An Eastern German Beacon of Hope

Harvested fields, deserted streets and half-timbered houses: At first sight, the town of Kölleda in the eastern German state of Thuringia looks like any other provincial nest in the middle of Germany's economic no man's land.

But those who look further soon realize that Kölleda, population 6,000, is one of the region's success stories. The town's real treasure actually lies a few kilometers (miles) away from the center.

There, visitors can find a business park with companies representing almost every sector. About 175 firms, many of them operating internationally, have set up shop here over the last few years.

The area is the pride of Frank Zweimann, who has served as Kölleda's mayor since 1992, when many of the town's residents began losing their jobs because the old East German factories began closing down.

But Zweimann didn't want Kölleda to go down without putting up a fight.

"We bet on the future," he told Deutsche Welle.

It was a smart decision to make: While Zweimann's colleagues complain about empty coffers, Kölleda's mayor has seen business tax revenues double over the last five years.

He's been investing the money in improving the town's infrastructure to attract even more companies. The business park is equipped with state-of-the-art water, electricity and telecommunications connections. A railway line and Kölleda's proximity to a highway allow firms to quickly transport their goods elsewhere.

Big time investors

All this keeps attracting more investors, including large international concerns. Carmaker DaimlerChrysler has spent €250 million ($306 million) on an engine production plant in Kölleda, choosing the town over 59 other contenders. The plant has created 400 new jobs.

The town's real success story can be found at Funkwerk. The company has been in business for almost 60 years and survived the collapse of the East German economy. Today, Funkwerk's 350 employees produce communications systems for trains throughout Europe.

Since its initial public offering four years ago, Funkwerk's revenue and profits have kept climbing. Last year, the company's profit came to almost €18 million. Funkwerk has been listed on Germany's TexDAX stock index since September, making it one of the country's top technology companies.

Not all is well in Kölleda

But the success hasn't rubbed off on all of Kölleda's residents. The town might be doing better than others, but every sixth person living here is still unemployed.

Zweimann blames this on the overall economic downturn, saying that the town cannot completely separate itself from what happens elsewhere in the country. The mayor expects unemployment to stay high for the foreseeable future.

But that's no reason to change strategy, he said, adding that Kölleda will continue to pump its surplus funds into the business park -- to attract more firms that will create more jobs.