Pessimism dogs eastern Germany despite economic gains

Pessimism dogs eastern Germany despite economic gains

The city of Jena in eastern Germany is a world-renowned centre of expertise in the field of optics
The city of Jena in eastern Germany is a world-renowned centre of expertise in the field of optics. Photo: Tobias SCHWARZ / AFP/File
Source: AFP

With its shiny new housing estates, scores of building sites and bustling city centre, Jena represents the fresh face of the former East Germany.

"The former East German states now play a full part... in the success and strength of our economy," Chancellor Olaf Scholz said at a meeting in the city this week.

Economic problems and a general sense of being disadvantaged are often cited as the reasons why support for the far-right Alternative for Germany (AfD) is particularly high in the once-communist East Germany.

The AfD emerged as the biggest party in eastern Germany in June's European Union elections and also looks set to make big gains at regional polls in Thuringia and Saxony on Sunday.

But in fact the former East German states have racked up a slew of positive economic data in recent years, with investment on the rise and unemployment falling.

Read also

Serbia leader plans to seal French fighter jet deal with Macron

"For the past 10 years, growth in (eastern Germany) has been higher than the national average," Axel Lindner, a researcher at the IWH Halle economic institute, told AFP.

As the economic centre of Thuringia, Jena is a world-renowned centre of expertise in the field of optics, with a thriving start-up scene and renowned universities.

In neighbouring Saxony, the city of Dresden has become a hub for the semiconductor industry.

'Top performers'

Eastern Germany's GDP will grow by 1.1 percent this year, almost three times the national average, according to the IFO economic institute, while unemployment fell from 11.6 percent in 2013 to 7.8 percent in 2023.

While the German economy as a whole has stagnated over the past 12 months, partly due to its reliance on exports, the economy in the east of the country, dominated by family businesses and services, has held up well.

Read also

Nigeria on the path to food and nutritional self-sufficiency, says FG

Eastern Germany has also been chosen as the location for several large industrial projects, such as Tesla's electric car plant in Brandenburg, the state that surrounds Berlin.

German Chancellor Olaf Scholz visited Jena ahead of regional elections on Sunday
German Chancellor Olaf Scholz visited Jena ahead of regional elections on Sunday. Photo: Jens Schlueter / AFP
Source: AFP

Partly thanks to the factory, Brandenburg was able to rack up growth of 2.1 percent last year while the country as a whole went into recession.

"Something has happened that we didn't expect: we are the top performers," said Carsten Schneider, the government's commissioner for East German affairs.

Consumer purchasing power has also risen faster in the east than in the west, thanks to recent increases in pension payments and the minimum wage.

Incomes and wealth are still lower in the east, but the gap is narrowing -- wages in eastern Germany were around 91 percent of those in the west in 2022, compared with 80 percent in 2015.

However, the picture is different in the region's rural areas, where the mass exodus of workers and an ageing population and have led to a stubborn sense of pessimism.

Read also

African country competing with Nigeria begins shutting down oil Field

Population decline

According to a study by the IW economic research institute in Cologne, the shrinking population in rural areas could be the root cause of the region's high number of protest voters.

"There is a correlation between population decline and pessimism among residents" fuelled by a sense of deprivation and the "disappearance of public services", Matthias Diermeier, an author of the study, told AFP.

Ironically, the reduction in immigration called for by the AfD could exacerbate this problem and harm the economy, worsening a growing shortage of skilled workers.

Business leaders have warned that a victory for the far-right AfD in German regional elections could have damaging consequences
Business leaders have warned that a victory for the far-right AfD in German regional elections could have damaging consequences. Photo: Jens Schlueter / AFP
Source: AFP

By 2030, the working-age population in the eastern regions of Germany is set to fall by 800,000, according to government estimates.

In the run-up to the elections in Saxony and Thuringia, many business leaders have warned the far right could threaten economic development, stressing the importance of diversity and openness.

It was in Jena that the Prussian army was defeated by Napoleon in 1806, sparking the beginnings of German nationalism.

Read also

Chinese EV giant BYD posts 24.4% rise in profit

But the AfD scored only 15 percent of the vote in the city in June's European elections, well below the rest of eastern Germany.

"When you have money in your pocket, you're automatically less likely to vote for the extremes," Thomas Nitzsche, the mayor of Jena, told AFP.

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.