Despite lingering economic and political divides, eastern Germany’s business leaders see notable potential, particularly in the renewable energy sector. A recent Conversion Barometer survey reveals that over half of these leaders rate the region’s economic prospects as high or very high. However, the survey, conducted annually by the Eastern German Economic Forum (OWF) since 2022, also highlights persistent concerns and regional disparities.

Mixed Sentiments: Optimism vs. Reality

While a significant portion of business leaders express optimism, the survey paints a more nuanced picture.Approximately 23% of the 1,500 respondents view the economic potential in eastern states as low. moreover, about 40% do not anticipate strong growth in any particular sector.

The OWF characterizes the prevailing mood worse than the actual situation, a trend observed since last year. This sentiment is further underscored by the fact that nearly half of the respondents view the general economic situation in eastern Germany negatively.Paradoxically, most companies reported satisfaction wiht their economic performance in 2024.

Key Challenges: energy prices and Skilled Labor Shortages

Business leaders identified two primary challenges hindering economic growth: high energy prices and a lack of skilled workers. addressing these issues is crucial for unlocking the region’s full potential.

• Energy Prices: 54% of those surveyed want the German government to implement measures to reduce energy costs.
• Skilled Workers: The shortage of skilled labor remains a significant impediment, impacting various sectors.

Skepticism Towards Government Action

Despite the desire for government intervention, skepticism remains high regarding the effectiveness of the current governance. A majority of respondents doubt that the new CDU-lead government will be able to effectively stimulate the country’s economy.

This skepticism is particularly pronounced in Thuringia, where the far-right populist Option for Germany (AfD) won big 2024 state elections. The survey indicates that Thuringia exhibits the lowest overall economic satisfaction among the eastern states.

The Enduring East-West Divide

The legacy of division between East and West Germany continues to shape economic and political landscapes. This divide is evident in voting patterns, with eastern voters often supporting parties like the AfD that challenge current policies. However, policymakers argue that the East stands to gain significantly from these very policies.

East and West Germany reunited more than 30 years ago but the economic and political divide is still present, including in views toward climate and energy policy.

Eastern German Economic Forum (OWF)

Renewable Energy: A Beacon of Hope

Despite the challenges, renewable energy emerges as a promising sector for future growth in eastern Germany. The region’s potential in this area is widely recognized, offering opportunities for investment and job creation.