Besides the economic effects reunification had on Germany, there were political effects as well. This is because of the two conflicting ideologies clashing against one another. Switching from Socialism to Capitalism caused several problems such as economic reforms, different political philosophy, and establishing the basic rules for the economic market to be used for East Germany.
Throughout Eastern Germany, many people believed that their standard of living would increase because of their view of West Germany Capitalist society. With the introduction of the Deutsche Mark and the economic reform upon East Germany much of the citizens were expecting the economy of East Germany to initially boost completely. The complete opposite effect occurred, the economy was greatly affected (more information on the economic effects tab) and the government had to find ways in order to help its citizens and the economy.
East Berlin, Germany
Humboldt University at Berlin, Germany
In addition, the government tried to create a free competition in order to have an open economy, by having free competition there would possibilities for creating private and independent businesses. This was another effect because breaking up businesses from the once existing everything state owned was difficult. As well, on the political side was creating regulations for the new founded businesses from the once socialist country. Reforming East Germany banking system did take some time in order to create a capital market in the East.
Another major component in the political side upon reunification was reforming the East German tax system to match along sides with the West German tax system. Since reunification occurred out of nowhere and since the government was very rapid in the entire process, they did not take into consideration the political effects it would have upon the unified nation. (The Economics of German Unification: An Introduction)