Germany’s western rust belt resents blossoming east

WITTEN/FREIBERG, Germany – Visitors to Witten in western Germany could be forgiven for thinking they had landed in the ex-communist east, where dreams of renewal since the Berlin Wall’s fall have often given way to bitter disappointment.

A ramshackle town hall, potholed streets, boarded-up shops — little resembles the world’s image of a global powerhouse still cruising along on the momentum of West Germany’s post-war “economic miracle”.

But Witten is not alone in the rust belt of North Rhine-Westphalia (NRW), Germany’s most populous state, which is heading into a bellwether election in May and which has seen a steady decline of its mining and metalworking sectors.

Many in this town of 100,000 people point a finger at the former communist eastern states, where major subsidies continue to prop up industry and infrastructure nearly 22 years after German reunification.

The local steel plant employs 1,750 people, down from 7,500 four decades ago, said the town’s official in charge of public finances, Matthias Kleinschmidt.

“We have had a deficit every year since 1992” save one, he told AFP.

Its elevated jobless rate (8.9% versus the national average of 7.4%) and serious social problems weigh heavily on the finances of the town, which covers its own dole payments and child welfare budget.

The federation of local governments estimates that 10% of German towns are in a critical financial state, although things have improved rapidly in the last 2 years thanks to a robust national economic recovery.

But in Witten, the signs of crisis are pervasive, with a public swimming pool mothballed and the commons unkempt.

“Services have deteriorated,” Kleinschmidt admits.

In the east of the country near the Czech border, Kleinschmidt’s counterpart in Freiberg in Saxony state, Sven Krueger, is far more upbeat.

The town of 40,000 people has positioned itself as a major player in the booming solar energy sector since 2007 and its coffers are full.

Freiberg has restored its medieval castle and its charming high street while investing heavily in municipal creches.

Mayors in debt-mired western towns eye such success stories with resentment and in NRW, where nearly one-quarter of the German population lives, officials heading into a pivotal election on May 13 are seizing on the issue.

The former communist east still benefits from a so-called solidarity pact, which foresees direct payments from the west to lift the region out of its economic malaise after four decades of Marxist state planning.

The mayor of Gelsenkirchen in NRW, Frank Baranowski, says fiscal “distribution based on geography is no longer appropriate in this day and age.”

Cities in the region such as Dortmund and Duisburg have also blasted the payments as completely out of touch with Germany’s contemporary realities and call for payments according to need.

Witten says the levy now costs it 3 million euros ($4.0 million) a year, and has paid out 60 million euros since 1991.

“But this debate leads us nowhere,” Kleinschmidt said, particularly as the pact the levy is based on stipulates that the payments will continue until 2019 and there are no plans to move that date forward.

“The government is not questioning this at all,” said Christoph Bergner, state secretary at the federal interior ministry.

Meanwhile in Freiberg, which has dispensed with solidarity tax revenues for the last five years, Krueger calls the criticism petty and one-sided.

“The west got financial help from the Americans to rebuild (after World War II),” he said. “They had 40 years to build themselves up and we’re only supposed to get 20?”

Krueger says “good fortune” also played a role in Freiberg, which the federation of towns in Saxony calls an exception for the region.

The east still has an unemployment rate nearly twice as high as the western average and, apart from some pockets that have rejuvenated their industry, suffers from daunting structural problems.

Even in Freiberg, “we have our work cut out for us,” Krueger said, noting that the roads in the area “don’t even deserve the name”.

But Finance Minister Wolfgang Schaeuble, who was the chief architect of national reunification, agreed it was unlikely that the solidarity pact would be extended beyond 2019 in its current form.

“We will have had 30 years,” Krueger said. “That’s OK.” – Agence France-Presse