Polish investors revive east German town

By Kerstin Gehmlich

LOECKNITZ, Germany (Reuters) - For years, Germans from the town of Loecknitz drove across the Polish border to buy cheap cigarettes and alcohol. Today, Poles like Marcin Baryliszyn go the opposite way to set up firms and build homes.

Baryliszyn is one of several dozen Polish entrepreneurs who have set up in Loecknitz, providing a boost to the 3,000-strong town near the border in one of Germany's poorest regions.

"It's quite astonishing. A few years ago, people said once Poland joined the European Union, Germans would rush to Poland to buy everything up. But it turned out quite differently," Baryliszyn said. "Cheap property is a key factor."

At first glance, Loecknitz looks like many other East German towns: almost one in four people is unemployed, discount shops line its streets and the far-right National Democratic Party (NPD) scored 18 percent in a recent election.

But unlike many bleak towns in the former communist East, where birth rates have slumped and apartments stand empty because jobless workers have moved to wealthier western states, dozens of brightly painted family homes have mushroomed in Loecknitz and it now needs a bigger kindergarten.

Like Baryliszyn, many investors and Polish buyers come from the booming port city of Szczecin, Poland's seventh largest city, which is less than a 30-minute drive away from Loecknitz.

Since May 2004, when Poland became the biggest ex-communist European Union member, the jobless rate in Szczecin has dropped from above 16 percent to 6.6 percent in January 2008 -- less than a third of the current rate in Loecknitz.

"Szczecin is our trump card," said Lothar Meistring, the mayor of Loecknitz, where estate agents say property prices are up to 20 percent cheaper than in the Polish city.

"(To many Poles), Loecknitz is the gateway to the western world," Meistring said, sitting in his office next to a Polish hairdresser and close to a real estate agency, which has offers advertised in both Polish and German.

Some 200 Poles have moved to Loecknitz over the past few years, and 40 firms have been set up, the mayor said.

Although most of the newly created firms were one-man businesses and only a handful of direct jobs had been created, Meistring said each Pole who built a factory or home helped boost local firms, shops and schools.

"Our population is growing ... We have to build a new kindergarten. Not just because of Polish children, but partially due to them. We have had record births recently," he said.

"MADE IN GERMANY"

Szczecin Mayor Piotr Krzystek said it was a trend among young people to try their luck in Germany.

"Those (regions close to the border) have recently been deserted (by many Germans), so some Poles are attracted by German incentives to launch businesses there," he said.