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Last Updated: Thursday, 14 August, 2003, 12:18 GMT 13:18 UK
Germany's cold economic winds

By Jonathan Charles
BBC Europe correspondent

Frankfurt skyline
Plenty of spare office space
A short walk from my office, in the heart of Frankfurt's business district, brings me face to face with the reality of Germany's recession.

For the second time in two years, the country's economy has slipped into recession and the signs are everywhere.

The West End of Frankfurt is one of the city's best addresses - it used to be impossible to find either office space or housing here.

Demand no longer outstrips supply though and the premium prices charged in 2000 now seem a distant memory and a reminder of more affluent times.

Now, on every street that I walk down there are large billboards advertising empty offices and many doorbells outside swish apartment blocks are blank.

In the tree lined Friedrichstrasse, an office block has just been renovated. The owners were hoping to attract tenants willing to pay 30 euros a square metre for the well-appointed, modernised offices but, now, they've had to drop the price to just 11 euros and they're still struggling to stoke up any interest.


Germans are fed up with the mess that their country's in.

Gerhardt, a friend of mine in his late thirties, is now one of the country's more than four million unemployed.

The firm he was working for has had to let most of its staff go in an effort to cut costs.

We have to change the mentality so that they realise the state can't pay for everything
Peter Bruckmaier, medical centre director
At the moment, Gerhardt has no chance of finding work in Frankfurt. Things are so bad that he's considering emigrating to Britain.

He says that it looks like the promised land compared with Germany.

Somewhat bitterly, he told me `we should have seen the writing on the wall 15 years ago and improved our efficiency but no one here wants to go through the pain of change. We'd rather convince ourselves that we can continue to maintain our high standard of living in a much more competitive global economy. But, it can't go on'.

The German Government is trying to implement change but it's a slow process.

The high social taxes on employers to pay for healthcare are being cut back to encourage companies to take on more staff.

Making patients pay

The change will come at a price though. Patients will have to start paying 10 euros out of their own pockets if they want to see a doctor and 10 euros for each night they stay in hospital.

The director of one medical centre, the Kaiser Wilhelms Bad, told me that the system has to change.

In every crisis, there are always fresh opportunities - a plethora of new low-cost airlines are being launched
Peter Bruckmaier says: "It's impossible. We have 80 million Germans and the cost of providing them all with healthcare is too high.

"We have to change the mentality so that they realise the state can't pay for everything."

A doctor friend of mine disagrees with the idea of making patients pay directly for care, though.

Mike Schuesler says that if you introduce charges, poorer patients will stay away because they can't afford treatment. Mike says: "By the time they come to us, their diseases will be more advanced and more expensive to treat, so we'll save nothing."


The German Government is hoping to save 20bn euros a year from the health bill though. It believes that might eventually allow taxes to come down and give the economy a kick-start.

In every crisis, there are always fresh opportunities though and in Germany's cash-strapped society that's certainly true.

Shops offering goods at low prices are doing well and more PennyMarkts are appearing in every city as shoppers try to reduce their household bills.

There are a plethora of new low-cost airlines being launched. They're inundated with business.

If it costs only 30 euros to buy a cheap air fare, a ticket to flee the recession and the associated depressed atmosphere which has gripped Germans, it's hardly surprising that people are grasping the chance with both hands.

Germany falls into recession
14 Aug 03  |  Business
Can Germany bounce back?
14 Aug 03  |  Business

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