Last Sunday, the results of the elections in the two states of the former East Germany, Brandenburg and Saxony made interesting and alarming results, respectively. The two major parties of the Federal Government Coalition, namely the Christian Democrats (CDU) and the Social Democrats (SPD) first emerged in Saxony and Brandenburg respectively but with shrinking percentages.
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At the same time, a drop in left-wing rates occurred while the results of the elections highlighted the presence of the Greens in East Germany. The election results showed that 1 in 3 voters chose either the “Alternative fur Deutschland” (AfD) or left party. The percentages of the extreme right (AfD) increased mainly in youth.
Source: Daniel749, Photo by Author: Unknown/Alternative fur Deutschland licensed Public Domain, https://en.wikipedia.org/wiki/Public_domain
The reasons for increasing the electoral rates of the AFD
However, the formation of the local government in both states will be a particularly difficult puzzle, as three-party coalitions will be needed to prevent the AFD from participating in these governments.
The fact that the AfD rates increased is a warning to the decision-makers that they should look in detail at the problems of people in these areas and in general in Eastern Germany.
The convergence of wages and living standards between West and East Germany has been achieved to a large extent, despite the difference between them and since wages in East Germany are lower by 20% than their respective wages in West Germany. Unemployment in East Germany is also low (6%) but higher than the annual unemployment rates at national level (3,7% 2018, Source: Eurostat).
It should be pointed out that the lack of large enterprises and the non-modernization of infrastructure in East Germany that will act as a magnet for new and existing businesses to relocate their headquarters there, is a crucial element for the rise of AfD, particularly in the ranks of youth in East Germany.
Policies to address the election rise of AFD in East Germany
The implementing policies to address the electoral rise of the AfD are in domestic investment. In particular, the federal government of Germany should:
1. To create thematic and technological parks in all the Länder of East Germany to attract start-ups to innovative technologies.
One way of attracting them will be to legislate that any start-ups companies and others also if they choose to place their headquarters in the specific technology parks, for seven consecutive years will not pay a corporate tax if all of their profits, for the same amount of time, invest them each year in their company.
This will result in the gradual development of these companies that will continually seek new skilled workforce.
2. These companies should establish relations with the local universities of East Germany in order to further develop the R&D sections of these universities to produce specialised technological graduates who will find work in these technological innovation companies.
The drastic attraction of students from all over Germany and not only, to these universities in East Germany will create a gradual increase in real estate sector in these areas by increasing the corresponding demand for services with simultaneous increase in the incomes of local populations.
3. Local governments in the states of East Germany should devise and implement plans to modernize existing road infrastructure with the low environmental footprint being characteristic of these projects.
4. Modernization of the telecommunications network (e.g. upgrading to 5G) should be launched by pilot programs from East Germany. This policy will greatly help innovative technology companies who will choose to place their headquarters in these states.
5. A corresponding reduction in corporate tax for large enterprises and when they decide to transfer part of their huge production, creating factories, in the states of East Germany.
6. In addition, in the whole of Germany, and particularly in East Germany, should be legislated a reduction in the rate of tax charged to salary employment in order to increase the rate of salaried work and new recruitments.
7. Strengthening social infrastructure for single-parent families and not only, by local governments.
According to the implementation of these policies will increase the percentage of new companies that will choose to operate from the states of East Germany which then companies will require an ever-greater upgrade of local Infrastructure for the continuous attraction of high-educated employees.
On the other hand, transferring part of the production-factories of large enterprises to East Germany will absorb more and more young workers who will have the least educational skills, in order to reduce unemployment in these categories of young people.
The convergence of living standards between West and East Germany will not create a fertile ground for the political arguments of the AfD in the ranks of German youth.
