Economy
Germany’s East-West divide still seen in wealth gap
The economy of the former East Germany has transformed and grown since the defunct communist state reunited with the much wealthier West Germany in 1990, but decades later, it still lags behind the West in some key areas.
While the once huge gulf in unemployment rates has closed, households in the former East still have around half as much wealth on average. People earn less, although they can also spend less on outgoings such as rent.
Some residents in the East view such lingering differences as a sign that they remain “second-class citizens.”
The disparities have helped the rise of the far-right Alternative for Germany (AfD) party in the region. After its victory in this month’s Saxony-Anhalt state election, it is hoping to make gains in Mecklenburg-Western Pomerania on Sept. 20.
Following is a look at where the eastern German economy has largely caught up with the West – and where it hasn’t.
Employment mostly converged
For the first 15 years after reunification, Germany’s defining economic fracture was access to work after the collapse or painful restructuring of state-owned industry in the East.
Eastern German unemployment peaked near 20% – almost double the western rate in the late 1990s. As the economy stabilized, the gap narrowed, and by 2025, registered unemployment in the East stood at 8.6%, compared with 6.4% in the West.
Employment rates show even more convergence. By 2025, 75.9% of those of working age in the East were in employment, trailing the West by just 1.6 percentage points. Among women, the gap has closed entirely: 74.1% in the west are in work versus 74.0% in the east.
Household incomes come closer, but West still ahead
Household incomes in eastern Germany have risen substantially since 2008, and faster than in the west. In 2008, median disposable income in the eastern states, including Berlin, was about 82% of the western level. By 2024, it had climbed to roughly 92%.
But a meaningful gap remains. Median disposable income in the eastern states, including Berlin, was about 25,900 euros ($29,710) in 2024, compared with roughly 28,100 euros in the West – a difference of around 2,200 euros a year.
In 2025, median gross annual earnings for full-time employees were 46,013 euros in the east, excluding Berlin, compared with 55,435 euros in the west – a gap of 9,422 euros.
While households in eastern Germany earn less on average, living costs are also lower, particularly for housing. Asking rents in eastern states such as Saxony, Saxony-Anhalt and Thuringia are around 30%-40% below the national average, helping to partly offset the income gap.
A wider gap in wealth
The east-west wealth divide remains far wider than the gap in household income or employment.
In the eastern states, including Berlin, average net household assets, including property, investments, pension savings and goods, rose from 61,200 euros in 2013 to 125,500 euros in 2023. In the former western states average net assets increased from 140,300 euros to 257,100 euros over the same period.
Eastern households therefore held just under half – around 49% – of the average wealth of western households in 2023, a gap of around 132,000 euros per household.
The disparity is also likely to persist across generations.
East population continues to shrink
The demographic legacy of reunification is most visible in the population. The east has lost a far larger share of its working-age residents due to the post-reunification exodus of younger people, combined with lower birth rates and faster aging.
This means eastern employers are trying to recruit from a smaller pool, while a larger share is beyond working age.
In 2022, people aged 18 to 64 made up 57.5% of the population in the eastern states excluding Berlin, compared with 61.6% in the west.
From 1991 to 2024, net migration from east to west totalled about 1.2 million people, excluding Berlin. Since 2015, the east’s population has continued to decline while the west’s has grown.
Lower private investment adds to the challenge. East German firms invest around a quarter less per worker than those in the west, according to the Ifo economic institute.
The east’s older, shrinking workforce and weaker investment could make the remaining gaps in pay, wealth and economic capacity harder to close.
Trade Minister Ömer Bolat held talks with Italian Deputy Prime Minister Antonio Tajani and leading business representatives in Rome, focusing on expanding bilateral trade and deepening production ties between the two countries.
Bolat said on Turkish social media platform NSosyal on Friday that the round-table meeting focused on integrated supply chains across key sectors, including automotive, aerospace, defense, energy, logistics, manufacturing, textiles, and machinery.
He emphasized that Türkiye and Italy are not merely commercial partners but key components of a joint manufacturing ecosystem, particularly in the automotive industry.
Highlighting Türkiye’s role within the EU Customs Union, Bolat noted that preserving strong production networks is vital for the competitiveness of both Türkiye and Europe.
