The subsidy approach, the economists acknowledge, would encourage tough unions to get even tougher with east German enterprises.

A number of German enterprises have opened local branches in Moldova.

Roth Industries, a German enterprise from the environmental technology sector, has a dependency here.

It also offered a programme of visits to German social enterprises.

"West German enterprises have cooperation agreements all over the world," he said.

From 1929 to 1939 he worked representing a German enterprise in Egypt.

The government had to privatise 8,500 state-owned East German enterprises.

Some East German enterprises are sufficiently modern to pay the new wages and make a profit.

And in theory, East German enterprises are free to respond by bargaining down compensation to the point where there is little unemployment.