Bremen’s ‘Restructuring’

Bremen’s port has traditionally dominated the state’s industry and plays a vital role in the Germany’s export-orientated economy (Plöger, 2008, p.1). However, from the mid 1970s, shipbuilding in general experienced a decline that would eventually result in the loss of two major shipbuilding companies in Bremen (AG Weser in 1984 and later Bremer Vulkan AG). As a result, Bremen became one of the regions with the highest levels of unemployment in western Germany (Probst, 2007, p.22).

As a consequence, Bremen’s harbour industry underwent significant structural change.

The orientation shifted to modern logistics and transport, which were more attractive in terms of added value than the old labour-intensive shipbuilding industry. Yet the outcome of this shift was an increase in unemployment and impoverishment, as well as a resulting shortfall in income: ‘This successful economic function has not been reflected locally, either in terms of increased tax revenue or in more jobs (…); it is a case of “jobless growth”’ (Spehr, 2007, p.132). As jobs in Bremen's traditional economy vanished forever, a large number of low-skilled workers, many of them with a migrant background, found themselves ‘being threatened with permanent exclusion from the formal labour market’ (Plöger, 2008, p.11).

By the late 1980s, Bremen was suffering a growing budget crisis, prompting the SPD-led government to make a claim at the Constitutional Court for compensation to take into account the city-state's fulfilment of the higher (in other words federal state) functions outlined above (ibid., p.5). In 1991, the state won compensation of €8.5 billion, which included financial assistance from other states, spread across two five-year periods, in instalments of between €500 and €900 million (Spehr, 2007, p.129).

However, the federal government linked financial assistance to stringent budgetary measures. The primary objective of the package was debt reduction, although it was agreed that savings on servicing debt could be used for investment (Plöger, 2008, p.5).

Bremen’s President Henning Scherf (SPD) accepted the terms and described the SPD-CDU government as ‘the restructuring coalition' (Thomsen, 1999). However, the reverse side of the coin was that Bremen's per capita debt soared, becoming the highest in any of Germany's states (ibid.). The coalition used the funds for ongoing expenditure commitments and interest payments, but part of the agreement was to freeze public spending in areas such as social services, jobs and education; by 2004, the level of public expenditure was nominally comparable to that of the previous decade. Not only did this amount to a significant reduction in public spending, it also resulted in a cut in the number of public sector employees (ibid.).

Following on from earlier measures introduced in the late 1980s to enhance the city's status as a centre for science and technology, Bremen's government embarked on a series of projects (Plöger, 2008, p.3). These were designed to develop new industry and business parks, to improve transport to the harbour and airport, to promote tourism both in the city centre and with the constriction of new projects, as well as to prioritise research and development, focusing on existing industries and new research institutes (ibid., p.5). Even Bremen University's academic focus was restructured, moving away from the social sciences and towards technology and the natural sciences (ibid., p.4).

While public spending froze, expenditure for ‘restructuring investments’ doubled (Spehr, 2007, p.129). However, the results were mixed, and some of the high-profile investments turned out to be financial flops, such as the Space Park, the Musical Theatre and the private International University (ibid.). Although the restructuring programme prioritised growth in the high-tech, high-skill sectors, it also envisaged job creation in the low-pay sector, for example retail and catering jobs at the Space Park, an ultimately ruinous venture that was supposed to rejuvenate the socially deprived neighbourhood of Gröpelingen (Plöger, 2008, p.9).

The government promised that the finance package would stimulate job creation and, very importantly, jobs paying enough to become liable for social security contributions.

But by the 1999 state election, the number of jobs qualifying for social security contributions had actually fallen by approximately 8,000 (Thomsen 1999). In the meantime, unemployment stood at 15.6%, a rate comparable with that in some eastern states (Probst, 1999, p.2). As a consequence, the proportion of Bremen's residents receiving social welfare payments also increased and was among the highest nationally in relation to the population. A further knock-on effect was that as unemployment rose, so did the problem of people chasing jobs for which they were over-qualified, thus creating even greater barriers to employment for those with few or no qualifications or skills (Plöger, 2008, p.9). Debt and a shortfall in income went hand in hand with a series of privatisation measures. Substantial sections of Bremen’s housing and infrastructure, including the Stadtwerke public utilities company, waste disposal and water, had been sold off, often at bargain prices (Thomsen 1999). All in all, the coalition ‘practised redistribution from bottom to top in enormous proportions’ (Spehr, 2007, p.129).

Even more ambitious measures were proposed under the SPD. One such concept was a reform of ‘task fulfilment’. The plans were submitted on behalf of a state steering group and envisaged the functions of the state being reduced to the very barest legal minimum, namely law enforcement, justice and financial administration (Eisermann and Spehr, 2007). This so-called ‘night watchman’ state would act as a manager/

coordinator of the public services ‘market’ and contract out all other services to private enterprises or to the non-profit sector (Disput, 2003) . A further proposal envisaged the ⁶⁹ creation of a special economic zone (Eisermann and Spehr, 2007). Under this scheme, Bremen would have once again become a ‘test laboratory’ (Rupp, 2003); this time for a programme of deregulation and tax incentives designed to attract businesses with low costs and to stimulate the creation of (cheap) jobs. Had it been approved, the plan would have swept aside employment rights and the nationally established Tarifautonomie (collective bargaining) in a bid to dismantle legal protection, which was now renamed ‘bureaucracy’ (Süddeutsche Zeitung, 2010).

In 2002, the Bremen Chamber of Labour (Arbeitnehmerkammer Bremen - ANK) published its first 'Poverty Report'. The ANK took as its point of reference a report published by the federal government a year earlier, which examined poverty and wealth

This ‘Neuordnung der Aufgabenwahrnehmung’ would be based on a similar model to that of

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the ‘no-frills’ council or so-called ‘Easy Council’.

across the whole of Germany. The ANK was disappointed that Bremen’s government had refused to publish a similar report of its own (Jakubowski and Arbeitnehmerkammer Bremen, 2002, p.9), so in the absence of an official report, the task fell to the ANK. The report identified unemployment as a key cause of poverty. Not only was joblessness stubbornly high, but the number of long-term unemployed was also increasing. What is more, the responsibility for implementing social welfare support (Sozialhilfe), was placing the local municipality mounting financial pressure (ibid., p.16). The report’s key finding was that any realistic chance of solving poverty was its recognition as a social problem within society — not a purely economic one (ibid., p.13). The following year, the ANK published another report, this time with the spotlight on the growing problem of in-work poverty . This time, the report identified a ⁷⁰ growing awareness of poverty in Bremen.

(B)eyond the 'official politics' there is another level of politics that is concerned about and with the poverty situation in our city, and which wants to know more and do more about it (and) to tackle it not just as an individual problem but as a social problem. (Jakubowski and Arbeitnehmerkammer Bremen, 2003, p.7)

In subsequent years leading up to the 2007 election, the ANK’s reports examined (inter alia)

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poverty and health (2004), poverty and education (2005), the working poor (2006) and the social division of the city (2007).