A widening chasm in wealth distribution between eastern and western Germany is fueling a pervasive sense of disenfranchisement and threatening the stability of the nation’s democratic foundations, according to Germany’s Federal Government’s East Commissioner, Elisabeth Kaiser. In a recent commentary published in “Der Stern”, Kaiser argued that the state has a responsibility to critically examine this imbalance and take proactive steps to address it.
Kaiser’s assessment highlights a growing sentiment among eastern Germans, who feel continuously disadvantaged, a feeling that extends far beyond purely financial considerations. It encompasses issues of recognition, respect and a perceived lack of procedural justice. Worryingly, she notes that this gap has demonstrably widened since the turn of the millennium, a trend exacerbated by the fact that inheritance is not only less frequent in eastern Germany but also involves significantly smaller sums.
The commissioner further pointed to a concerning pattern of financial conservatism in the east. Drawing from experiences of economic upheaval during the transition period, eastern Germans exhibit a reluctance to engage with investments offering potentially higher returns, contrasting sharply with the rising appetite for risk and greater wealth accumulation observed in western Germany. This divergence, Kaiser suggests, perpetuates a cycle of disadvantage.
Kaiser’s proposed remedies are ambitious and potentially contentious. She strongly advocates for a reform of inheritance tax, arguing that current rates fail to adequately tax inherited wealth in comparison to earnings and salaries. Any additional revenue generated, she proposes, should be channeled into the education system as a long-term investment in fostering greater equality of opportunity, particularly regarding wealth creation.
Furthermore, she calls for increased support for homeownership in eastern Germany, where rates currently lag significantly behind those in the west, with only 30% of residents owning their homes compared to 40% in the west. This initiative, according to Kaiser, would serve as a tangible step toward alleviating feelings of marginalization and bolstering economic security within the eastern states. The proposals, while likely to generate debate regarding fairness and economic repercussions, underscore the urgency with which policymakers must confront the deeply ingrained regional disparities that threaten Germany’s social cohesion.