Taipei Times: Eastern Germany has experienced an uneasy "catching up" phase since the reunification of Germany in 1990. For example, its unemployment rate, stagnant at 17 percent for the past three years, is twice the level of western Germany. What's your evaluation of this process?
Klaus Rupprecht: As you've rightly said, there are still major economic problems. The problem we're facing in eastern Germany is that the productivity is still lower than in western Germany, while wages are basically the same as in the West. So there isn't enough investment going into eastern Germany because people can invest in Poland, Hungary, and the Czech Republic with cheaper labor.
But I think slowly this will be overcome. And there are good signs because there are high-tech industries going into the east part of Germany where they have a skilled, highly trained and diligent labor force. So it's just a matter of time to overcome these problems.
TT: Despite the fall of the Berlin Wall, there have been economic diferences between people from eastern and western parts of the country. A recent survey by The Economist shows that six out of 10 (in eastern Germany) complain that the government is "not doing enough" to bring their living standards in line with those in the West. How would you interpret these complaints and how can the gaps can be bridged?
Rupprecht: The people expect the government to fix everything because they were used to a state that regulated everything and provided for everything.
Of course it's hard for them to adapt themselves to a state where private initiative is the driving force.
I think the federal government has done a great deal to improve conditions, but now private initiative is asked for -- private initiative on the western side and on the side of the eastern population.
I think the government has done all it can do but you can't have a market economy that is run by the government. And people have to be realistic about that.
TT: Ten years after German reunification, do you think your country has largely reduced the worry some European powers have over the so-called "Germany problem" -- the anxiety over a country too strong for its neighbors' comfort?
Rupprecht: Definitely. We live with all our Central and Eastern European neighbors in harmony. We have long lived in harmony with our western and southern neighbors.
This is the first time in a very long period of German history that we have harmonious relations with all of our neighbors.
For some people, our size is the problem, but we are very conscious of this fact and we've behaved in a very responsible way so that our size does not overpower others. That is definite progress.
TT: Recently the Danes have said "no" to European monetary union, and the euro as a currency is not doing very well. At the same time, some in East Germany are worried that the EU's enlargement to include Germany's eastern neighbors could further worsen the unemployment problem. How would you perceive these challenges ahead?
Rupprecht: As far as the euro is concerned, I agree with former Chancellor (Helmut) Schmidt that of course it's not very good psychologically that the euro is so weak now against the dollar.
But this happened before. The German mark is sometimes weak against the dollar and it rises up again. I am convinced that the euro will reach a higher level. It just takes time and adjustment.
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