Magazine article Management Review

German Economic Miracle, Round 2

Magazine article Management Review

German Economic Miracle, Round 2

Article excerpt

The Cold War is over. A united Europe is establishing new market strategies. The business of doing business has prevailed over the business of preparing for war.

Monetary union last July made German reunification inevitable, but much remains to be done: The West Germans will have to pay to rebuild the East through incentives and increased tax dollars, and the Easterners will have to create competitive niches in a suddenly free-market economy (see story page 12). Although there inevitably will be problems and controversy and setbacks, I believe that Germany will accomplish the task before it and that the next few years will witness a new German economic miracle. But because Germany will be rebuilding itself, Round 2 will take place even more quickly than the growth kicked off in the 50s by the Marshall Plan and introduction of the Deutsche mark.

What's more, Germans on both sides of the border welcome U.S. investment. The West Germans are savvy enough to know that their Eastern siblings do not want to be totally dependent on them. And since there's plenty of money to be made, the Westerners can afford to welcome U.S. investment. As for the Easterners, they have eyed our economic system enviously for 40 years, and they are eager to gain their piece of the American pie. We don't often hear anymore that U.S. goods and management techniques are the best in the world, but such is the firmly held view in Eastern Europe. It's up to us to capitalize on that belief.

East Germany is ideally situated as an entree to the rest of Eastern Europe. …

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