E. Germany Brings Trade Woes to Unity
ROSTOCK, EAST GERMANY — LEANING into a stiff wind, Manfred Gerlach walks the docks of Neptun shipyard here in northern East Germany. Although the rushing Baltic Sea air whips about him, there's no mistaking what he's saying. Yes, productivity at the shipyard lags that in West Germany by 30 to 40 percent. ``Productivity is our worst evil,'' says the Neptun spokesman.
With reunification coming, however, it's now West Germany's problem, too.
The Neptun shipyard exports 80 percent of its ships to the Soviet Union. Its contract doesn't run out until 1993. Mindful of the need for Soviet blessing of reunification, Bonn has promised the Soviets that it won't leave them with unfulfilled trade agreements, such as the Neptun one.
This is no small promise. East Germany and the Soviet Union are each other's most important trading partners. About 400,000 East German workers depend on Soviet trade, says Helmut Giesecke, director of foreign trade for the Association for German Chambers of Commerce in Bonn.
The Soviet Union exports raw materials, oil, gas, and trucks to East Germany. East Germany sends machine tools, chemicals, consumer goods, and pharmaceutical products. Both economies are interdependent in the crucial area of replacement parts. All of this, meanwhile, has been built on a system of inefficient production and artificial prices.
Moscow, however, has said it will phase in hard-currency trade starting in 1991. It just agreed with Hungary to calculate their trade in United States dollars.
The exchange rate issue is sensitive, because of recent revelations that the Soviets are falling behind in hard-currency payments for Western imports and may have to reschedule them.
It could be politically expedient to offer the Soviets a favorable rate, in view of this hardship, but this would mean a greater financial sacrifice for West Germany.
Heinrich Machowski, an economist at the German Institute for Economic Research in West Berlin, says, however, that ``there are political advantages'' for Bonn. By backing the trade agreements, Bonn can reassure the Soviets, who have been stubborn on security issues involving reunification. Also, keeping Soviet-related factories operating would lower the expected unemployment wave here.
How much it will cost West Germany to keep the flow going is difficult to calculate, say economists. The present batch of contracts covers five years. Costs may become clearer after negotiators have agreed on an exchange rate for trade.
The rate will have to be decided by July, when East Germany switches to the West German mark. So far, trade is being calculated in Soviet rubles.
West Germany has more trade with East Europe and the Soviet Union than any other European Community member.
Meanwhile in Rostock, one out of two workers is connected to the maritime industry. Neptun alone employs 6,000 people, according to Gerlach.
Neptun has already decided that its ship repair division will have to be closed due to an inability to compete. And the workers are worried about layoffs.