Well the situation is in east Germany unemployment is high, education and labour skill is reasonable to high, ground prices are low and it’s in Germany (the incentives to chose to locate there).
But in the end if a company where to choose solely on those factors Poland and the Czech Republic have all these things (except being Germany) at much lower wages… so the intrinsic incentives for those companies are to not locate to east Germany.
Hence the required subsidies for some of there companies… an artificial incentive is added). That without it the companies would not be there, and in the end I would argue the proximity to Poland and Czech republic mean other companies will not choose east Germany.
So yes, we agree the subsidies are part of the whole package weighed by companies, the artificial incentive (subsidie) is only available to a limited group and this is why I think east Germany will remain a problem area for Germany.
Well the situation is in east Germany unemployment is high, education and labour skill is reasonable to high, ground prices are low and it’s in Germany (the incentives to chose to locate there).
But in the end if a company where to choose solely on those factors Poland and the Czech Republic have all these things (except being Germany) at much lower wages… so the intrinsic incentives for those companies are to not locate to east Germany.
Hence the required subsidies for some of there companies… an artificial incentive is added). That without it the companies would not be there, and in the end I would argue the proximity to Poland and Czech republic mean other companies will not choose east Germany.
So yes, we agree the subsidies are part of the whole package weighed by companies, the artificial incentive (subsidie) is only available to a limited group and this is why I think east Germany will remain a problem area for Germany.