West Pays For East

From Deutsche Welle:

"Western German cities want to end solidarity pact"

More than 20 years after reunification, a number of western German municipalities want to end their solidarity pledge to the East. Their argument: finances in many cities in the West are much worse off than in the East. Many towns and cities in the Ruhr Valley, once a bustling center of the coal and steel industries, face similar problems. Where riches once flowed, the unemployment rate now hovers around 20 percent in some areas, a figure nearly three times that of the country-wide average. Cities are rushing to close theaters, youth institutions and swimming pools, while still facing uncertainty about how to make interest payments, not to mention tackle the debts themselves. The Ruhr region cities of Oberhausen and Dortmund owe nearly 2 billion euros each, the highest debts in western Germany. "We just don't know what to do," said Oberhausen Mayor Klaus Wehling, of the Social Democrats (SPD). Together with fellow mayors throughout the region, he is sounding alarms and demanding an end to so-called solidarity programs with the states that once belonged to the communist German Democratic Republic (GDR). The legislation on solidarity packages requires German cities and districts in the West to pay sums of around 10 billion euros annually to the East. The goal of the funds, which go foremost for expansions and repairs on streets and train tracks, is to balance out the infrastructure and living conditions between the once-divided regions of the country. The original solidarity pact was reached in 1995. When figures showed in 2004 that the economic output of the former East was far from the levels in its western counterpart, the federal government reached an agreement with states and localities to extend the pact until 2019, resulting in a volume of 156 billion euros. That's money that many districts in the West desperately need, said Jörg Stüdemann, Dortmund's city manager, who called the solidarity pact an "absurd system." Stüdemann added that his city is only able to live up to its part of the pact by taking out loans. "For us, the pact is not at an end in 2019. We're going to be paying off these loans for decades," he explained. "We need to have a political discussion about the finances of cities and districts, including in the Ruhr Valley. Many swimming pools are already closed, and streets are not being repaired. Where are we heading with all of this?" The numbers speak for themselves. While a number of western German communities add to their debts each year, district coffers in the former East are overflowing. Germany's Federal Statistics Office reported that in 2010, the balance sheets of eastern German municipalities were in the black by 393 million euros. The eastern city of Jena announced recently that it hopes to be completely debt-free by 2025.

It does seem a little dumb that 21 years since the two Germanys were reunited that the western states are still supporting the eastern states. Back in the 1990s it was desperately needed to bring the two countries to the same standards, but if that hasn't been done by now then the money hasn't been used wisely. There are countries in Europe that were worse off than the former East Germany (ie Estonia which was part of the Soviet Union or Croatia which was part of Yugoslavia and then devastated by war) and yet they have managed to pull themselves out of their troubled, bankrupted past and thrive inspite all the economical problems around them. ^

http://www.dw.de/dw/article/0,,15837300,00.html