With the move toward a more democratic government in East Germany, many people began to consider the idea of a unified Germany. In February 1990, East German leader Modrow announced that he favored unification. In their March elections, most East Germans voted for candidates who favored rapid unification. Most West Germans also supported unification.

In mid-1990, East Germany began selling many government-owned businesses. In May, East Germany and West Germany signed a treaty providing for close economic cooperation. In July, the economies of East Germany and West Germany were united.

Economic unification had several results. Goods that had been scarce in East Germany became readily available. But the cost of many goods in the free market was higher than they had been when the government controlled prices. Many East German businesses were not able to continue to operate without the government's financial support. They closed or operated on shorter hours, which caused increased unemployment.

Between May and September, talks about unification were held among the foreign ministers of the two German states and the four Allied powers of World War II—the United Kingdom, France, the Soviet Union, and the United States. The Allied powers still held some occupation rights in Berlin and in East and West Germany, including certain rights to oversee Berlin and to approve Germany's borders. In a treaty signed on September 12, the Allied powers agreed to give up these rights. The treaty, called the Treaty on the Final Settlement With Respect to Germany, made it possible for the Germans to complete the unification of East and West Germany.

On August 31, representatives of East and West Germany signed their own treaty for unification. The treaty detailed the major aspects of unification, including the merging of the social and legal systems. It took effect on Oct. 3, 1990, marking the official date for the unification of East and West Germany. Berlin was also unified and named the country's capital.

The government of unified Germany continued selling businesses formerly owned by the East German government. Some of the largest East German companies were closed because they damaged the environment with air and soil pollution.

West German Chancellor Helmut Kohl continued to serve as chancellor of Germany. The first national elections of unified Germany were held in December 1990. As a result of the elections, Kohl remained chancellor, and his coalition of Christian Democrats and Free Democrats remained in power. Kohl's coalition also won again in 1994. In spite of Kohl's election victories, however, dissatisfaction with his policies increased.

In the former East Germany, people were disappointed at the slow rate of progress toward an improved economy. In the former West Germany, some people resented the cost of unification. Germany also faced the problem of growing unemployment, particularly in its industrial regions. Many Germans feared they would not have the resources to support the country's large social welfare budget.

Germany also experienced a wave of social unrest in the early 1990's. Large numbers of immigrants had entered the country. Neo-Nazis and other right-wing Germans began to protest the increased immigration. Some of them made attacks against foreigners, resulting in a number of deaths. Large numbers of Germans took part in public demonstrations that protested the attacks. Germany had had a policy of allowing any people who said they were fleeing persecution to enter the country. In 1993, the German parliament amended the Constitution to reduce the flow of immigrants into Germany.