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Business

On the Edge of Germany, At the Center of Europe

In the decade since the fall of the Iron Curtain, an unusual piece of real estate at the edge of Germany has become the backdrop for an economic success story on the fringe of the European Union.

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Zittau's historic center is pretty but quiet after more than a decade of economic doldrums.

ZITTAU - On the way to a German factory in the Czech border town Hrádek, Holger Knüpfer finishes a conversation on his mobile phone and presses the off button.

"That was Saxony's Economics Minister," says Knüpfer, the economic promoter of the neighboring German town of Zittau. "I'm now waiting on a call from the Czech minister."

After 13 years on the job, Knüpfer, who looks a lot younger than his 58 years, has earned a well-deserved reputation as the man who makes things happen at the intersection of the German, Czech and Polish borders once labeled the "black triangle."

With Europe looking to stretch its borders south and east next year, Knüpfer is trying to maneouver the economically depressed region back onto the map.

There already signs of progress. In recent years, dozens of new companies have set up shop in Zittau, attracted by its concentration of highly qualified workers and its proximity to what economists predict will be a booming eastern European market.

Saxon charm and old-fashioned hustle

“As soon as the people there start making more money as a result of EU membership, they are going to buy a new car,” said David Schaefer, the head of American engine part manufacturer Cloyes, which delivers to companies like Opel and Skoda and opened in Zittau in 2002.

David Schaefer Cloyes Europe

David Schaefer, managing director of Cloyes Europe, points the way to the future

“The market is going to grow in the East, but the infrastructure is still not there for small and mid-sized companies," said Schaefer (photo). "The infrastructure is here in Germany, the education is here and there was a real desire to make us feel welcome here in Zittau.”

So far, Knüpfer has used his Saxon charm and good old fashioned sales hustle to bring 27 companies to Zittau since 1990.

When he started the job, he faced a city devastated by the fall of the wall. The textile industry that once employed 5,000 workers, now only employed 600. Businesses were closing everywhere, including an East German truck manufacturer that left more than 5,000 unemployed.

“We said at the beginning that we never wanted a big company again. We needed to attract small companies in order to have an industrial presence here once again," said Knüpfer. "This industrial presence is still too small, we know that. But we can at least now say that Zittau is once again an industrial center.”

Brains in the west, hands in the east

Keeping the brains of the company in the West while eyeing up the market and drawing on a workforce in the East has attracted other investors to Zittau as well.

Chemical coating company Techno-Coat came to Zittau to draw on the brain pool of science graduates from the Technical University Liberec and the Technical University Wroclaw across the border in the Czech Republic and Poland. Because their business is highly specialized, Techno-Coat can benefit from the research being done at the universities.

Knüpfer is already working on a network of cross-border contacts. He wants to stretch the business park across the border from Zittau in Germany to include Hrádek in the Czech Republic and Bogatynia in Poland.

A tiny sliver of Poland lies just across the river from Zittau that is only about a mile wide and is flanked by the Czech Republic on its other side.

Next page: Polish gas station, German employees