Apr 20, 2014, 7:03 am (BST)
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Germany's western rust belt resents blossoming east
 
WITTEN/FREIBERG, Germany, March 25 (BSS/AFP) - 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 percent versus the national
average of 7.4 percent) 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
percent of German towns are in a critical financial state,
although things have improved rapidly in the last two 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 three 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."
 
 
 
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