Considerable progress had been made since the introduction of the Deutschmark two years ago, the Chancellor told industrialists and trade unionists gathered in Bonn for the latest in a series of talks on the state of the nation.
With almost 8,000 out of 12,000 formerly state-owned firms already privatised and far-reaching improvements in the region's transport and communications infrastructure, signs of that progress were now clearly visible, he said.
But, as he admitted earlier, the scale of the task of rebuilding the east was considerably greater and costlier than most people had reckoned with in 1990. Many east German firms had been in a far worse state than expected, and nearly all of them had been badly hit by the collapse of trade with the former Comecon countries of eastern Europe and the Soviet Union.
On Wednesday, the German cabinet passed a budget for next year in which, despite cuts in several key areas, DM92bn ( pounds 35bn) was set aside for the east, an increase of almost 7 per cent on this year. 'That is an important further step,' said Mr Kohl, who has been much criticised for failing to come clean over the scale of the problems earlier. 'Now it is time for others to play their part.'
While welcoming any extra funding for the east, many of the region's politicians were quick to stress that DM92bn would not be enough. In a recent meeting with the Chancellor, prime ministers of the five new eastern Lander (regional states), said that annual transfers of at least DM130bn were necessary.
In addition to public funding, the eastern Lander are desperate to attract more private investment, seen to have been badly held back by continuing uncertainty over property ownership rights and problems in setting up local authorities.
Despite these setbacks, 8,000 firms have so far been privatised, generating investment pledges of DM140bn, enough to secure nearly 1.2 million jobs. But with the unemployment rate at 14 per cent - and rising - many fear that the worst has not yet been reached.
Heinrich Franke, head of the Federal employment office, said yesterday that with more factories set to close down, a further 200,000 jobs could be lost by the end of the year, and that there was unlikely to be any significant improvement until the beginning of 1993.
Mr Kohl warned of more job losses if east Germans, who earn considerably less than their western counterparts, continued to force through high wage rounds. 'Equal living standards remains our goal,' he said. 'But many companies in the east need more time in which to develop new production methods.'
FRANKFURT (Reuter) - Germany's largest union, the powerful IG Metall, yesterday raised the spectre of more strikes in Germany this year as it called on workers to reject government plans to curb social benefits such as sick leave payments.
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