I myself believe that if Germany were weak, it would pose much more of a threat because, at this juncture, Germany is the reference point for many European countries in both the East and the West. And if that reference point weakens, then I believe Europe will be able neither to play an international role nor to solve its domestic and regional problems. But the West German welfare state has not changed. Unification was interesting, and I thought that it would have provided a turning point. For those who had looked into the German welfare system and its instability before the Wall came down, it was obvious that the system could no longer be sustained.
Labor cost is an issue for German firms.
It is particularly an issue for firms that produce goods that are sold or traded internationally. After unification, not only were cost developments detrimental to Germany's competitiveness, but our labor costs also increased considerably. We saw this in West Germany and even more in East Germany. The former East Germany was often cited as the technological crown jewel of the former East bloc. But to cite just one example of technological backwardness that existed in East Germany, I recall seeing an elevator operation in former East Berlin that had been purchased by the U.S. company, Otis Elevators.