Participants explored opportunities for joint ventures in third countries and deeper cooperation in future-focused fields such as green energy, digitalization, space, advanced manufacturing, and healthcare.
Italian foreign direct investment in Türkiye has reached $4 billion across 1,645 companies, while Turkish investments in Italy surpassed $1 billion.
The minister added that under the leadership of President Recep Tayyip Erdoğan, the two historic strategic partners will continue to advance their complementary economic partnership.
Türkiye will develop a project with the French Development Agency (AFD) to combat “sea snot,” or marine mucilage, under a new financing package worth approximately 600 million euros ($688.38 million), Environment, Urbanization and Climate Change Minister Murat Kurum said Friday.
The remarks by Kurum, who also serves as president of this year’s U.N. climate summit COP31, came after he met Thursday with AFD Director-General Christophe Lecourtier in Paris.
Türkiye in the past faced a plague of sea snot, a thick, slimy layer of organic matter known as marine mucilage, in the Sea of Marmara, posing a threat to marine life and the fishing industry.
The inner Sea of Marmara, which connects the Black Sea through the Bosporus to the Aegean Sea through the Dardanelles, lies in the middle of the most industrialized region of Türkiye.
Türkiye earlier this month signed a cooperation agreement with the Asian Infrastructure Investment Bank (AIIB) that will support environmental investments and climate change efforts.
The first phase of the deal will focus on environmental projects in the Marmara region, including the fight against sea snot, through an investment package worth around 400 million euros.
Kurum said Friday that the AFD was an important part of the COP31 process, stressing that access to financing was essential for implementing climate goals.
He praised the agency for supporting major projects in Türkiye and around the world.
“Together with the AFD, we will develop a project to combat sea mucilage under a new financing package worth approximately 600 million euros across Türkiye,” Kurum said.
The project will include increasing the share of renewable energy, improving the quality of wastewater treatment plants discharging into the seas and reducing nitrogen and phosphorus levels, he said.
“These steps will help restore oxygen levels and revive marine ecosystems,” Kurum added.
He said Türkiye was preparing for COP31 with strong support from the AFD and that the two sides would work together to implement the summit’s action agenda.
“We want to achieve together the targets set out on the road to Antalya,” Kurum said, referring to the southern Turkish city that will host COP31 in November.
Technical-level meetings
AFD’s Lecourtier said the momentum created by the COP summits since the Paris Agreement was signed in 2015 was important for France and the agency.
The agency’s main objective is to finance more than 6 billion euros worth of projects annually around the world, particularly in areas such as the transition to renewable energy, he said.
Lecourtier said Thursday’s meeting was important because these issues were already on the agenda of France-Türkiye relations.
“Minister Kurum mentioned adaptation efforts in the Sea of Marmara, the transition of Turkish industry to clean energy and the protection of biodiversity,” Lecourtier said.
He added that the AFD had invested heavily over the past 15 years in projects fully aligned with the spirit of COP31.
“We will be able to take to Antalya the need for action represented by the minister and expressed with great determination,” Lecourtier said.
He added that the two countries would arrive at COP31 with concrete examples of bilateral cooperation, while also creating opportunities to address other partners and countries on additional issues.
“Bilateral cooperation between our countries will allow us to come to COP31 in Antalya with more to offer, both for France and Türkiye and for the rest of the world,” Lecourtier said.
“This is an extremely important moment, and it is a great honor to have been able to prepare for it together with the minister,” he added.
“Of course, many technical-level meetings will continue until COP31.”
COP31 Action Plan
Kurum said the global average temperature had risen by 1.43 degrees Celsius (2.57 degrees Fahrenheit) above preindustrial levels, warning that floods, droughts and other disasters were becoming increasingly widespread.
He stressed the need to implement targets aimed at tackling the climate crisis.
Kurum said the COP31 Action Plan was being addressed under 10 headings, adding that access to financing and technology would be crucial to implementing the targets.
He said a meeting Thursday with the International Federation of Red Cross and Red Crescent Societies (IFRC) in Geneva had once again highlighted the importance of early-warning systems in responding to disasters.
A project on early-warning systems will also be developed as part of COP31, he added.
Kurum also said he had held talks with World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala, during which they discussed the importance of trade, production and employment, as well as the need to establish the rules of the game around efforts to combat climate change.
