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Flood Money to Help E. Germany

September 8, 2002

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DRESDEN, Germany (AP) _ With thousands of basements and floors needing repair after eastern Germany’s disastrous floods, home builder Andreas Geissler is thinking about doing something he hasn’t done in years.

``If I get a few more orders, I can think about hiring some more people,″ said Geissler, who let seven of 15 employees go in a construction slump that began in the late 1990s.

The flooding did billions of dollars in damage to the formerly communist-ruled east, still trying to catch up with the richer west 12 years after Germany’s 1990 reunification. Some easterners, like builder Geissler, 47, hope the reconstruction effort will give the region a boost that will offset the wreckage _ at least in part.

A flood repair job can run from about $30,000 for a small house to $296,000 for a big building, says Geissler. ``Good work costs money,″ he said.

Not everyone expects a payday, however. An expected small boost in the eastern economy is little consolation for thousands of small business owners who formed the first post-communist wave of entrepreneurs. Many were uninsured and already in debt, and it’s not clear yet who will be eligible for how much aid.

Gerti Oczadly, who runs a downtown Dresden travel agency, has lost over $296,000 in revenue. Her first-floor office was undamaged, but basement flooding ruined communications equipment and cables; she was turned down for a $14,700 emergency grant because the loss was deemed indirect.

``I can’t get more loans,″ she said. ``I’m 61 and looking at nothing _ if I were 51, or 41, it would be different.″

She went into business for herself in 1990 after heading the communist-era government travel agency in Dresden; her husband and son also work at the agency. ``It’s a question of existence for us,″ she said, blinking away tears.

In Saxony alone, where most of the flooding occurred, 30,000 houses were damaged, about 460 miles of road washed out; 180 bridges destroyed; and 11,000 businesses with 100,000 workers threatened with bankruptcy.

While repairs will take months, the flood didn’t wash away key improvements to the crumbling communist-built phone and road network during the 1990s. Deutsche Telekom says its network is basically intact _ despite 60,000 people without service due to damage at the end connections and 165 switching stations.

With the German government and the European Union planning to throw about $9.8 billion in reconstruction aid at the flooded region, economists expect a noticeable if temporary uptick.

Economist Udo Ludwig of the Institute for Economic Research in Halle said the bounce could mean as much as 0.5 percent points in additional growth next year in the east, to around 2.5 percent _ although that won’t significantly dent the east’s unemployment rate, now 17.7 percent compared to 7.8 percent in the west..

Out in the rust belt town of Bitterfeld, population 17,000, few expect the bounce to reach their town, dotted with dead smokestacks and abandoned buildings. Bitterfeld depended on the giant communist-era chemical works, which employed 30,000 people before 1990 _ most of whom lost their jobs. Unemployment in the town is 22 percent.

Local builder Reinhard Fuchs is working 16-hour days, juggling 25 estimate requests and seven work orders with fixing over $98,000 of damage to his own property.

He fears bigger competitors from the west will skim the cream. ``From big projects, we won’t get anything. We don’t have the scale, the machines, the equipment,″ said Fuchs, who has 20 employees.

Flood aid is ``a droplet on a hot stone, it will evaporate right away,″ said Joachim Poetzschmann, head of the town’s skilled-trades guild. ``We need new businesses to locate here.″

Sisters Maria Lauerwald, 46, and Monika Geyer, 44, showed up at the unemployment office _ the biggest, shiniest building on Bitterfeld’s main street _ in hopes of government-subsidized work cleaning up flood damage. Both have been out of work since reunification.

``There won’t be any big recovery,″ said Monika. ``It will take years even to put things back the way they were before.″

A few minutes later, they came out.

``No luck,″ said Monika.

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