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Eastern German town benefits from boom in nearby Poland

LÖCKNITZ, Germany: For years, Germans from the town of Löcknitz drove across the Polish border to buy low-cost cigarettes and alcohol. Today, Poles like Marcin Baryliszyn go the opposite way to start companies and build homes.

Baryliszyn is one of several dozen Polish entrepreneurs who have set up in Löcknitz, providing a boost to the town of 3,000 people near the border in one of the poorest regions in Germany.

"It's quite astonishing," he said. "A few years ago, people said once Poland joined the European Union, Germans would rush to Poland to buy everything up. But it turned out quite differently," Baryliszyn added. "Cheap property is a key factor."

At first glance, Löcknitz looks like many other eastern German towns: Almost one in four people is unemployed, discount shops line its streets and the far-right National Democratic Party, or NPD, received 18 percent of the vote in a recent election.

But unlike many bleak towns in the former communist East Germany, where birth rates have slumped and apartments stand empty because jobless workers have moved to wealthier western states, brightly painted family homes have mushroomed in Löcknitz, and the town now needs a bigger kindergarten.

Like Baryliszyn, many investors and Polish buyers come from the booming port city of Szczecin, which is less than a 30-minute drive from Löcknitz.

Since May 2004, when Poland joined the European Union, the jobless rate in Szczecin has dropped to 6.6 percent in January from more than 16 percent - less than a third of the current rate in Löcknitz.

"Szczecin is our trump card," said Lothar Meistring, the mayor of Löcknitz, where real estate agents say property prices are as much as 20 percent lower than in the Polish city.

To many Poles, "Löcknitz is the gateway to the western world," Meistring said, sitting in his office next to a Polish hairdresser and close to a real estate agency, which has offers advertised in both Polish and German.

About 200 Poles have moved to Löcknitz over the past few years, and 40 businesses have been set up, the mayor said. Although most of those were one-person businesses and only a handful of direct jobs was created, Meistring said each Pole who built a factory or home had helped local companies, shops and schools.

"Our population is growing," he said. "We have to build a new kindergarten. Not just because of Polish children, but partially due to them. We have had record births recently."

Szczecin's mayor, Piotr Krzystek, said it was a trend among young people to try their luck in Germany.

Since many Germans have deserted the border regions, "some Poles are attracted by German incentives to launch businesses there," he said.

Depopulation is a persistent problem in eastern Germany. Data show 136,000 people from the east moved to western German states in 2006, with only 82,000 Germans going the opposite way.

Officials say the population of western Germany is expected to shrink by 14 percent from 2006 to 2050, while the shrinkage is expected to be 31 percent in the east.

Baryliszyn's company, Fleischmannschaft, which makes seasoning for meat and fish, employs about 130 people at Polish sites. In a few weeks, it will start producing in a new factory in Löcknitz and employ four Polish and two German workers.

Although wages were still higher than in Poland, lower property prices and an expected marketing advantage would make the investment of €1 million, or $1.57 million, worthwhile, said Baryliszyn, who manages the German site.

"The label 'Made in Germany' is very important to clients, both in Eastern Europe and the West," he said, sitting in a sparsely furnished new office smelling of fresh paint.

Baryliszyn said he was still commuting to Szczecin until production at the German factory started, when he would think about moving to Löcknitz, where gray communist-era high-rise apartments mix with bright homes decked with solar panels.

A Polish insurance broker, Mariusz Kimla, said the short distance to his Szczecin office had persuaded him to build a two-story home in the German town.

"I wouldn't get much for my money in Poland," Kimla said.

Poland, the biggest ex-communist economy in the European Union, has enjoyed a four-year housing boom, during which many Poles bought their first homes and took out their first mortgages, thanks to less-costly credit. House prices jumped by 50 percent in 2006.

The Polish economy grew 6.5 percent last year, compared with growth of 2.5 percent in Germany, Europe's largest economy. Poland's 8 percent jobless rate compares with 7.4 percent in Germany, although the rate is much higher in eastern Germany.

"I advise other Poles to do the same," Kimla, 30, said of his decision to buy a house in Löcknitz, which is about 130 kilometers, or 80 miles, northeast of Berlin and is surrounded by forests, lakes and wind turbines. "We can contribute to making this place more lively."

But both Poles and Germans say Poles have not always received the warmest of welcomes.

A few weeks ago, the car windows of several Polish people in Löcknitz were smashed, and some NPD supporters parade around town in T-shirts with the slogan "Löcknitz must remain German" or distributing flyers reading "Close the border."

"Many people say the Poles are now getting all benefits and subsidies without having paid into the system," said Jens Fiedler, 41, who like many in the region is unemployed in winter and does farming jobs in the summer. "I would be very happy to work for a Pole. Unemployment is a huge problem here."

Meistring, the mayor, says a handful of "problem citizens" was damaging the reputation of the majority in Löcknitz who welcomed their Polish neighbors.

Polish investors received the same help or subsidies as did German businesses, he said, adding even the most critical far-right supporters were benefiting from the Polish newcomers.

"One of the leading NPD officials, a tiler, is renovating a house owned by a Pole at the moment. How ironic is that?"

But Meistring acknowledged that the boost from Polish investors had limits for a region where gross domestic product per capita is only half the level of that in some western German states.

"Szczecin isn't capable of saving the entire east German border area," he said. "The entire region is too weak."

"But what we are seeing is a straw to hang on to," he said. "We must be patient."


http://www.iht.com/articles/2008/04/07/business/polecon.php?page=2

Re: Eastern German town benefits from boom in nearby Poland

Wasn't this article posted by Hans several months ago?

Re: Eastern German town benefits from boom in nearby Poland

I think it was a bit different. Same theme. IHT must be short of news to print.