Germany's East Is Bleeding to Death Slowly

Sunday Business (London, England), September 1, 2002 | Go to article overview

Germany's East Is Bleeding to Death Slowly


new manufacturing plant gave a much-needed boost to city morale which, it is hoped, may kick-start the property market.

But for men like Gerhard Mollermann, a former steel worker, it is too little, too late. It does not matter much to him whether Chancellor Gerhard Schroders Social Democrats or Bavarian premier Edmund Stoibers conservative alliance wins power: at 54, Mollermann has not worked for a decade and does not expect to do so again.

Mollermann lives in one of the poured-concrete edifices that come complete with unemployed people just like him: the jobless rate in some districts tops 30%. The west and what it promised are objects of derision to Mollermann.

They came like conquistadors, handing out promises instead of mirrors and beads, but equally worthless, he says. Carpet-baggers took to the west the best of what we had, shut down the rest and threw people like me on to the scrapheap.

They talk about the cold war being won without a shot being fired, but there are plenty of casualties. Its just that were bleeding to death very, very slowly.

HEN East and West Germany were reunified on 3 October 1990, it did far more than add 17m citizens to the 63m in the western half of the country. It presented the citizens of the west with an open-ended bill that carries on growing, devouring the comfortable surpluses of the economic miracle years and doing nothing to bring Ossis and Wessis closer together. A recent survey in Die Welt newspaper found that 54% of Wessis had never set foot in the east and never intended to. For them the huge eastern port of Magdeburg is as far away as the moon.

The former chancellor Helmut Kohl got his sums badly wrong when it came to reunification. At the time Kohl had ruled out getting the EU to contribute to the Federal Republics costs in absorbing East Germany, unaware of the huge sums involved in restoring a dilapidated country with huge pollution problems.

Roads, railways, airports, public housing and factories were all teetering on the brink of ruin. Communisms creaking factories and decrepit businesses were mostly fit only for closure. Western tycoons descended like locusts to pick clean the industrial skeleton, throwing hundreds of thousands of people on to the dole.

Some of the richest regions in the world suddenly had some of the poorest as their neighbours. The five new eastern states consistently rank among the poorest in the country. Industry in the region is barely hanging on and new investment is almost non-existent. Unemployment topped 1.4m in June, the highest since 1990, and fell by only 10,000 in July.

Most eastern German towns of any size are filled with people who used to work at this (closed) state plant or that (bankrupt) state enterprise and have never found new jobs.

The winds of freedom that blew through the torn Iron Curtain also extinguished human dignity. We thought we were going to be citizens of a free state, said Lothar Mueller, a former steelworker. Instead we are prisoners of a welfare state.

The government went cap-in-hand to the German people with a solidarity tax, meant to last for a year to pay for reunification. It is still being paid and is likely to go up before it goes down.

Bonn, and later Berlin, hurled money into the yawning chasm that was East Germany. Around e172bn (pound sterling108bn) has been lavished on the country since the socialist Utopia collapsed. Now, after the river Elbe breached its banks last month, the region needs at least e16bn (pound sterling10bn) even to bring it back up to its pre-flood condition.

The impact of what politicians call the worst catastrophe since the war has magnified Germanys economic weakness. Europes largest economy is already dangerously close to the debt limit of 3% of GDP set by the EU stability pact. Decision-makers agree that the flooded regions need immediate assistance, but how to help has become a major campaign issue. …

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