Putting On Weight

The Federal Republic is already Western Europe's leading economic power. It should soon be even stronger: unification with East Germany will increase its population 27% and its gross domestic product 24%. In the near term, however, union will entail heavy expenditures for the Bonn government. Chancellor Helmut Kohl announced last week that East German marks held in private savings accounts, officially valued at about $100 billion, would be exchanged for deutsche marks on a 1-for-1 basis. Bringing the East German social and economic infrastructure up to Western standards over the next several years will require the investment of hundreds of billions of dollars. At the same time, the combined state should be able to find considerable savings by reducing the size of the armed forces, a step Bonn has already said it plans to take.

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CREDIT: TIME Charts by Nigel Holmes.

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