He also reiterated that a strategic partnership had been established between the Organisation for Economic Co-operation and Development (OECD) and COP31.
He also highlighted Türkiye’s reconstruction efforts following the devastating February 2023 earthquakes.
“Türkiye has demonstrated its determination in every field and put that determination into practice,” Kurum said. “The latest example was in the earthquake zone. We completed and delivered 455,000 homes to citizens in two years.”
“We want to share Türkiye’s experience and accumulated knowledge with the entire world,” he added.
Türkiye’s liquidation of investment funds worth $18.3 billion will not put pressure on the Borsa Istanbul Stock Exchange (BIST), as regulatory changes should prevent any contagion risk, Treasury and Finance Minister Mehmet Şimşek said Friday, adding that authorities would monitor the market closely.
“There is no widespread systemic risk. There is no structural problem in the stock market or the fund market. 90% of the fund market continued to function healthily,” Şimşek told the private broadcaster NTV.
Turkish authorities announced Thursday a series of measures to ensure market stability after some investment funds defaulted on redemption requests, triggering steep falls in Türkiye’s main stock index.
The capital markets regulator suspended trading and ordered the liquidation of 131 investment funds managed by seven portfolio management companies, including Tera Pörtfoy, Pusula Pörtfoy and Hedef Pörtfoy, on the TEFAS electronic fund platform.
The assets under management of liquidated funds exceed TL 890 billion ($18.3 billion).
The Capital Markets Board (SPK) mandated Friday the country’s largest public and private banks, Ziraat and Işbank, to oversee the liquidation of the funds.
“The liquidation process will proceed in a sound manner,” said Şimşek Friday.
Authorities jailed four executives pending trial and imposed travel bans and asset restrictions on 51 other people Friday in investigations into alleged market manipulation, Justice Minister Akın Gürlek said.
The probe followed a criminal complaint by the SPK over alleged manipulative transactions in some investment funds and shares, Gürlek said.
Şimşek said authorities would monitor markets, although he said regulatory changes should have reduced the risk of volatility recurring.
The Financial Stability Committee, Türkiye’s top coordinating body for financial-sector risks and crisis response, had convened on Monday to discuss measures aimed at preventing systemic risks in the markets.
The committee said problems were concentrated in a specific segment of the fund market and were “temporary and manageable in nature.”
“What happened in the markets … was essentially a credit and liquidity problem in a limited number of funds,” said Şimşek.
The authorities’ actions helped the main index recoup some of its losses Thursday, but it is still down around 8% since last Friday’s close. The BIST 100 was down around 1.5% at 0754 GMT, after closing 2.95% higher Thursday.
The SPK said Friday Ziraat Bank and Işbank would convert fund assets into cash and distribute proceeds to investors, with the liquidation process expected to be completed within three months unless extended.
Işbank was mandated to oversee the liquidation of Tera Pörtfoy’s funds and Ziraat to oversee funds established by A1 Capital, Atlas, Bulls, Hedef, Pardus and Pusula, the regulator said.
The four jailed suspects included a fund board chair and board members, Gürlek said, adding that the court ordered restrictions on accounts and assets to prevent them from being transferred.
Authorities also launched proceedings against people accused of using social media to manipulate capital markets, with 16 suspects jailed pending trial, the minister added.
Şimşek said free funds, or hedge funds, operate under relatively loose regulations worldwide and are generally used by qualified investors.
The sector expanded after such funds began trading on the TEFAS platform in 2019, he said.
“We are talking about a limited number of funds,” Şimşek said. “There are 2,038 funds in Türkiye, and we are talking about 131 of them.”
Şimşek said around 90% of the fund market continued to operate normally, while the funds in question accounted for approximately 10% to 11% of total fund assets.
“This does not mean that these funds have no assets,” he said. “The SPK will carry out the liquidation process in line with established principles.”
Şimşek said a fund guide introducing stricter rules for free funds had been published at the end of August, bringing the sector closer to international standards.
“Some areas have transition periods to allow the market to adapt,” Şimşek said. “The collateral structure has been strengthened. We have taken steps to address concerns regarding collateral.”
He added that regulations introduced in 2024 requiring money market funds to invest in Treasury securities considered to carry virtually no risk would also help address current concerns.
