Seventeen years after German reunification, the situation in the east of the country leaves much to be desired. "The situation in the East remains extremely problematic," Wolfgang Tiefensee said during the presentation of his report. "So far we have not been able to create a stable, self-sustaining economy there." Labor productivity in the east of the country still lags catastrophically behind that of the "old states" – on average, an eastern worker produces 30% less output than his western colleague – and, incidentally, he earns on average only 77% of the equivalent wage in the west. The average unemployment rate in the former GDR is 14.7% – almost three times higher than the national average. In some depressed regions, such as rural areas of Mecklenburg-Western Pomerania, the unemployment rate reaches 25%.
According to Tiefensee, the only solution to the problem is to continue the policy of subsidizing the eastern regions, whose tax capacity, due to weak economic development, is still less than 40% of that of the western federal states. Until now, the main financial support for the eastern regions has been the so-called "solidarity surcharge," introduced in 1991 on a wave of enthusiasm among West Germans. Today, every German living in the west of the country pays an additional tax of 5.5% on the total amount of income tax they pay to the state – this money goes to a special federal fund that subsidizes the development of the eastern regions. Companies registered in the west also pay 5.5% of their corporate income tax into the fund supporting the eastern states. In total, through the solidarity surcharge, the German state collects just over €10 billion annually, which is mainly spent on large infrastructure projects in East Germany.
The fact that this practice continues almost 20 years after reunification causes extreme irritation among residents of the western regions – according to opinion polls, 72% of them advocate abolishing the solidarity surcharge. The German Taxpayers' Association even filed a lawsuit with the Federal Constitutional Court demanding that the tax be declared illegal, because, although it is a federal tax, it does not apply throughout the entire territory of Germany. Taxpayers are particularly irritated by the fact that significant sums from the fund supporting the eastern states go to economically pointless projects designed to satisfy the vanity of eastern politicians. For example, almost €1 billion was spent on converting a former military airfield in the tiny Thuringian town of Nobitz into a civilian one – and today Altenburg-Nobitz Airport handles only one flight per day, and that is operated by the discount carrier RyanAir.
Nevertheless, despite strong opposition from voters, Tiefensee insists on extending the practice of collecting the solidarity surcharge until 2019. Also, the policy of granting a 30% income tax discount for companies relocating their production to the east should be extended for at least another year – according to previous plans, this tax break, which costs the German budget €600 million annually, was to be abolished as early as 2007.
The biggest problem for East Germany remains depopulation. The lack of job prospects forces residents of the eastern regions to move to West Germany. In the past 17 years, the population of the eastern states has decreased by 11%, or 1.7 million people, and today stands at 13.5 million citizens. According to experts' forecasts, if this trend continues in the coming decades, by 2050 only 12.2 million people will live in the territory of the former GDR. To understand how serious this situation is, it is enough to recall that the reason for the construction of the Berlin Wall in 1961 was precisely the mass migration of Germans to the West: from 1949 to 1961, 2.6 million people, or 13% of the population, fled the GDR. The most dangerous aspect of depopulation is that the first to leave for the West are young and highly qualified Germans – as a result, the eastern regions lose investment attractiveness, and the tax base shrinks to a minimum, making it impossible to pay social benefits to the unemployed and pensioners remaining in eastern cities.
In addition, a disproportionately large share – over 60% – of those leaving the east are young women. Already today, the population of the former GDR consists predominantly of men. In some regions, there are fewer than eight women for every ten men. In some places, the situation has become so critical that local authorities promise to pay bonuses to women who move to their city. For example, a woman who moves to the Saxon town of Freital and signs a three-year rental contract receives €2,000 from the authorities. The Thuringian city of Jena, which boasts a more stable demographic situation, pays a bonus of €120 to any citizen of any country who comes to the city even for a couple of months – as long as the new resident is under 30. "The absence of women in eastern Germany is an extremely dangerous situation. Today, entire regions are emerging there, filled with men. They may have a temporary girlfriend, but they will never have a permanent woman. This is a terrible situation, extraordinarily dangerous. The potential for aggression accumulating in these regions can be compared to what once brought the Nazis to power," shares his concerns FAZ publisher and author of the book "Minimum," dedicated to German demographic problems, Frank Schirrmacher.
Frank Schirrmacher's fears are well-founded. Although the share of foreigners living in the former GDR is significantly lower than in the western regions (for example, in Mecklenburg-Vorpommern the number of foreigners is no more than 1.5% of the population, while in Frankfurt am Main or Stuttgart foreigners make up 30% of the population), right-wing radical sentiments are extremely popular here. The right-wing radical National Democratic Party (NPD) is even represented in the parliaments of two of the six eastern federal states: Mecklenburg-Vorpommern and Saxony. According to law enforcement agencies, there are entire settlements in the former GDR where people with non-Aryan appearance are not recommended to enter: the so-called No-Go Areas, 'zones where you should not go'.
'In the east of the country, for a foreigner with dark skin, the risk of being attacked is significantly higher than in the west,' confirms the chairman of the parliamentary commission on internal affairs, Sebastian Edathy, in his report. At the end of August, the whole of Germany was shocked by the news from the Saxon town of Mügeln: during a folk festival, about 50 drunken Germans, shouting slogans 'Foreigners out!', attacked eight Indians and brutally beat them. The neo-Nazis chased the victims through the streets of the city until they barricaded themselves in a pizzeria, after which the agitated neo-Nazis smashed the windows of several shops and damaged parked cars. Although the incident in Mügeln is not an everyday occurrence in Germany, it perfectly demonstrates the potential for xenophobia and aggression that lies hidden in the small, depressed East German towns.
Nevertheless, according to Wolfgang Tiefensee, in the long term, the eastern regions of the country may become quite attractive and reach the level of the western part of the country. Already today, economic growth in the East is 3%, which is 0.3% higher than the corresponding figures in the western regions. 'I believe we simply have to think in terms of 10, 15, 20 years. The gap between East and West is narrowing, and that's good news. The bad news is that it is narrowing too slowly,' Tiefensee said.
In any case, it is now quite obvious: the unification of Germany turned out to be an incomparably more complex and expensive project than was promised in the early 1990s by Helmut Kohl's government. The eastern regions are indeed integrated into the German economy, but this integration will still need constant support and careful attention for many years to come – otherwise, a rejection reaction could start in the east of the country at any moment.
Sergey Sumlenny.
Expert