Eastern Germany a Model for Change?

Something is stirring in eastern Germany. The region long dismissed as a drag on Europe’s largest economy is beginning to shape the country’s response to the pressures of globalization.

An increasingly influential group of politicians, businesspeople, economists and professionals views the east as an exemplar of flexibility in the face of turbulent change and a growing source of ideas for confronting it.

It is hard to underestimate the challenge such a shift represents for a country still adjusting to the earthquake of reunification more than 15 years ago. The west’s “victory” over the east, symbolized by the fall of the Berlin Wall in 1989, remains part of the national narrative.

But the view of the east as a source of innovation is gaining ground, aided by the circumstance that, for the first time in the country’s postwar history, it has two east Germans at its helm.

Since winning power last November, both Chancellor Angela Merkel and Matthias Platzeck, chairman of the Social Democratic Party, which governs with Merkel’s Christian Democrats in a “grand coalition,” have sought to present themselves as political leaders for a unified nation.

Yet they have not shied away from extolling their eastern heritage. Both frequently refer to their “openness to change,” citing the experience of living through the collapse of communist East Germany and the region’s integration with the west.

As Merkel said in her inaugural speech as chancellor last year, unity “was the biggest surprise of my life, and after this, one believes many things are possible.” Last month she went further, telling journalists in the eastern city of Halle: “The fact that easterners have been, and still are, ready to accept such transformations is a good sign for Germany as a whole, because the whole of Germany must change.”

The message that economic and welfare reforms to improve international competitiveness are unavoidable is not in itself radical. It was former Chancellor Gerhard Schroeder’s mantra too. What has stirred controversy is the suggestion that Germany could learn from the east.

Amid a national debate on the successes and failures of reunification, it has become orthodox to blame the huge financial transfers to the east for slowing Germany’s economic recovery. Easterners, meanwhile, have been stereotyped as ungrateful.

The east initially appears an unlikely pacesetter for reform. The six eastern states, with a population of 16.9 million, remain Germany’s weakest region. Average wages are stuck at only 71% of those in the west; unemployment, at 19.5%, is twice the western average and large investors are rare.

Outward migration continues apace. Since 1989 about 2 million people have left the region, and more than 60,000 still migrate annually to find work. In an attempt to stem the flow, the federal government is committed to transferring about 80 billion euros ($96 billion) in welfare and reconstruction funding to the region every year until 2019.

Nor, on the face of it, has the region emerged as a model of economic transformation. Former Chancellor Helmut Kohl’s promise of “blossoming landscapes” in the east raised false hopes. And unfocused infrastructure spending has distorted economic development.

So on what basis could eastern Germany be considered a national beacon? In support of the contention that the west has much to learn from even a demonstrably underperforming east, Klaus von Dohnanyi, a former west German government minister who has been a tough critic of reconstruction efforts, points out that most easterners have had to rebuild their lives since 1990. Like Merkel, he stresses the openness to change that has been a necessary byproduct of reunification.

“It’s on the issue of the mentality [of easterners] where people can look from the west to the east and say, ‘It’s true, we don’t need to be afraid of change,’ ” he said.

Some east Germans have switched careers several times. That includes Merkel and Platzeck, scientists who entered politics, said Michael Behr, an industrial sociologist at Jena University.

Christoph Links, an east German publisher, recalled a recent school reunion at which he discovered that all his former classmates had new careers. “Even the two former Stasi [secret police] officers have new jobs; one is an estate agent, the other a shopkeeper.”

This contrasts with the rigidity of many career paths in the west, where freeing up sclerotic labor markets has become an overriding but still mostly unfulfilled political goal.

In the east, in contrast, a shortage of jobs has made employees more willing to relocate or work longer hours for lower pay, fewer holidays and less protection from wage bargaining agreements. That in turn has boosted the region’s business appeal.