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DW-TV: Let's pull in Alexander Herzog-Stein. He's a labor market expert from the Hans-Böckler Foundation. We just saw a great example of a success story on the labor market in the former East Germany. But the reality is, and I mean I hate to, you know, spoil the party here, but unemployment is higher in the East than in the West, wages are lower in the East than in the West. Will the East ever catch up?

Alexander Herzog-Stein: You know, at the moment we have to have doubts. Growth is simply not sufficient to see a catch-up process in the East in the near future.

DW-TV: Why is that?

Alexander Herzog-Stein: I think the East, the eastern economy is still burdened by the mistakes which have been made in the re-unification process.

DW-TV: Was the biggest mistake that the East Germans were promised that in a very short amount of time that they would be equal with West Germany?

Alexander Herzog-Stein: I think the biggest mistake was that the task was taken too easy. You know, it was expected that we could do it without any problems and it is a big task and it takes time. I think, you know, that it's not a twenty years time span which was promised but we should have taken responsibility to see that it is a big task if we want to achieve that. That was not the case at the beginning.

DW-TV: Is it realistic to expect that the East will ever be on par with the West?

Alexander Herzog-Stein: I think we still should not give up this target. However, something has to change. We have to see higher growth rates in the future in the East to accomplish that and we also have to be realistic in the sense that it will not be completely equal. That's not the case everywhere in Germany. There are differences in the West as well and there will be differences in the East.

DW-TV: Let's fast forward to the economic crisis that we're dealing with right now all over Germany. We want to show our viewers a graphic of unemployment and how unemployment has actually been falling in Germany. We've had a nice decline up until about the summer, the fall of last year, when the financial crisis hit. The United States, the UK, they've had huge jumps in unemployment. Germany has not. What are the Germans doing correctly?

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Alexander Herzog-Stein: You know, apart from the short-time work which has been a big success story and Germany has a lot of experience with that labor market tool, it is one thing which has been overlooked for a long time. This is what labor economists call internal flexibility. Germany is very flexible in adjusting the working time of workers in companies to the economic circumstances.

DW-TV: That's a good point. But this short-time program, a lot of our viewers might not know what that is, that's when the government actually comes in and supplements the salaries for workers who are working fewer hours. That's very expensive for the taxpayer. Can Germany continue to keep funding that?

Alexander Herzog-Stein: It is not a program which should go on forever, but in the short term, you know, in the business cycle downturn it's cheaper than laying off people. So there has to be a perspective in the future that growth will return and then it was overall a success story.

DW-TV: The new German government is spending a lot of money now on a program for growth. Is that the right path?

Alexander Herzog-Stein: I think the strategy is right, you know. To provide a strategy for growth. However, unfortunately, the tools, the measures proposed by the new government, I have doubts that they are the right measures to put us on a higher growth path.

DW-TV: OK. Mr. Herzog-Stein, I wish we had time to talk more. Thank you very much for coming in to talk with us today.

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