Investors included Intel and the government of Dubai. It went into bankruptcy two years ago.Īnother costly flop was a 1.5 billion-euro semiconductor venture that was supposed to create 1,000 jobs in Frankfurt an der Oder, a city near the Polish border.
The zeppelin cargo-lifter tops the list, but there was also the Euro-Speedway Lausitz, a newly constructed Formula One racecourse near the town of Cottbus that received 123 million euros in subsidies but never attracted a Formula One race. But only a small portion of the money was invested in job-creating enterprises, and many of those investments have turned out to be spectacular failures. These days Dresden and Leipzig are looking better than many of their western counterparts. The result has been new autobahns and rail lines throughout the east, improved telecommunication links and refurbished cities. "They are not really poor compared to the west, but the problem is they know they are getting a gift from the west they know this income is not earned by their own labor."Īnother big chunk of money went into upgrading infrastructure. "The gap has been made up by transfers," Ragnitz said.
As a result, per-capita gross domestic product, an assessment of economic output, in eastern Germany is only 64 percent of what it is in the western part of the country, but disposable incomes in the east have risen to 87 percent of the levels in the west. The idea was to equalize the standard of living for the two Germanys. Most of the cash that flowed eastward has been consumed by social welfare spending-pensions, unemployment benefits and artificially created jobs. and when the labor force is shrinking, it is difficult to attract more firms to those regions," he said.Īs German officials tally the mounting cost of reunification in October 1990, many are wondering where all the money went. Joachim Ragnitz, an analyst at the Halle Institute of Economic Studies, predicted that the overall population in the east could shrink by 25 percent and that small towns and villages, especially in the border areas near Poland and the Czech Republic, could lose 40 percent of their population.
"We have six kids, and five have left," Helga Fenn said of her children who moved to western Germany in search of employment. Everybody had a job, and the children stayed around to take care of aging parents. The Fenns said they didn't want to sound like typical Ossie complainers but that back in the good old days, things really were more settled and secure. Fenn and his wife, Helga, both retired carpenters, came to a preview of Tropical Islands a few days before the official opening.