Leipzig Thriving Under Reunification

Politically, the reunification of Germany was, without a doubt, a long-sought goal in the West. But economically, the reports coming from the former East Germany are disheartening. Eastern Germany suffers from unemployment rates about twice as high as the west. And while some eastern cities are expanding, 15 years in a unified Germany has had little effect on others.

It is easy to fall back on clichés when talking about the former German Democratic Republic, as Christian Social Union leader Edmund Stoiber did during the September election calling east Germans "frustrated" people. But even in Leipzig, one of eastern Germany's success stories, the situation isn't so easy to pigeonhole.

Construction booming

Pedestrians and drivers in Leipzig should be accustomed to the cranes, construction zones and scaffolding that require ever-changing detours and head-ducking -- they've lived with it since the middle of the 1990s.

German reunification set loose a flurry of construction projects to keep the city from deteriorating more than it did while under communist rule. Today's projects are modernizing the city again by building a new subway system, widening roads and putting up stylish new shopping areas. The city is also the new home to Porsche and BMW factories and a logistics hub for the DHL package delivery company.

But even the construction and new factories cannot hide the fact that 20 percent of people in Leipzig don't have jobs and depend on welfare to make ends meet.

"We've done an unbelievable amount in the past 15 years," said Leipzig's Mayor Wolfgang Tiefensee, who enjoys comparing his city to European metropolises like Paris and London. "But there's one important field where we haven't been successful: the labor market."

Small companies suffering

For the past 25 years, Dietmar Rauch has worked in a household goods store in one of Leipzig's more stylish neighborhoods where the bars and cafes are usually full of people. Though the 47-year-old hasn't shed a tear for the passing of the communist government, the euphoria he felt 15 years ago has been sobered by his fight to stay above water financially.

"Back then, I worked 12 or 14 hours a day, but I also took two three-week vacations a year and made money," he said. "Now I work the same amount of time, don't make anything after paying for expenses and don't go on vacation any more."

Although others in the city echo Rauch's comments, there is no general sense of despondency, and most people in Leipzig believe their city is going to continue improving. Martin Rosenfeld, an economist at the Halle Institute for Economic Research, agrees with the optimists and said that eastern Germany stands to have a good chance in the European market if it manages its investments correctly.

Subsidies were mismanaged

"The failure has been with how the funds have been spread around the region without any appropriate central oversight," Rosenfeld said. "All East German states were offered the same conditions and the municipal infrastructure was improved everywhere with the same kind of industrial parks springing up all over."

Over the past 15 years, the German government has transferred 1.3 trillion euros ($1.6 trillion) to the former East German states to help bring them up to speed with the western states. Reports released in the run-up to the 15th anniversary of reunification showed much of the money was wasted on inefficient projects incapable of bringing real growth to the area. Current plans call for the subsidies only to be given to projects and companies that can prove they have good chances of surviving in the marketplace and creating jobs locally.

Just how successfully the new concept will be implemented remains to be seen, but Dietmar Rauch said he hopes whatever new money comes into Leipzig invigorates the city. He'd like the opportunity to go on vacation again.