Şimşek also said there was a clear need for stricter rules in the non-bank finance sector and that authorities are working on regulations.
Türkiye is opening the fourth main runway at Istanbul Airport on Friday, with officials saying it will reduce taxiing and airborne times while helping airlines save fuel.
The new east-west runway is the airport’s first operating in that direction.
Istanbul Airport currently has three main and two reserve runways oriented north-south. The new runway brings the total number of runways to six, including four main runways.
The hub is ultimately planned to have nine runways, comprising six main and three reserve runways.
The new runway is 2,820 meters long and 45 meters wide.
It will be used particularly for flights to Anatolia, Central Asia and the Arabian Peninsula, Transport and Infrastructure Minister Abdulkadir Uraloğlu said Thursday.
Because aircraft will be able to take off in an east-west direction, they will no longer need to turn east again after departure, he said.
This is expected to reduce taxiing and airborne times, resulting in savings in fuel and time. The runway is expected to be particularly useful for domestic and eastbound routes.
The new east-west runway will initially be used only for takeoffs, according to officials. The airport also plans to introduce simultaneous four-runway operations in the future.
Istanbul Airport began simultaneous independent triple-parallel runway operations in April 2025, becoming the first airport in Europe to do so.
The gleaming glass-and-steel structure along the Black Sea coast has become one of the world’s most important transit centers since becoming fully operational in April 2019.
Istanbul has overtaken London Heathrow to become the world’s most internationally connected airport, a report by global travel intelligence partner OAG said Wednesday.
It has possible connections to 337 global destinations, with national flag carrier Turkish Airlines operating 80% of flights at the airport, the report said.
Istanbul, meanwhile, recently overtook Heathrow as Europe’s busiest airport by passenger numbers. Industry groups and officials, including the London hub’s CEO himself, had been expecting that to happen this year or the next.
The hub can handle 90 million passengers annually in the current phase. The figure is nothing compared to its potential capacity to serve 200 million after completing all phases.
Istanbul Airport served a record 84.5 million passengers in 2025, making it the second-busiest airport in Europe after London Heathrow and the eighth-busiest worldwide.
It aims to reach the 90 million-passenger mark this year.
The number of active airports Türkiye has risen to 58 from 26 in 2002, with the government renovating 16 previously inactive airports and building 16 new ones.
The number is expected to reach 60 as airports currently under construction are completed.
Passenger traffic on domestic and international routes rose to a record 247 million in 2025, putting Türkiye third in Europe and seventh globally.
Turkish authorities jailed four people pending trial and imposed travel bans and asset restrictions on 51 others Friday in investigations into alleged market manipulation, a day after authorities rolled out measures to support markets after recent volatility.
The investigation followed a criminal complaint by the Capital Markets Board (SPK) over alleged manipulative transactions in some investment funds and shares, Justice Minister Akin Gürlek said.
Turkish authorities did not name the people affected.
The four jailed suspects included a fund board chair and board members, Gürlek said, adding that the court ordered restrictions on accounts and assets to prevent them from being transferred.
The announcement came a day after authorities moved to shore up financial stability after a small number of funds struggled to meet client withdrawals amid a stock market selloff.
The capital markets board ordered liquidation of several investment funds worth around $18.3 billion managed by seven portfolio management companies.
Authorities also launched proceedings against people accused of using social media to manipulate capital markets, with 16 suspects jailed pending trial, Gürlek said.
Turkish capital markets regulator appointed the country’s largest public and private banks Friday to oversee the liquidation of 131 investment funds managed by seven portfolio companies, following earlier decisions to suspend trading in the funds.
The assets under management of liquidated funds exceed TL 890 billion ($18.3 billion).
The Capital Markets Board (SPK) said Ziraat Bank and Işbank would convert fund assets into cash and distribute proceeds to investors, with the liquidation process expected to be completed within three months unless extended.
Işbank was mandated to oversee the liquidation of Tera Pörtfoy’s funds and Ziraat Bank to oversee funds established by A1 Capital, Atlas, Bulls, Hedef, Pardus and Pusula, the regulator said.
Turkish authorities announced Thursday a series of measures to contain market volatility after some investment funds defaulted on redemption requests.
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