European Economy. Economic Papers. Germany's growth performance in the 1990's

Box 3 (continued)
Figure B3.2: Start-ups and liquidations in East Germany in 1000, 1991-1998
Source: Hauser 2000
The impact of the EU Structural Funds programme in East Germany since 1994 has been
simulated by a sectoral macroeconometric model (“HERMIN”).
28
In spite of the limited size of
Structural Funds (and national public co-financing), declining from an initial 2% of GDP to
around 1.2% in the year 2006, the combined demand-side and supply-side effects have
increased from 3% in 1994 to above 4% in the period 2000-2006. After 2006, when for
methodological reasons the simulation assumes Structural Funds payments to stop, the effects
level off to supply-side effects of about 1.5% in 2010. Similarly, the unemployment rate is more
than 2 percentage points lower than without the Structural Funds programme throughout most
of the years of the period 1994 to 2006. However, after 2006 the effect on unemployment
diminishes due to the model’s feature that the continuing supply-side effects mainly have an
effect on productivity rather than on employment.
Figure B3.3: Gross fixed capital formation per capita 1991-1999 
(1995 prices)*
*) in 1000 ECU/€
Source: 
Arbeitskreis “Volkswirtschaftliche Gesamtrechnung der Länder”
28
Cf. Bradley/Morgenroth/Untiedt 2001
140
96
79
74
76
86
92
96
11
24
41
44
49
74
81
87
129
72
38
30
27
12
11
9
0
20
40
60
80
100
120
140
160
1991
1992
1993
1994
1995
1996
1997
1998
start-ups
liquidqtions
balance
4.8
5.0
4.6
4.6
4.6
4.6
4.7
4.9
5.2
3.2
4.6
5.6
6.9
7.1
6.7
6.4
6.2
6.0
0
1
2
3
4
5
6
7
8
1991
1992
1993
1994
1995
1996
1997
1998
1999
western Germany (incl. Berlin)
eastern Germany (excl. Berlin)

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