The article focuses, with a comparative perspective, on the economic reforms that were implemented in Germany during and after the unification in 1990. The fact is stressed that after the collapse of communism, most politicians and economists considered neoliberal reforms based on deregulation, liberalization and privatization as the only viable model. Although the reforms in East Gemany were not labelled as such, they amounted to a „shock therapy“, much like in neighboring Poland. The result of the radical and hasty liberalization and privatization, in combination with the currency union of Juli 1990, was the closure of many factories and mass unemployment. The government tried to compensate the losers of the transformation with welfare payments, but that resulted in a systemic crisis of united Germany, leading eventually to a second round of neoliberal reforms under the center-left coalition government under Chancellor Gerhard Schröder from 2001 to 2005. The widening social gaps and the fear of social dislocation eventually contributed to the rise of right-wing populist parties in Germany.