East German Special Economic Zone considered

5 April 2004

BERLIN – The German government is considering creation of a special economic zone in economically depressed former communist East Germany, a spokesman said Monday.

“It’s an interesting idea,” said a spokesman for Infrastructure Minister Manfred Stolpe who noted, however, there could be problems getting such a zone approved by the European Union.

A report in the news magazine Der Spiegel said a blue ribbon commission advising Chancellor Gerhard Schroeder wants to create a “Special Economic Zone East” with sweeping deregulation.

Opposition conservatives back the idea of special economic zones but trade unions are fiercely against the proposal.

Eastern Germany has a mixed economic record with a few booming centres such as the cities of Dresden, Leipzig in Saxony state and the Jena region in Thuringia state.

But most of the formerly communist-ruled region has sunk into economic malaise with unemployment over 20 percent and declining populations as young people go west to look for work.

Proposals to create a special economic zone in the area after the 1990 German unification were rejected by then chancellor Helmut Kohl.

Instead, the government chose to pump huge amounts of cash into eastern Germany.

Since 1991 the state has made a staggering EUR 1.2 trillion in transfer payments to eastern Germany.

DPA

Subject: German news