Economy of Berlin - Reunification

Reunification

Berlin’s and Germany’s unification brought the collapse of many of East Berlin’s producers, which could not compete with market-disciplined Western competitors. Massive unemployment was only partly compensated by the growth of jobs in the construction and infrastructural sectors involved in rebuilding and upgrading East Berlin’s infrastructure. The move of the federal government from Bonn to Berlin in 1999 brought some economic stimulus and tens of thousands of jobs from government employees, parliamentaray services, lobbyists and journalism to Berlin. Berlin’s service sectors have also benefited from improved transportation and communications links to the surrounding region. While some manufacturing remains in the city (Siemens and Schering have headquarters in Berlin, for instance), the service sectors have become the city’s economic mainstay. Recently, research and development have gained significance, and Berlin now ranks among the top three innovative regions in the EU (after Baden-Württemberg and the Île-de-France region). However, growth in the research and development sector has not been sufficient to offset job losses, and unemployment remains high, at 16.5% as of October 2006.