Lagging economy in Germany's former east risks stoking radicalism

Slideshow ( 2 images )

BERLIN (Reuters) - Almost 27 years since reunification, the economy in the ex-Communist east still lags behind that of west German states, the government said on Wednesday, warning of social divisions and the risk of those who feel “left behind” being radicalised.

Record-high employment, increased job security and rising real wages are powering a consumer-led upswing in the German economy which looks set to help Chancellor Angela Merkel win a fourth term in office at the Sept. 24 federal election.

But the government’s annual report on the state of German unity found that although life-satisfaction levels had risen significantly in the east over the past 10 years, the gap in economic strength between the east and west is narrowing at a slower pace.

Gross domestic product per head in east German states still lags that of the west by 27 percent, the unemployment rate at 8.5 percent last year is above the national average of 5.7 percent, and people take home lower wages.

“We can’t allow whole regions to be left behind in the long run,” said Iris Gleicke, the federal government’s commissioner for eastern German affairs.

Population decline and a lack of major employers have hampered economic prospects and in some areas of east Germany many essential services are at risk, the report said.

“Particularly in the weakest regions where many people may feel ‘left-behind’, social divisions can lead to radical attitudes,” the report said.

Support for the anti-immigrant Alternative for Germany (AfD) party is particularly strong in the east where it has played on public angst that refugees are overrunning the country and siphoning away resources and jobs from Germans.

Globalization and demographic change could exacerbate the divide between prosperous and poor regions, the government warned, noting that regional differences between booming and impoverished areas are greater than in Britain and France.

Reporting by Caroline Copley; Editing by Alison Williams