Economical situation of Thuringia - Representation and reality

Term Paper, 2002
15 Pages, Grade: 2,3 (B)



1. Introduction 1Fehler! Textmarke nicht definiert

2. Macroeconomic evolution of the free state
2.1. Conditions
2.2. Tasks

3. Thuringia today
3.1. Infrastructure
3.2. Economic structure
3.3. Foreign market
3.4. Employment
3.5. Power Supply
3.6. Communications
3.7. Education

4. Thuringia in comparison with the new federal states
4.1. Gross domestic product
4.2. Density of industrial companies

5. Nationwide comparison
5.1. Gross value creation
5.2. Households
5.3. Unemployment
5.4. Gross plant investments
5.5. Completion

6. Problems to eliminate in the Future ( destinations )
6.1. Situation on the labor market
6.2. Increase of the quality of location
6.3. Locational advertising
6.4. Protection of the specialist requirement
6.5. Evolution of the wages and earnings
6.6. Course correction in the budget policy

7. Result

1. Introduction

Free state Thuringia - mentioned the strong middle of Germany or also the green heart of Germany. Nevertheless, is this also valid for the economical aspect of the country? Can Thuringia really keep up with the other federal states or be designated even as the economically strong middle of Germany? Be called as the heart of Germany, without which the circuit of the economy would stop turning<A[swivelling|turning]>?

"This state has always offered something special. Thuringia has always been involved in research and modern technology concerning cars, optical instruments, office machines, medical science, or famous colleges and universities.<A[itself|himself|herself]> (...) The state`s efficient traffic links are being extended on a continuous basis. They have converted Thuringia into a hub of trade routes and into an advantageous location for national and international business activities, which take advantage of the state`s central position both in Germany and in the expanded European Union.<A[do|make]> (...) ... intensive research and development activities conducted with a view to satisfying business needs in addition to an efficient system for knowledge transfer have led to the creation of products which are often unique on the market.

A state policy consistently geared to business needs, development organizations run by the state, and practical promotion activities have been instrumental in creating an innovative dynamism in business life which is attracting new companies, and provides room for many different projects in the state`s budding economy...<A[room|space]> <A[developed|emerged]>

( Franz Schuster - minister of Thuringia for economy, employment<A[job|work]> and infrastructure; Pamphlet of the ministry )

These are the words of a minister making propaganda for his state, covered by a pamphlet with inviting pictures.

I would like to consider this statement from several point of views<A[pages|sides]> and try to find out whether it`s a realistic representation.

On the one hand the overall economy of the state ( also in comparison with other states ) and on the other hand individual sections will be analyzed in order to prove<A[occupying|coating]> or refute this .

2. Macroeconomic evolution of the free state

2.1. Conditions

In 1936, the gross domestic product generated per capita in the region was considerably higher than the levels achieved in the west of the country. After that this area was run down to a third in comparison with the other areas and economy results had grown only by 38 per cent in real terms during the 40 years of command economy. But during the period of 1991 – 2001 an increase of 64 per cent could be listed. This is a result of the increasing modernization of the economy in numerous fields.

In 1990 the results of the socialist command economy were still noticeable to everyone. Crossed somebody the former border than one was able to recognize this because of the state of the road networks, the neglected building substance of the cities and the oversized companies with an obsolete equipment. Market orientation<A[bearing|information|orientation]> and efficiency was hardly felt<A[felt|sensed]> in the production of the enterprises. Also the service sector was completely becoming stunted as bad conditions on the market as well as deficits in the energy supply<A[energy supply|power supply]> were obvious. According to the ministry of environment also the state of the environs was more than alarming in many fields. Agricultural enterprises determined the picture and caused considerable environmental problems. This involved many tasks of the state, and also the country <A[alliance's|bundle]>.

2.2. Tasks

New branches of trade had to be enlarged as soon as the chances of new technologies had to be used. The adaptation to the not known market-economical orders of the west<A[alliance|bundle]> was destination of these investments.

However, before one could take this into attack, one of the focal points was the construction of the infrastructure. This was one of the starting-points for the evolution of a competitive economy. This contains a well removed traffic network, a broad offer of trade areas, a secure and cheap energy supply<A[energy supply|power supply]>, a financeable water supply and a modern telecommunication structure, as well as promotion of the education in the region. Thus the stabilization of the financial market appertained onto 1st place . That is still today one of the main<A[uppermost|supreme]> priorities.

3. Thuringia today

Already Thuringia has reached its aim to develop an economy offering a little more occupation and income chances. A survey conducted by the Cologne-based Institute of German Ecocomy in spring 1999 commended it as the “Economic Model State in the East”.

3.1. Infrastructure

In order to be able to seize the oppertunities provided by the State`s favorable location, above all high priority is given to the development of the nation-wide transport infrastructure within the economic policy. Freeways are being enlarged and by constructing new ones a faster connection to the south will be created. The close knit system of highways is being extended even further.<A[disburdened|relieved]> The capacity of the federal and state highway network is being increased, building bypass roads in order to relieve the strain created by through traffic in towns and local communities. Also because of the protection of the environment the binding through the rail traffic has gain importance <A[increased|raised]>. The Free State helps to avoid the gridlock of roads by providing consistent financial support of public suburban traffic and a bus system covering the whole State.<A[Besides|In Addition]> Erfurt international airport is kept up-to-date with modern technology.

In the last years many productive and competitive companies have been established. Privatization ( principal in the agriculture) was completed quicker than in the other new federal States in East Germany, and the first companies have gone public in the meantime. This included, e.g., Jenoptik AG in Jena, Muehl AG in Kranichfeld and Intershop Communications Inc in Jena.

3.2. Economic structure

Business life in Thuringia today is marked essentially by small to medium-sized companies. In the mining industry and processing trade merely 15 companies with more than 499 employees existed in 1997. The middle class occupied approx. 89 % of the employees. This did not change substantially until<A[until|by]> today .

Also the producing trade could increase its part proportionally. While in Thuringia the part was resting<A[resting|lying]> with 23 per cent in 1997, only 21,5 per cent were reached in the major key cut in the new federal states.

3.3. Foreign market

<A[remained|stayed]><A[their|her]>By the development in foreign markets the companies of Thuringia kept on getting ahead. Approx. 25 per cent of the foreign country sales of the new states go back to activities of regional companies. Since 1991 the exports have been duplicated. In particular motor vehicle manufacturer and - supplier, the electrico-technology, the mechanical engineering and the precision mechanics/ optics have already consolidated markets. With<A[With|In The Case Of]> an export quota of approx. 19 per cent the country is behind Saxony<A[is|lies]> close by the top in the new states .But it can`t still keep up with the Old states . Where the rate rested<A[rested|lay]> with 33 per cent in 1997.

3.4. Employment

In the first place deep incisions were to be listed with<A[with|in the case of]> the employee numbers. Without doubts the producing trade was affected by that most strongly. Only in the service sector ,which was neglected before the border initialization, the number of the employees could be enlarged. Because of the economical and political modification the number of the registered employees sank from 1991 to 1997 around 18,5 per cent. Still the application<A[commitment|use]> of labor market political instruments adds in great<A[great|large]> scale the release of the labor market.


Excerpt out of 15 pages


Economical situation of Thuringia - Representation and reality
University of Kassel  (FB Business english)
2,3 (B)
Catalog Number
ISBN (eBook)
File size
501 KB
Economy, Ökonomie, Thüringen, Thuringia
Quote paper
Anonymous, 2002, Economical situation of Thuringia - Representation and reality, Munich, GRIN Verlag,


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