2 Germanys Sign Treaty on Economy : Unification: As of July 2, the two countries will be a single economic entity.

The two German nations today signed a historic treaty that will make them a single economic entity in less than seven weeks and introduce fragile East Germany to the rigors of capitalism.

The signing means that as of July 2, when the treaty takes effect, the four-decade division of Germany will come to an end in many ways.

However, the thorny issue of the military status of a united Germany remains to be resolved, especially the Soviet Union’s rejection of proposed NATO membership for the new Germany.

Flanked by West German Chancellor Helmut Kohl and East German Prime Minister Lothar de Maiziere, the finance ministers of the two merging nations signed the treaty inside the federal government’s opulent Palais Schaumburg.

“This is a historic hour in the life of the German nation,” Kohl said during the ceremony.

“We have come here together to sign a treaty after 45 years of painful division, a treaty with which we are completing the first significant step toward the restoration of Germany’s state unity.

“What we are living through here is the birth of a free and united Germany,” Kohl said.

De Maiziere said that not all “flowery dreams” of East Germans will be fulfilled with the treaty. “But no one will be worse off than before.

“Which other country gets such a good starting position as we with this treaty?”

The ceremony was loaded with symbolism.

West German Finance Minister Theodor Waigel and his East German counterpart, Walter Romberg, signed the treaty inside the former office of Konrad Adenauer and at his writing desk.

Adenauer was West Germany’s first chancellor and helped guide the nation from postwar ruin to the present affluence and its place in the Western alliance. On one wall of the room is a tapestry of Moses, who led his people across the desert.

Kohl has made no secret that he would not mind having a place in history next to the revered Adenauer--as the architect of a reunited Germany.

The so-called state treaty between East and West Germany is the crowning achievement so far of Kohl’s fast-forward unification efforts.

The signing comes just two months after East Germany’s first free elections, and a little more than six months after the Berlin Wall was opened by East Germany’s pro-democracy revolution.

Under provisions of the document, East Germany will get massive assistance from West Germany in exchange for scrapping its moribund centrally planned economy for capitalist principles.

The East German government has opted for annexation of its economy by West Germany rather than face possible economic collapse.