The Western takeover: Repercussions of German reunification on domestic and European Union affairs

• Main Authors: Banez, Glenn Kevin V., Corpuz, Cheryll Elisa M.
• Format: text
• Language: English
• Published: Animo Repository 2008
• Subjects: Germany—History—Unification, 1990; Germany (West) > Foreign relations > European Union countries; German reunification question (1949-1990); European Languages and Societies
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/4989
• Institution: De La Salle University

German reunification was a historical and political event that entailed repercussions on its domestic and international affairs. Measures implemented for unification to take place were generally currency union and transformation of socialism of East Germany into capitalism with massive financial assistance coming from West Germany. Negatively, these measures brought down the economic position of the unified Germany. West Germany's financial assistance from the banks took its toll as East Germany experienced currency and capitalism shock. Positively, given Germany's renewed strength, power and influence, it increased its influence in the European Union (EU). This led to an essential establishment of a budget discipline for the EMU's convergence criteria to be maintained by the member states: the Stability and Growth Pact (SGP). The study is focused on the 3% GDP deficit limit convergence criteria. This is a significant point of study as recent literature only discloses an evaluation of the SGP since its inception years ago citing Germany's noncompliance of the convergence criteria without enumerating the causes. Being largely political and economic in nature, the effects of the German reunification provides insight on the possible cause of the failure to adhere to the convergence criteria in relation to SGP. This study attempts to establish a connection between German reunification as a driver to the apparent non-compliance of Germany to the convergence criteria affecting the budget discipline, the SGP.