Germany known as the Federal Republic has been reunified and Europe seems set to move towards closer integration in a community which may ultimately embrace most of the European continent, including some or all of the former communist states. Internal political developments in the new Germany have been less reassuring. The collapse of the USSR and the dissolution of the Soviet Bloc, coupled with changes in all the former member states from a communist political and economic system to democracy and a market economy, has created upheaval, disorientation and insecurity in all the affected states. The Bonn government is largely financing the change-over in East Germany, where factories and businesses, which are unable to compete in a market economy, have to be reorganised or in some cases permanently closed. The main stumbling block at this moment is religious fundamentalism, on both the Islamic and Jewish sides, using terrorist methods as a means of frustrating the efforts for peace.