Miracle fails for deprived Ossies

Schwerin - The freshly gilded turrets of the enchanted castle that is home to the legislature of Germany's most sparsely populated region are a dazzling display of affluence. Yuppified Ossies (those from the former East Germany) race along the cobbled streets of the capital in BMWs, jewellery stores tempt consumers with a selection that would be the envy of Bond Street. The billions flowing into this part of the East have evidently been well spent.

The place is flush with money, yet the locals are whingeing. This may have something to do with the fact that unemployment in the surrounding region of Mecklenburg-Western Pom- erania is 40 per cent; that the crime rate and alcoholism are among the highest in the EU; and some people feel they have become second-class citizens in their own country. They have seen one wall tumble, six years ago, but now they are trap-ped behind a new barrier.

There is, in the view of those who have prospered in the ruins of Communism, a Darwinian inevitability about failure, one that can be enumerated. "About 70 per cent of people have been able to make themselves fit for the market economy," says Bernd Seite, the Land's Prime Minister, who used to be a vet in the old East Germany (GDR). "But 20-25 per cent have not succeeded."

Their flaws are allegedly inherent in their make-up, which can only be erased by time. "It will take at least a generation to change the mental outlook of the people," Mr Seite predicts.

It is a long convalescence and a high ratio of wastage, which still does not explain the Ossies' remarkable under-performance in the job market. In Mr Seite's regional administration, perhaps the only employer that can offer job security, two-thirds of staff are recent immigrants from former West Germany. The rest of the public sector is bleeding from a thousand cuts, with teachers next in line for the chop because of the falling number of pupils. Ten per cent of the population have emigrated in the past six years, and the birth rate among the remainder is down by a third.

The losers demonstrate their displeasure by voting for the ex-Communist Party of Democratic Socialism, by hitting the bottle and taking the winners' BMWs for a joy-ride, or by beating up foreigners. Mecklenburg's fascist thugs have the fiercest reputation in Germany, but lately they have been venting their anger not at Turks or Poles, but at Wessi (former West German) tourists. The new battleground is the camp-sites along the Baltic coast, where local lads have been attacking rich "foreigners" from as far away as Munich or Berlin with baseball bats. Class war has arrived, and there seems no shortage of youths willing to fight on the beaches.

Opportunities for more meaningful leisure are scarce, and employment prospects for a school-leaver practically nil. The region has been in economic decline for centuries, and the few factories that sprang up along the coast during the Third Reich and the Communist era lie idle.

There is nothing unusual in that, except that here the ravages of capitalism were inflicted not by blind market forces, but by wanton West Germans. At the People's Shipyard in Stralsund, the curses of the lucky few who still have jobs are daubed in huge letters on a three-storey steel structure once destined to be the hull of a new vessel. "We want our millions back," they proclaim, in a gesture as futile as it is bitter.

The millions in question - DM850m (pounds 340m) to be precise - were literally stolen from the region's shipyards by the WestGerman company, Bremer Vulkan. They were government subsidies earmarked for the east and siphoned off by crooked managers in Bremen to keep Western workers in jobs. The scam was only detected this year when the EU started asking questions about the investment it had approved. The local management - consisting of Wessies - never complained.

The legacy of the Bremer Vulkan era is an unfinished hangar next to the halls where a few hundred workers weld bits of metal delivered on wooden carts. The shipyard is kept afloat by the local government, its workforce of 8,500 before unification eroded to 2,000 today. Half of them will be out of work by the end of next year.

It is not just the relatively uneducated who are condemned to a life of indolence. In the pretty Hanseatic town of Greifswald, a plaque at the 500-year old university commemorates students who in 1870 gave their lives in France for the Prussian Fatherland. There are few signs of recent skirmishes, other than the metaphorical blood on the carpet and a decimated staff list. Over the past six years, senior academics have been culled in a process described by the rector as "renewal", and replaced invariably by Wessies fleeing from lack of tenure at home.

But some rays of hope are penetrating this gloom. Cut off from the rest of Germany by a lack of roads and fast rail links, the remnants of the Hanseatic world have been thrust back into the sea. The ships are sailing again to Sweden, Denmark, Finland and the cities of Tallinn and Riga, and trade is resuming with Pomerania across the Polish border. The eastern Baltic is forecast to become the fastest-growing region in Europe, its cities serving as magnets to tourists and industry. A golden future lies ahead, though how Schwerin and its hinterland will survive without a social explosion is hard to see.