Accustomed to dividing the Federal Republic into West and East, both experts and laypeople paid little attention to the trend of a new divide – between South and North.
After examining various development indicators – dynamics of economic growth, labor market conditions, demographic processes, level of research and development – the BIB specialists classified Hesse with the country's financial capital Frankfurt am Main, Rhineland-Palatinate, as well as Thuringia and Saxony as prosperous regions, in addition to the traditionally successful Bavaria and Baden-Württemberg. The authorities of the latter two states, formerly part of the GDR, have managed in recent years, through skillful attraction of investments and development of high-tech industries, to ensure sustained economic growth and an influx of labor.
In contrast, the former industrial center of West Germany – the state of North Rhine-Westphalia – found itself in the company of the economically weak and population-exodus-stricken north, which includes the remaining eastern states – Saxony-Anhalt, Berlin, Brandenburg, and Mecklenburg-Western Pomerania, as well as the western states of Lower Saxony, Bremen, and Schleswig-Holstein. There have been exceptions, but the rich northern Hamburg and the poor southern Saar only confirm the rule.
The population of Bavaria has grown by 670,000 people of working age in the last twenty years, not counting migrants from abroad. Lower Saxony lost almost half a million residents over the same period, Berlin about 100,000, and Bremen and Mecklenburg-Western Pomerania also suffered significant population losses, with the majority of those leaving their northern home being young people aged 18 to 30 moving for work or study.
Women migrate more often than men – in addition to the loss of specialists, the north also loses future mothers, which will have a catastrophic effect on the demographic situation. For Bavaria itself, experts predict a stable influx of population until 2030. Together with the country's largest administrative unit by area, the population of other southern states will remain relatively stable – in contrast to the decline in the population in northern Germany.
The South can boast minimal unemployment (3.9% unemployed in Bavaria in April 2011), while in the north the figures are decreasing much more slowly (over 13% in Berlin and Mecklenburg-Western Pomerania). Investments in the economy of the German South are also fundamentally higher than in the North: for example, in the last year alone, Bavaria and Baden-Württemberg accounted for 52% of Germany's total spending on scientific research.
Among the 20 German cities and districts identified by BIB specialists as having the best prospects in the economy, labor market, and demographics, 18 are in southern Germany: in Bavaria and Baden-Württemberg, with two more – Jena and Potsdam – in the east, on the territory of the former GDR.
In turn, the public organization 'Initiative New Social Market Economy' (Initiative Neue Soziale Marktwirtschaft) published its own ranking of the country's most economically strong regions. The first three places are occupied by Bavarian Munich, Erlangen, and Ingolstadt, fourth is Baden-Württemberg's Ulm, fifth is the sole representative of northern Germany, Wolfsburg, and positions 6 through 10 are again given to cities in Baden-Württemberg and Bavaria.
The system of redistribution of funds between the states and the federal government, introduced in Germany in 1950, provides for income-based support of poor states by rich ones. The Bavarian Ministry of Finance estimates the funds redistributed between states from 1950 to 2010 at 157 billion euros. The main sources of this money were Hesse, Baden-Württemberg, and Bavaria. The redistribution of funds does not smooth out the growing inequality and at the same time causes a noticeable negative reaction among politicians and the population of the prosperous south, who consistently subsidize the northerners.
The lack of funds for their own needs and the dire financial situation of a number of municipalities, even in prosperous southern regions, forced representatives of the donor states to prepare a complaint to the Constitutional Court regarding the fairness of further income redistribution. The Christian Social Bavarian Finance Minister Georg Fahrenschon was supported in his intention to sue by his future colleague from Baden-Württemberg, Social Democrat Nils Schmid: 'The system must be changed because it is unfair and gives the wrong development incentives.'
However, as noted by 'Russkaya Germaniya', a joint complaint by Baden-Württemberg and Bavaria to the Constitutional Court may remain a purely political threat, since coordinated action by the two southern giants of the German economy seems unlikely in the near future: in connection with the coming to power in Baden-Württemberg of a 'green-red' coalition, Bavarian Prime Minister Horst Seehofer has already made a loud statement that the German South can now expect a 'competition of systems.'