Since banks turned to rescue and bought off chunks of these papers, with low mark-to market valuations these resulted in losses to a number of financial institutions and write offs required capital injections. This fortunately was possible given the growth in sovereign funds which are waiting for acquisition and other deals.
While it is true that the burden of taxes and social security contributions eased slightly to 47½% in 2002, there is no doubt that the considerable rise in non-wage labour costs since reunification has had a negative effect on labour demand.