Leipzig, Germany, is a far different place that it was during the grim, gloomy days when the Communist state controlled commerce.
Photos by Krisztian Bocsi • Bloomberg News,
This Porsche Macan got a paint job at the newly expanded Porsche factory in Leipzig. The factory is one sign of the city’s economic revival.
You'd be hard-pressed to recognize the old East Germany these days
- Article by: Leon Mangasarian
- Bloomberg News
- April 5, 2014 - 5:44 PM
LEIPZIG, Germany – Twenty-five years ago, this city was the center of protests that exploded across communist East Germany and ultimately brought down the hard-line regime of Erich Honecker and then the Berlin Wall.
Back then, the few people who owned cars mainly drove Trabants running on a stinking mix of gasoline and oil. There were strip mines on the edges of the city. The airport was a third-rate East Bloc hub served by Soviet Aeroflot and the not-at-all-lamented East German national airline, Interflug.
“The city was crumbling, grim and gray,” said Dietmar Busse, 48, a Leipzig resident who took part in the 1989 anti-Communist protests and is now a construction engineer for TAG Immobilien. “All the roads were kaput except the one used by Honecker for the two international trade fairs each year. They’d paint the facades and plant flower beds along it so he’d have a nice Potemkin village.
“We used to joke that the airport was a country landing strip,” Busse continued.
A quarter of a century later, the Leipzig airport operates 24 hours a day as the European hub for global flights by Deutsche Post’s DHL parcel and airfreight service.
In December, DHL began a $206 million expansion that will double the facility’s size.
As for automotive culture, Leipzig is now home to a Volkswagen factory producing the Porsche Cayenne SUV and the new Macan SUV. Down the road, there’s a BMW plant churning out four BMW models, including the i3 electric car.
Other stories of renewal
Leipzig is only one story of renewal in the East since the reunification of Germany in 1990. Dresden is another, Potsdam another, Jena another. The transformation of the East hasn’t been easy, and, above all, it hasn’t been cheap: Public investment in the East since 1990 has reached 1.8 trillion euros — an amount roughly equal to Germany’s gross domestic product at the time of reunification.
It has been a commitment without modern parallel; this is the age of separatism, not of integration. And it has worked. “German unity has turned out much better than people thought,” said Fredrik Erixon, director of the European Centre for International Political Economy in Brussels. “Back in 1990, the economic cognoscenti almost all believed it would end in tears.”
Instead, Germany’s economy is the largest and among the healthiest in Europe, producing more than 25 percent of the GDP of the euro area. German GDP will expand 1.8 percent this year and 2 percent in 2015, the Economy Ministry forecast in its annual economic report published on Feb. 12. Unemployment, which stood at 6.8 percent in February in seasonally adjusted terms, may fall to a post-unity low this year. Germany had a balanced budget in 2013, its first since reunification.
“Size matters in global political and economic clout,” Erixon said, “and without its eastern wing, Germany wouldn’t have been as strong a factor in European politics over the past two decades.”
Germany has devoted 33.9 billion euros to the transportation infrastructure in the East, which now boasts the finest autobahns in this car-crazed nation. Remote sections, such as the A15, which hits the Polish border at the German city of Forst, and the A20, which skirts the Baltic Sea, are loved by speedsters because the pristine, pothole-free conditions allow them to get their Porsches and BMWs to more than 250 kilometers an hour.
The eastern infrastructure is now so modern that western Germans are grumbling and demanding equal attention for their comparatively decrepit bridges, roads and railways. “Now, it’s West Germany’s turn,” Hannelore Kraft, prime minister of North Rhine-Westphalia, Germany’s most populous state, told the business newspaper Handelsblatt in 2012.
Eastern Germany, however, still lags behind the West in most economic indicators. The unemployment rate — which rose to 18.7 percent as recently as 2005 — was 9.9 percent in February, compared with 6 percent in western Germany, according to the Federal Labor Agency. The east, with about 20 percent of Germany’s total population of 81 million, produces 15 percent of the nation’s GDP. Wages and salaries in the east are on average 70 percent to 80 percent of those for comparable work in the west.
Struggles like these suggest that 25 years isn’t a particularly long time when set against 45 years of Communist rule.
“The Communists meant four decades of being cut off from the global economy,” Hartmut Vorjohann, Dresden’s Mayor of Finances, said in an interview. “This all had even graver, deeper and more sweeping consequences than we imagined 25 years ago when we set about rebuilding East Germany.”
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