Clay Risen continues his series of reports from Germany (which appear in different outlets) with this guardedly optimistic take on East Germany's economy:
The east isn’t lagging so much as diversifying, with some areas nearly even with the west and others dropping far behind. Like the American Midwest, rural regions are hurting, but urban centers are bustling. In eastern Germany’s southern and western states, economic output is nearly at parity with parts of the west, thanks to massive federal spending in the 1990s and a wave of private investment, mainly in high-tech sectors, over the last decade. “You have extreme contrasts,” says Michael Burda, an American-born economist at Berlin’s Humboldt University. “Eastern Germany is in a medium-term position to overtake the West in some sectors”—including solar- and wind-power technology, health care, and nanotechnology.
According to Burda, instead of an east-west divide, Germany is reverting to its centuries-old norm: A north-south split, in which rural Baltic states like Schleswig-Holstein in the west and Mecklenburg-Vorpommern in the east lag behind southern economic powerhouses like Bayern and Sachsen. “It was easier for states like Sachsen and Thüringen to redevelop because they were traditionally industrial areas,” says Thomas Fabian, an economist with Germany Trade and Invest, a Berlin-based trade group. “Now we have well-developed places in the east and places in the west with problems.” In other words, the fears that eastern Germany would turn into a Teutonic version of Italy’s Mezzogiorno, condemned to weak growth and high unemployment, have been greatly exaggerated. Reunified Germany, long feared to be the “sick man of Europe” and a possible breeding ground for economic and social instability, is actually pretty normal.
[E]astern Germany’s skeptics and boosters alike see a similar future, one in which a few metropolitan areas—Berlin, Dresden, Frankfurt (Oder), Leipzig-Halle—reach parity with the West, while vast rural stretches continue to depopulate. That’s not the ideal envisioned by Chancellor Helmut Kohl and the Bonn government in the early 1990s, but maybe that’s not such a problem. “If people wish to move to West Germany, let them,” says Uhlig. “East Germany may become a nature paradise with a few vibrant cities, and I do not see why that would be a bad outcome.”
As these excerpts show, buried in Risen's piece about East Germany's economy is a piece about shifting settlement and population patterns in the East. The young and talented are leaving, but they're generally leaving the drab, one-purpose manufacturing settlements or the smaller towns. The big cities aren't doing all that badly. You get a sense something's brewing there, and property values have started to rise.
The other places are, of course, shrinking. This leads to the question: how do you actually manage a shrinking city? Some East German towns are trying innovative new approaches (g), such as clearing away former housing and declaring it a nature preserve, or re-tooling the city to one particular kind of tourism. One of the pretty remarkable things about Western Germany is its unusually dispersed population: the density of settlement around the entire country is remarkably consistent, and there are no 'mega-cities' in the international sense. This is not necessarily the case in other European countries. The former East Germany may just be transforming into something that looks like those other places. Given that there doesn't seem to be much a way of stopping the process, it seems like the best thing to do is manage it well.