Keeping Eastern German Cities Alive

It is only 38 kilometers (24 miles) from the highway exit to the city of Schwedt, near the Polish border. But the drive, on a two-lane road, takes three-quarters of an hour. As a result, Hubert Schrödinger, who runs Georg Leinfelder Papier in the town, prefers to transport his products by water, via the nearby Oder River.

"The link is not yet very good," he said. "We hope that the canal will be beefed up in the near future so that we can transport up to 1,500 tons. Exports are a significant part of our business."

Developing the Scwedt's waterways is a project into which millions of euros will flow in the next few years. The goal is to stabilize the eastern German industrial centers. Schwedt is an economic oasis in the state of Brandenburg -- which is fighting high unemployment and the migration of its young people. The maintenance of the petroleum processing industry and paper manufacturing was already a key component of the program that began just after German reunification, during the administration of German Chancellor Helmut Kohl.

A big step forward

As part of the program, private investors have, for almost 15 years, received a lot of assistance.

The Bavarian paper company Georg Leinfelder, for example, bought the formerly public paper factory for about 880 million euros ($1 billion). A quarter of that was paid with public money. The company's latest acquisition is a machine that can recycle old paper into high quality white paper. Alexander Moritz, who handles the machine, is convinced that it will help the company hold its own in the highly competitive paper market.

"We want to produce 300,000 tons a year with this machine," he said. "That is a big step forward. If I wouldn't have any more prospects here, I would probably leave."

A sigh of relief

The 24-year-old got his training in paper manufacturing at the factory. He was lucky, seeing as 30 people apply for every available traineeship. Unemployment in the Uckermark region, where Schwedt is located, is at 23 percent. It is a large area but with little industry. If a company such as Georg Leinfelder -- with 760 jobs -- were to fold, it would be a disaster. As a result, the local government pulled out all the stops when dealing with the European Union officials who monitor fair competition in EU markets -- in order to ensure the paper company received the millions of euros in financial assistance for its expansion that it needed.

Afterwards, Schwedt's mayor, Jürgen Polzehl, breathed a sigh of relief. More tax revenue shortfalls are the last thing he needed. The city already pays one-third of its bills on credit. And medium-sized companies have not been able to keep the city's young at home -- one-third of Schwedt's inhabitants have moved away since 1990. Meanwhile, the average age has climbed from 33 to 44 since 1989. Each new birth is celebrated in the local newspaper.

Shrinking cities are typical eastern German phenomena. In order to prevent such places from turning into ghost towns, officials have been tearing down the large concrete high-rise apartments that dot eastern Germany, spending 40 million euros in the past 15 years in the process. It hasn't been a simple task but it makes for more attractive city centers and allows for more parks to be developed.

"We have a far more attractive city today than in 1989, when everything was gray and in disarray," said Polzehl.

And such a development helps keep such cities alive.