The Berlin Update: 4th March 2013

by Ares Kalandides

My weekly pick of news with information on and from Germany. Today with the following:

1. The automobile industry in central and eastern Europe

2. Strong rise in shift and night work

3. Poverty report of the German government “corrected” by Minister of Economics Rösler

4. Raging real estate wars in Berlin as a remaining piece of the Wall is torn down to make place for luxury housing

5. Who’s afraid of Bulgarians and Romanians?

________

1. The automobile industry in central and eastern Europe, Gegenblende, 7th February 2013

auto

The car industry that had moved a large part of its production to central and eastern Europe is in the middle of a crisis. Fiat in the south Polish Tychy announced at the beginning of the year that it would fire one third of its 1450 workers by March. The local Union has calculated that this may entail another 600 redundancies in supplier firms. With an unemployment rate of 13,3 % in Poland it will be extremely difficult for these workers to find a job again. Fiat’s sales in Europe fell by 16%.  In Slowakia, which has become one of the most important car clusters in Europe (Kia Motors, Volkswagen and PSA Peugeot Citroën), there is a similar decrease. About 1/4 of the country’s exports, 1/3 of its industrial production and 1/4 of its GDP are due to the automobile industry. Yet, both Kia and PSA are reducing drastically their production which may hit the Slowak economy severely.  97% of the Slovak production is exported. With monthly wages of 750 Euros, Slovak workers are hardly potential custumers for their own car industry. From 16 million cars sold all over Europe in  2007 the sales fell to 12.8 millions by 2012. The German car industry belongs to the winners of the past year: Volkswagen reached an increase of 22% in sales in the USA last October, its best result in 40 years. Altogether the German car industry could rise its sales in the USA in the first 10 months of 2012 by 20% – faster than the whole market which expanded by 17%.

http://www.gegenblende.de/19-2013/++co++d1ac06fe-7140-11e2-9711-52540066f352

_________

2. Strong rise in shift and night work, Die Zeit, 18th February 2013

Nurse at the Mitte hospital in Bremen

Nurse at the Mitte hospital in Bremen

More and more people work in the weekend or at night according to a report of the German government. Approximately 1/4 of the 8,9 million labour force work in the weekend – occasionally or reguarly. The number of shift workers rose from 4.8 million in 2001 to 6 million in 2011.

http://www.zeit.de/karriere/2013-02/arbeitszeiten-ueberstunden-nachtarbeit-bundesregierung

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3. Poverty report of the German government “corrected” by Minister of Economics Rösler, ARD, 21st February 2013

Poverty risk in German states

Poverty risk in German states

The German Federal Minister for Economics and Technology, Philipp Rösler is reported to have changed the wording of the poverty report presented by his colleague, the Minister of Labour, Ursula von den Leyen. The original report saw the rise of income disparities as “injuring people’s feeling of justice” and thus “a risk for social cohesion”. In the new corrected version by Rösler’s ministry the sinking real wages are “the expression of structural adjustments” in the labour market, since between 2007 and 2011 a lot of new jobs were created in the lower wage segment and have absorbed the formerly unemployed.

http://www.tagesschau.de/inland/armutsbericht122.html

http://www.tagesschau.de/inland/armutsbericht108.html

____________

4. Raging real estate wars in Berlin as a remaining piece of the Wall is torn down to make place for luxury housing

Demonstration at the Berlin Wall

Demonstration at the Berlin Wall

Hundreds of Berliners gathered at the “East Side Gallery”, the longest remaining piece of the Berlin Wall, to protest against its partial demolition for the new construction of a luxury block of flats.  About 1.5 metres of the East Side Gallery were taken down before protests brought an end to the work as police determined it was unsafe to continue. Further 18.5 metres need to be dismantled to allow access between the 36-flat complex and the banks of the river Spree.

The trend towards luxury flats is not just a Berlin one. The “Deutscher Mieterbund” (German tenant association) has estimated that approximately 250,000 rental flats are missing in large cities, metropolitan areas and university cities. Nonetheless  137,000 flats were built in 2009 and 185,000 in 2012 – especially because many foreign investors have chosen to invest in real estate because of the crisis. Yet, these new flats are mostly in the upper price segment, while more and more affordable flats are missing. The number of social flats in the past 20 years has gone from approximately 4 million to less than 1.6 million, though the need is growing. The number of households grew from 38.5 million to 40.3 million between 2002 and 2010.

http://www.guardian.co.uk/world/2013/mar/01/berlin-wall-protests

http://www.sueddeutsche.de/wirtschaft/angespannter-wohnungsmarkt-deutschlands-luxus-problem-1.1612885

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5. Who’s afraid of Bulgarians and Romanians? Süddeutsche Zeitung, 28th February 2013

People at risk of poverty and social exclusion. Source: Economist Intelligence Unit. http://viewswire.eiu.com/asset_images/819853466.gif

People at risk of poverty and social exclusion. Bulgaria and Romania in first two positions. Source: Economist Intelligence Unit. http://viewswire.eiu.com/asset_images/819853466.gif

As of 2014 Bulgarians and Romanians will be free to immigrate to the rest of Europe as last bans are lifted. Peter Friedrich, the conservative Federal Minister of the Interior, warns the country against a flooding by poor immigrants. “We need to look at local conditions and have the courage to send back EU citizens who abuse of the right to free movement”.

http://www.sueddeutsche.de/wirtschaft/bulgaren-und-rumaenen-in-deutschland-angst-und-arbeit-1.1608908

About Ares

Ares Kalandides holds a PhD in Urban and Regional Studies from the National Technical University of Athens. He is the founder and CEO of Inpolis, an international consultancy based in Berlin, Germany and has implement several projects around the world. Ares teaches Urban Economics at the Technical University in Berlin and Metropolitan Studies at NYU Berlin.
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