Professor Edgar Morgenroth:

I have also written about this. I call it "brain gain" rather than a brain drain, which is what we normally have. Obviously, the loss of the Structural Funds is a big issue. We will have to wait and see how big that will be. One thing that is always good is if one is able to get money from external sources that one does not have to raise locally. That gives an opportunity to fund things that one would not otherwise be able to afford. When that is gone, one is going to have to think about how to prioritise the limited resources that are there. I spent a year at the Strategic Investment Board in Belfast looking at the Irish Society for New Economists, ISNE, 3, where we were expecting big cuts in capital expenditure. The more limited one's resources are, the tougher the choices one is going to end up having to make. Loss of Structural Funds is a really significant issue.

In terms of convergence, this is one of those very interesting things and is the reason we raised the issue of East Germany. East Germany is a very interesting case in that it has managed to converge slowly and steadily, not like a rocket. It will take at least another 20 years to properly converge. It is a long-term issue even for things that one might think would integrate very quickly such as trade. Trade within Germany has still not properly converged and it is expected to take another 25 years so one is looking essentially at a 50-year project to properly integrate east and west Germany. Obviously, it is a different situation with different starting positions and so on but it just shows that this is not something that happens overnight. In terms of the resources required, so far, German reunification has cost trillions of euro - somewhere between €1 trillion and €3 trillion. It is hard to put an exact finger on it. It has also come with very significant disruption. East Germany now has 12% less population than it had in 1989. There has been very significant outward migration because it did what we call a sharp shock policy, which did kickstart that convergence process but was very painful.