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Business

Fears Still Mar Ties Between Border Towns

Business links between German border towns and their new EU neighbors in Poland should be flourishing but the discrepancies in pay and production costs are causing jitters in places like Frankfurt an der Oder.

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The river between Frankfurt and Slubice is shallow but fears run deep

The river Oder is quite shallow between the German border town of Frankfurt an der Oder and the Polish town of Slubice. So shallow in fact that a little more than a year ago, a handful of refugees would wade across the Oder every night from Poland heading for the west.

Things have changed in the past months, however. Earlier, Poles looking for work and a better life would cross into Germany. Now, ever since the EU's eastern expansion went ahead in May 2004, the envious glances have been crossing the Oder in the opposite direction.

Frankfurt an der Oder and Slubice share a common economic area halfway between Berlin and the Polish industrial metropolis of Poznan. For Martin Patzelt, the mayor of the German town, the dream of cooperation was boosted by the accession of his Polish neighbors.

That dream looked to become a reality when a new golf course was built in Slubice. "The planning permission was easier to get in Poland and the staff was cheaper there," Patzelt said. "But the management company (which runs the course) remained here in Frankfurt."

Deutsch-polnischer Grenzübergang Stadtbrücke Oder

It looked like the start of a beautiful relationship; German know-how on one side of the bridge and Polish labor on the other. However, the relationship does not seem to be working out as well for the Germans as it is for the Poles.

Hans-Jürgen Stroh, a businessman whose technology company R&M builds points, masts and signal arrangements for Deutsche Bahn, believes that the days of cross-border cooperation are numbered. R&M produces parts in Poland while development, distribution and high technology projects are based in Frankfurt. "If I'm honest," he said, "I would prefer to produce much more in the east."

Eastern workers paid a lot less

Stroh pays his workers 2,500 euros a month ($3,058) in Frankfurt while the ones in Poland are paid 550 euros and the ones in Romania just 60 euros. "I ask myself, 'why don't we move the work somewhere else where it is cheaper?'" Stroh rhetorically asks. There seems to be nothing stopping him. There are no more delivery delays from Poland now that the country's EU status means no duties to pay and if Romania joins the bloc in 2007, there will also be nothing preventing R&M moving there.

The cheap labor in the east is proving to be a worry for many business employees in the Frankfurt Oder area. With the prospects of some businesses moving their whole production facilities to countries like Poland and Romania, the likelihood of increased unemployment is creating a siege mentality in Frankfurt.

But some Frankfurt retailers can't see what all the fuss is about. They see the Poles not as new competition but new customers. "They don't just come here now to pick asparagus and strawberries," says perfumery owner Karin Schwarz, "they come here to shop."

Poles are welcome customers

Parfümerie in Frankfurt/Oder

Karen Schwarz (r) in her perfumery with her assitants.

And shop in Schwarz's shop they do. A good third of the customers in her perfumery come from Poland; some even travel from east of Poznan, more than 200 kilometers away. EU membership has given some Poles more disposable income to buy prestigious western goods.

Those who do not see the Poles as a threat are in the minority. When Schwarz interviewed prospective assistants for her perfumery from Slubice, in an attempt to hire a native Pole to help in her dealings with the newly liberated capitalists from over the border, she experienced some opposition.

Some of her German customers were hostile and even angry with her for not giving a German youngster a chance, something the local labor office also took offence to. In the end, she hired the perfect candidate who just happened to be Polish.

Hostilities arising from fear

The hostile atmosphere can be traced back to the late 1980s when the economic situation of the former East German town began to slowly deteriorate. The population of 87,000 inhabitants has now shrunk to 65,000 as people have left to find work elsewhere; 14 percent of the apartments stand empty and every fifth person in Frankfurt an der Oder is jobless. The fact that things are no better in Slubice is of scant consolation.

"People are simply afraid that things are going to get worse", Mayor Patzelt says. He himself has been criticized in the local press for looking eastwards. "This hurts but what should I do?" If the Frankfurters cannot understand the opportunities that exist over the border then, he says, there's not much he can do to convince them otherwise.

Lack of cooperation is a two-way street

Namensstreit um Frankfurter Pilsener

And it seems that the Germans of Frankfurt an der Oder are not the only ones who are stubbornly fighting cross-border cooperation. One year ago, the Frankfurter Brauhaus GmbH wanted to export its beer to Poland.

However, once the beer started to arrive in Slubice, a vicious campaign in the national Polish press eventually persuaded the company to abandon its attempt. The company then turned its eyes to the Spanish and Hungarian market.

The waters of the Oder may be shallow but the resentment on both sides of the river run a lot deeper.

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