E. Germans Ask: What Economic Recovery?

ECONOMIC indicators show that good times for Germans are just around the corner. But try telling that to people in eastern Germany.

With many still living in massive, dilapidated apartment blocks, driving on potholed streets, and contending with terrible phone service, most eastern Germans feel that recovery from the trauma inflicted by German reunification is still a long way off.

To many, the recovery talk coming out of Bonn is something completely at odds with their reality. They prefer, instead, to speak about their discontent and disillusionment.

``They [Bonn politicians] have no clue about what our life is like,'' says Hatmut Loeschke, a construction worker in Potsdam, the capital of the eastern state of Brandenburg. ``We in the East are treated as second-class citizens.''

Ministers in Chancellor Helmut Kohl's government have recently been heralding the end of the nation's worst recession since World War II. Statistics appear to back up government recovery assertions, giving Germans as a whole, and eastern Germans in particular, hope about renewed prosperity in coming months.

After a 1.2 percent decrease in real gross domestic product (GDP) in 1993, all-German growth this year could reach 1.5 percent, leading German economic institutes project. Inflation should hover around 3 percent, one percentage point lower than in 1993.

In eastern Germany - where the antiquated industrial base built by the communists has been undergoing a massive modernization since reunification in 1990 - GDP is projected to rise 7.5 percent this year, after a 7.1 percent rise in 1993.

Still too few jobs

The one unfavorable area in the economic picture is unemployment, which is expected to remain high for a while in both eastern and western Germany. The overall German unemployment rate is projected this year to be 9.9 percent, or around 4 million people. In the East, 1.22 million, or 16 percent of the working population, are expected to be out of work this year.

But eastern Germans say statistics, especially unemployment numbers, are deceiving. For example, the government's unemployment figures for the East do not include part-time workers or those dependent on state-run employment programs. If such underemployment were factored in, statistics likely would paint a bleaker economic picture in the East.

In addition, many easterners complain about an unequal wage scale that pays western German workers more than easterners. But when it comes to living expenses, such as housing, there is little difference now between East and West, people say.

``I'm as good a construction worker as anyone in the West,'' Mr. Loeschke says. ``Yet I have to work longer hours, and I earn less.''

A few eastern politicians say even when the region achieves economic parity with western Germany, it could take decades before attitudes in the East and West merge to form a common German outlook again.

``Economically, unification may take five to eight years. But in terms of social conditions, it may require generations,'' says Rolf Kutzmutz, a Potsdam City Council member who is a leader of the Party of Democratic Socialism, the successor to the Communists who ruled East Germany for 45 years.

``There are many differences that concern even the German language,'' Mr. Kutzmutz continues. ``The West German language was Americanized, while the East German language was Russified.... It will take time to straighten out.''

Some easterners deeply resent westerners, saying they do not appreciate the difficulties that easterners are having in making the mental adjustment from a communist to capitalist system. ``We have been betrayed and deceived,'' fumes Peter Schultz, a road repair worker from East Berlin. ``We lack 40 years of democratic experience, and no one lifts a finger to help us so that we, too, can make the most of the [democratic] system.''

The issue of restitution of East German property confiscated by the state during the communist era has compounded the resentment. Many eastern Germans complain that the system is unjust, favoring former owners over current residents, who portray themselves as having struggled to maintain properties over the past four decades. ``Restitution is one of the most difficult problems in eastern Germany,'' says Rainer Faupel, state secretary in Brandenburg state's Justice Ministry. ``It creates animosity.''

While firm legal guidelines exist for the return of property to the former owners, there are no laws governing compensation claims. That can lead to messy and protracted fights between residents and claimants, who do not want their property back but seek some form of payment. ``The uncertainty in the compensation issue is one of the biggest hindrances to investment [in the East],'' Mr. Faupel adds.

East German demographics

One way of examining the extent of despair and disenchantment in eastern Germany is by looking at its demographics. Those statistics paint a devastating picture - one comparable to, or perhaps worse than, the immediate post-war period.

Eastern German rates for births and marriages have plummeted, while death rates are rising, according to figures published in the May issue of Europe-Asia Studies. For example, the birth rate in 1992 was more than 50 percent lower than it was in 1989, the year the Berlin Wall fell. Meanwhile, the marriage rate was 62 percent lower than it was in 1989, according to the journal.

Citing demographer Nicolas Eberstadt, who is with the American Enterprise Institute in Washington, the journal says the trends in birth, marriage, and death rates show few signs of changing any time soon. It adds that, of all the former communist bloc states, eastern Germany has been most affected by the demographic catastrophe that has hit the entire region.

This October, Germans will have the chance to express their views on reunification when they vote in federal parliamentary elections. Few expect eastern Germans to be kind to the Kohl government.

``The next elections will show that people here are not content,'' says Faupel of the Brandenburg Justice Ministry. ``Many reactions are possible. The worst is that people won't vote. They'll simply flee from the process.''

Faced with such unpleasant scenarios, members of the Bonn government remain unwavering in their optimism. Addressing the Bundestag, or German parliament, Finance Minister Theo Waigel last week suggested that the coming recovery would lead to a ``second economic miracle.'' He was referring to the post-war German reconstruction effort, which is called here ``the economic miracle.''

``The pessimists and siren voices will not be mentioned even in the footnotes of history,'' Mr. Waigel said about the critics of the government's economic policies since German reunification.