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EU: Germany Favors EU Expansion

Munich, 20 March 1998 (RFE/RL) -- The imminent start of the European Unions process of expansion to the East has prompted a dramatic reassessment of Germany's interests, according to government and business leaders.

Chancellor Helmut Kohl frequently emphasizes expansion as an important factor in creating a stable, secure Europe which should be able to avoid many of the crises of the past 100 years. Last week, Kohl said: "For the first time in its history, Germany has friendly relations with all its immediate neighbors. Bringing Central and East European nations into Europe will expand and consolidate this process."

Businessmen view EU enlargement as an opening to a new market where lower wages and less-complicated structures make it considerably easier to operate than in Germany.

In fact, there is no real debate in Germany today about the expansion of the EU into Central Europe. The Government's positive approach has been endorsed by the opposition Social Democrats and is generally supported by the Greens, the junior opposition party.

Germans who are neither politicians nor businessmen appear to be overwhelmingly positive towards the Union's first opening to the East -- due to include the Czech Republic, Estonia, Hungary, Poland and Slovenia. Recent opinion polls show that more than 70 percent of Germans agree with the inclusion of the current candidates into the EU. But the polls do show reservations about including some other candidates in Eastern Europe.

This positive approach contrasts with the widespread doubt about the introduction of the new EU single currency, the euro. Polls show that somewhere between 60-70 percent of Germans oppose having to surrender their Deutsch Mark, the emblem of postwar prosperity, stability and economic power, for a currency which is prey to the vagaries of other economies.

It appears that 11 countries will join the Euro when it is launched at the start of next year, some of them with currencies much less robust than the DM. Germans fear the new currency will not be as strong as their mark.

Probably it will be easier for the new Eastern members to surrender their own currencies when the moment comes, but that is still some time away. Membership in the euro monetary group does not come automatically with EU membership. Applicant countries have to fulfill certain criteria, which even Germany -- the economic powerhouse of Europe -- has found difficulty in meeting.

There are many reasons for the widespread German support for this first round of EU expansion. Norbert Walker, the chief economist for the Deutsche Bank, was quoted recently as saying: "Germans have a natural affinity for the East. Many have their ancestral roots there, and with the rise of free market democracies, it is now seen as the key to our nation's economic and political destiny."

The strongest German advocates of expanding the EU are businessmen. Many are already heavily engaged in business in Central Europe, where wages are often as little as one-tenth the level in Germany for the same work, and they believe that expansion will provide more opportunities. The companies going East include some of the biggest names in German industry -- Siemens, Volkswagen, Mannesman and the Hoechst chemical concern among them.

A report issued by the country's central bank last year says that Germany alone now accounts for one-third of Central and Eastern Europe's trade with the West. Germany has become by far the largest trade and investment partner for the Czech Republic, Poland and Hungary.

A recent survey showed that 28 percent of Germany's 6,000 leading companies plan to move production abroad in the next few years. The Industry and Trade federation has estimated that German industry will create at least 300,000 jobs abroad in the those years, most of them in Eastern Europe.

This eastward expansion has had repercussions in Germany. It has contributed to the current unemployment rate of almost five million, the highest figure since the Depression years in the 1930s. But the number of jobs being created in Central Europe is such a small percentage of the overall unemployment figure that it has triggered little resentment in Germany. The main causes of unemployment are to be found at home, not in expansion abroad.

Entry into the European Union will certainly bring problems for the new members as they struggle to adjust their economies to its hundreds of regulations. But it should also lead to more jobs and a boost to the economy as German and other European firms open businesses and industrial plants.