Germany: the hidden divide in Europe’s richest country


Stefan Wagstyl in the FT:

Gelsenkirchen stands at one extreme of the German economic scale, far removed from the rich metropolises of Hamburg, Frankfurt and Munich, and the hundreds of successful small industrial towns that form the country’s economic backbone.

As in many other poorer towns, the problems are not immediately obvious: with the help of central government funds, Gelsenkirchen has developed a modern pedestrianised shopping centre, a renowned concert hall and a world-class football stadium for Schalke 04, a leading Bundesliga side.

The residents walking about on a recent sunny day would not have looked out of place in a smart resort, in their designer T-shirts, jeans and trainers. As Annette Berg, the head of social services in the city, says: “Can you see poverty in Gelsenkirchen? No. Because [social security in Germany] isn’t so low that people look poor on the streets. They make sure their children dress well. But, without jobs, they cannot afford to do anything nice.”

Plenty of Doris’ neighbours in Gelsenkirchen are in the same rickety boat. Ravaged by the decline of coal, which once made it rich, the town ranks among Germany’s poorest. The unemployment rate last year was 14.7 per cent, the highest for any large town or city, and far above the 5.5 per cent national average. Household incomes are among the lowest, as are health standards, even among young children.

Such sentiments are now starting to drive political debate in Germany. Marcel Fratzscher, head of the DIW economic think-tank who has advised the SPD, says: “The economy is doing well. The big concern is about people who are being left behind.”

Ms Merkel’s conservative supporters have long disagreed: they have seen a need to assist particular disadvantaged groups, such as impoverished pensioners or the long-term unemployed, but no overall inequality problem.

More here.