level up the east. Last year, the Conservative government allocated a comparatively paltry £4.8 billion to its Levelling Up Fund.
Moreover, Johnson’s claim that Germany has succeeded in levelling up is only true in so far as a certain amount of economic improvement and development have been achieved. The economy in the country’s eastern regions has, however, still not been brought entirely into line with that of the west.
The German government’s annual Report on the Status of German Unity for the year 2020 found that GDP in the areas that comprised the former East Germany was still only around 77 per cent of that of the old West Germany. Moreover, the average net hourly wage in the east was €20.28 compared with €26.26 in the west. And while the average western German has around €182,000 in assets, their eastern cousins have €88,000.
These figures reveal that it will take many more years and many more billions of Euros until true economic parity between the old East and West Germanys is achieved.
EU investment
A further uncomfortable truth for Johnson is that the European Union (EU) has played a key role in investment in Germany’s eastern parts. In fact, the EU’s European Regional Development Fund (ERDF) and European Social Fund (ESF) were set up with the mission of levelling up the EU’s member states and improving its economically deprived regions. Germany’s east has benefitted enormously from this.
In the funding period 2014-2020, for example, the eastern state of Brandenburg received over €856 million from the ERDF. The fund allocated the money to Brandenburg to provide for the creation of ‘incentives for economic growth by investing in research and development, developing sustainable, competitive economic structures and integrating low-carbon technologies into existing value chains’. In the same funding period, the eastern states also received €3.6 billion from the ESF in order to promote the development of employment opportunities and skills acquisition.
‘Blooming landscapes’
Alongside the economic cost of levelling up eastern Germany, the British government should also take note of the consequences of not making good on their promises. In 1990, German Chancellor Helmut Kohl foresaw economic prosperity for the eastern states and predicted that German reunification would transform them into ‘blooming landscapes where it is worth living and working’.
While their economic prospects have indeed improved since the fall of the East German regime, many citizens in Germany’s east believe that Kohl’s landscapes have failed to bloom. They cannot see past their government’s annual reports about the stark reality that western Germans enjoy better wages and better living standards; in 2020, a German government survey found that 57 per cent of easterners feel like second class citizens in their own country.
Such perceptions of inequality cast doubt in the minds of many on the success of reunification and have had concerning consequences. In a 2019 survey, only 42 per cent of eastern Germans stated that they felt Germany’s democratic system was the best form of government.
If the current Conservative government’s plan to level up the UK turns out to be built on the same foundations as their predecessors’ Northern Powerhouse, we may yet see faith in politicians and democracy fall to a similar extent here.
