Reiche is aiming for new strength for East Germany with a growth package

Reiche is aiming for new strength for East Germany with a growth package

Katherina Reiche (CDU) presented herself as the new Federal Minister of Economics at the East German Economic Forum (OWF) in Bad Saarow on May 19, 2025. In her speech, she addressed the pressing challenges facing the East German economy and emphasized the important role of the forum in strengthening the new federal states. “We have to solve the structural problems in the East in order to fully exploit the economic potential,” said Reiche.

A current survey by Civey GmbH and DKB highlights the tense situation in the region: 45% of the 1,500 East German entrepreneurs surveyed rate their economic situation as “bad”. Despite this gloomy assessment, Reiche emphasizes that in eight of the last ten years the economy in the East has grown faster than in the West. “This proves the attractiveness of East Germany, as the settlement of companies such as Bosch, CATL and Tesla shows,” emphasizes the minister.

Structural difficulties and planned reforms

Despite the progress achieved, Reiche recognizes the structural difficulties that burden the region. Particularly worrying is Stepstone's salary report, which shows that East Germans earn on average 16% less than their West German colleagues. Reiche also addresses current problems such as unemployment, a shortage of skilled workers and an increasing number of bankruptcies. “The overall German economic situation is tense and we are living in a persistent recession,” she warns.

In order to be able to meet these challenges, the new minister plans to put together a comprehensive growth package by the summer, the aim of which is to reduce high energy prices and strengthen security of supply and price stability in the energy sector. This will be complemented by planned structural reforms in the labor market and corporate taxation.

Criticism and skepticism

Reiche expressed understanding for critics who see reforms as delayed or inadequate. One tax expert has already expressed skepticism about Reiche's ability to deliver the required results. “We need a clear strategy that goes beyond lip service,” she demands.

However, the minister also sees rays of hope for the economy of the new federal states and states: “East Germany has had a solid economic basis since reunification” and highlights the different strengths of the regions. However, the ongoing trade conflict with the USA as well as endangered supply chains and technological disruptions represent further challenges that must be addressed in the coming period.

For more information about the challenges and opportunities in the East, see the comprehensive study East German business journals.

For a detailed analysis of Katherina Reiche's statements and the current economic situation in East Germany, we refer to the reporting by Berlin newspaper.