German towns face economic hit should US troops go | Business| Economy and finance news from a German perspective | DW | 08.06.2020
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German towns face economic hit should US troops go

US media report that nearly 10,000 American troops may be permanently withdrawn from Germany by September. That could have big economic consequences for the small towns where they have been based for nearly 70 years.

Reports that US President Donald Trump wants to permanently remove thousands of American troops from Germany have obvious geopolitical and security implications.

But, for those places in Germany that have been used to having large American communities in their midst for 70 years, the implications are much more local and immediate than those of tectonic movements in world politics.

It has not yet officially been confirmed that troop numbers in Germany will be reduced, but, according to The Wall Street Journal, the number of permanent US troops based in Germany will be reduced by 9,500 to 25,000 by September.

If that were to happen, it is not clear from which bases the numbers would be cut. That leaves a number of German communities to fret about what the headlines may eventually come to mean for their businesses and for their local economies as a whole.

Small towns, big presence

Small towns in the south of Germany, such as Grafenwöhr in Bavaria or Ramstein in Rhineland-Palatinate, have developed since World War II on the basis of the presence of thousands of US troops, their families and US civilians working at bases there.

In the case of Ramstein-Miesenbach, the official population of the town is less than 8,000 — miniscule by German standards. Yet there is almost the same number of US troops based at the nearby Ramstein Air Base, as well as almost double that number in terms of family members, meaning there are around three times as many people living in the area connected to the military presence as there are locals itself.

Infografik US-Militärbasen in Deutschland EN

That's even more pronounced in Grafenwöhr, where the local population of just over 6,000 is dwarfed by the American presence of more than 10,000 US military personnel, not including thousands more family members.

Other southern German towns and cities, such as Ansbach (population 42,000), Wiesbaden (population 290,000) and Böblingen (population 50,000) are also home to large numbers of US troops, civilians and their families.

Of hotdogs and bratwursts

A walk down any of the main streets of Grafenwöhr quickly illustrates why a large-scale American military withdrawal would have a deep economic impact.

Some of the businesses to be seen: Bank of America Military Bank, American Motors — Military Car Sales, Tortuga TexMex Bar & Grill, 'Cheers' American Restaurant and The Homestead Hotel. These aren't the kind of businesses you'll find in your average German town, understandably enough.

The website of The Homestead Hotel says it has been "providing the best and highest quality temporary lodging to military and civilians since 2006" while the delivery website for Cheers proudly declares it has "supported the troops since 1985."

A German-American Folk Festival takes place in the town every year, a major economic event and a boon for bratwurst and hotdog peddlers alike. Seven decades of American presence have left deep roots in places like Grafenwöhr. German-American families and businesses are extremely common.

Deutsch-amerikanisches Volksfest

A German-American Folk Festival takes place in Grafenwöhr every year

Around Germany, many local German civilians are employed both on the bases and in the various businesses serving the American communities. It is estimated that around 12,000 German civilians are employed in jobs connected to the US military nationally and many more indirectly through the provision of goods and services.

A steady decline

But a reduction in US troop numbers in Germany is nothing new. The number has been steadily falling for years. German government figures show that between 2006 and 2018, the number of US troops stationed in Germany more than halved, from 72,400 to the current figure of around 34,000.

Way back in 2001, a study by the University of Trier showed that the Ramstein Air Base and the nearby Spangdahlem Air Base contributed around €1.4 billion ($1.7 billion) to the local economy and supported about 27,000 jobs in the region.

Since then, the American communities connected with bases across Germany have become considerably smaller, and with that, their impact on local economies has declined.

Yet base closures or reductions in troop numbers understandably have major effects on local economies. The closure of the army garrison at Bamberg in northern Germany in 2014 had a significant economic impact and many German citizens in towns connected to the US military are strongly opposed to base closures.

Ramstein Air Base bei Nacht

The German government pays considerable sums for the upkeep of places such as Ramstein Air Base (pictured)

Not quite 'land of the free' though

There is another economic angle to the presence of the US military in Germany.

While Donald Trump has consistently criticized Germany for not meeting its obligations with regard to NATO spending, the Federal Government does spend millions on the support of US bases in the country. Last August, it was revealed that the government had provided €243 million ($270 million) since 2012 to support US troops based in the country.

The sum was related to benefits for former workers and operating costs associated with maintaining buildings and other properties. So although the presence of US military personnel and their families does provide a major economic boost for the communities in which they are based, they do not come free to the Federal exchequer as a whole.

The future

It remains to be seen what precisely the consequences of the latest reports for places such as Ramstein-Miesenbach or Grafenwöhr will be. Even if the figure of 9,500 troop withdrawals is accurate, the phaseout may be spread out across all bases in Germany, mitigating the impact on each particular base and giving local communities a little more leeway to adjust to changing economic circumstances.

But it is also likely to make them consider and prepare for a more long-term possibility: that one day — all the troops may be gone.