Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, July 22, 1990 TAG: 9007220212
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: CRAIG R. WHITNEY THE NEW YORK TIMES
DATELINE: HALLE, EAST GERMANY LENGTH: Medium
Unemployment, officially unknown a year ago, is now estimated at 220,000, about 2.5 percent of the labor force, and it is rising.
East German officials estimate a third of the country's state-owned enterprises are economically untenable, and that a quarter of a million people too many are employed in agriculture.
Retraining for jobs in service industries and other branches will take time, they say, and unemployment is expected to rise into the millions before the transition to a market economy is complete.
Here in Handel's birthplace, a city on the Saale River about 95 miles southwest of Berlin, 5,579 people were unemployed at the end of last week.
On Friday, the political, business and banking elite of Halle gathered in a downtown hotel to talk about their problems with another famous native son, West German Foreign Minister Hans-Dietrich Genscher.
"After three weeks, the feeling is, `in principle, yes, but,' " said Dr. Peter Renger, a Christian Democrat who is mayor of this battered but bustling city.
He went on, like the dozen or so participants in Genscher's informal open seminar, to list some of the problems that have arisen since East Germany abandoned the Soviet-style centrally planned economic system and adopted the West German mark as its currency on July 1.
"The question of property - who owns the land and the buildings - is becoming a big problem," he said. "Investments and new construction are being held up because of the possibility that somebody from West Germany may have a claim on property that was nationalized by the Communist regime. We have to develop a fair way of dealing with this problem, but fast," he said.
The city needs 30,000 to 40,000 apartments, he continued, but the funds to build new ones have run out, and old properties cannot be renovated until the ownership question is resolved.
And while everybody is afraid of losing jobs, he concluded, the state trusteeship set up to decide which Communist enterprises can be successfully privatized and which should simply go out of business is slow and cumbersome.
One would not know it from looking at the streets of Halle.
All around the Market Square, with its statue of Handel and its streetcars now bearing advertising slogans for West German companies, private enterprise is trying to bloom.
Deutsche Bank, Dresdner Bank and other big West German credit institutions have set up shop in temporary buildings or in former Communist Party offices, with antenna dishes pointed skyward to ensure communication with the home office.
The hopelessness of the antiquated East German telephone system is another complaint often heard.
The Golzau Collective Farm is one of many former state agricultural enterprises struggling to cope with the new market economy, with farmers selling new potatoes - $1.20 for a bag of about six and a half pounds - directly to the public from their green farm trucks.
"We have to," a farmer said. "The state stores won't buy from us."
The HO and Konsum stores, still run like monopolies by the former Communist functionaries who ran them under the old regime, also came in for criticism in Genscher's hearing Friday for the autocratic way in which they set high wholesale prices and then passed them off to resentful consumers, who are too far away from West Germany to seek relief in weekend shopping forays across the border.
Genscher said later he had come "to see where the shoe was pinching." He clearly enjoyed walking down the cobblestone streets, being recognized by a public that seems to regard him as its angel of deliverance from communism. "Who was that?" went the refrain. "Genscher!"
His remedy is to recommend that East Germany join the Federal Republic as soon as possible under Article 23 of its 1949 Basic Law, before the all-German parliamentary elections expected to take place on Dec. 2.
It is a plan that also suits the purposes of his small Free Democratic Party, which is set to absorb its East German counterpart, the Federation of Free Democrats, in August.
Mindful that small parties drawing less than 5 percent of the vote are excluded from Parliament, the Free Democrats have concluded they could win more seats should voting take place in a unified country rather than in two states.
But a measure that his party supported to have East Germany become part of the Federal Republic on Dec. 1, before the vote, failed in the East German Parliament in East Berlin on Friday.
"The problems we see here," he said, "are not caused by the introduction of a free-market system, but by the fact that it was introduced 40 years late."
by CNB