Losing the Election in The East

After billions of euros in investment, dozens of government subsidy plans with hopeful names like ‘Rebuild East,’ and countless promises by politicians of every stripe over the past decade, the situation in the economically-depressed former East Germany remains unchanged.

The five new states consistently rank among the poorest in the country. Industry in the region is sputtering and new investment is almost non-existent. The unemployment rate topped 1.4 million in June, the most since 1990, and sank by only 10,000 in July, according to statistics released Wednesday. Young people are leaving the former East at an enormous rate.

No wonder chancellor candidate Edmund Stoiber and his Christian Democratic and Christian Social Union is making the East one of the focal points of his campaign.

“The upswing of the East has top priority in the Union,” he told reporters upon kicking off the Union’s “Offensive 2002” campaign in July.

That is bad news for Chancellor Gerhard Schröder, who has faltered in the four years since winning the 1998 election on promises of an East German upswing.

Should he be elected on Sept. 22, Stoiber promises new laws that would accelerate investment in the sinking construction industry, make it easier for small firms to grow and do a better job of protecting industry in the East.

To carry out the plans, he plans to create a “super minister” position in his cabinet who would be responsible for economy, labor and rebuilding the East. The designate is Lothar Späth, the former minster for the southern state of Baden Württemberg, and successful businessman.

Stoiber’s superman for the East

Späth is nicknamed “the clever one” in the East for transforming the struggling optical engineering firm Jenoptik into a rare East German success story. Sales reached two billion euro in 2001, a growth of 27 percent. Though Späth was helped out by state subsidies of two billion euro and slashed 16,000 jobs, he also did much to transform the company’s hometown of Jena into a modern, thriving city.

The Christian Democratic Union and Christian Social Union is hoping Späth can do for the rest of Germany what he did for Jenoptik.

“The rise of the East has a face in Lothar Späth,” said Edmund Stoiber, upon introducing the 64-year-old into his shadow cabinet in the middle of May.

It seems to have worked. Around 45 percent of those polled a month ago by the FORSA institute said Späth could do more for the East than anyone else. But voters in these new states have proved to be fickle in the past. Political reseachers say candidates can count on 70 percent of voters to change parties in the East, where traditional party affiliation is less important than in the West

Switch-hitters

Following reunification in 1990, voters overwhelmingly endorsed Chancellor Helmut Kohl, who promised them “blooming landscapes.” But in 1998, after eight years of billion-euro investments but little results, East German voters turned to Schröder and his pledge to make the east a top priority. He won 8 percent more of the vote in the new states than Kohl.

Now, Schröder faces the very real possiblity that those who voted for him will simply switch back to the CDU/CSU, or other parties.

Mindful of the failure of grand promises both Kohl and he made in the past, the Schröder team has made sure not to utter any sweeping statements this time around.

“We are against a competition of promises,” said Manfred Stolpe, former Brandenburg Minister and Schröder’s point man in the East, recently.

Rather, they are counting on concrete proposals such as the one this week by the Hartz Commission, which was assigned to reform Germany’s troubled labor market.

Hartz recommended tying investment into East German companies directly to the number of unemployed they either train or hire. Should the program work, up to 150 billion euro in investment could flow into East German company coffers within the next three years.

But the Hartz proposal has come under criticism from politicians, including some in the SPD, and the country’s buiness institutes. They charge the problem isn’t training, it’s a lack of industry to provide the trained people jobs.

And that is something Schröder can’t fix before the September 22nd election date.