Territorial employment pacts in Germany - the example of Zeitz

According to a recent study by the Institute for Economics and Social Science (WSI), there were nine "territorial employment pacts" in Germany which were officially recognised by the European Commission in 1997. The most prominent of these pacts is probably that at Zeitz, which has Germany's highest regional rate of unemployment.

In a recent study, the Institute for Economics and Social Science (Wirtschafts- und Sozialwissenschaftliches Institut, WSI) has analysed the development of "local and regional employment pacts" in Germany ("Lokale und regionale Beschäftigungspakte in Deutschland", Astrid Ziegler, in WSI-Mitteilungen 9/97). The initiative for these pacts came from the European Commission, whose "territorial employment pacts" initiative aims to stabilise local and regional labour markets in selected European regions by promoting consensus and cooperation between all relevant local actors. In 1997, the Commission approved 89 territorial employment pacts, of which nine were in various regions in Germany. The German pacts are listed in the table below.

Territorial employment pacts in Germany, 1997
Town Region (Land)
Amberg-Sulzbach Bavaria
Berlin Berlin
Bremen Bremen
Hamburg Hamburg
Güstrow Mechlenburg-Vorpommern
Braunschweig-Peine Lower Saxony
Ruhr-Region Northrhine-Westfalia
Chemnitz Saxony
Zeitz Saxony-Anhalt

Source: Ziegler 1997.

The conclusion of the Zeitz employment pact

One of the most prominent examples of a territorial employment pact in Germany is the case of Zeitz, a town located in the southern part of Saxony-Anhalt in east Germany. In the former German Democratic Republic, Zeitz was a core industrial area with more than 22,000 people working in miming, chemicals and heavy industries. After German unification led to an enormous process of de-industrialisation in eastern Germany, the number of employees working in Zeitz's core industrial area was reduced to 2,500. Currently, Zeitz has an unemployment rate of 31.5% - one of the highest rates in Germany. Therefore, the European Commission has given the area of Zeitz the status of an "Objective 1 region", which guarantees the region the highest financial support within the European Structural Funds.

Faced with this great decline in employment, in August 1996 regional companies and employers' associations, trade unions and the municipal administration agreed on the conclusion of a regional "employment pact "(Pakt für Arbeit). Originally, the Zeitz employment pact was founded by 15 different parties:

  • regional administration - the mayor of the city of Zeitz and the district administrator (Landrat) of the Burgenland district (in which Zeitz is situated);
  • trade unions - the leader of the Saxony-Anhalt/South district organisation of the DGB union confederation, and members of the local DGB organisation in Zeitz;
  • employers' and business organisations - representatives of the employers' association of Saxony-Anhalt and the manager of the local economic development agency of Zeitz (Zeitzer Wirtschaftsförderungsgesellschaft GmbH); and
  • companies established in the region - managers from Zeitzer Kinderwagen GmbH, Zeitzer Entsorgungsgesellschaft, Mühlen und Maschinenbau GmbH, Zeitz-Südzucker GmbH, MIBRAG GmbH and Zemag GmbH.

The employment pact involves the town of Zeitz and its neighbouring territories, covering a total of about 85,000 inhabitants. In December 1996, the employment pact was formalised by an "agreement for employment" which was signed by regional employers' associations, trade unions and regional governments in order to create a joint platform for the stimulation of regional economic development and employment.

Based on this agreement, the parties involved set up a joint board which is now functioning as a "contact office" (Kontaktbüro) to coordinate communication on employment-promoting measures with potential partners from outside and within the Zeitz region. In addition, a further advisory board was created which is composed of various social institutions at different levels, ranging from Members of the European Parliament to representatives of churches and welfare organisations.

The aim and operation of the Zeitz pact

The overall aim of the Zeitz employment pact is to halve regional unemployment within five years. Therefore, the pact seeks to bring together all relevant groups and social institutions in the region for mutual cooperation in the fight against unemployment. The pact aims to strengthen the region's own economic resources and to create a better cooperation between all social and economic organisations and the municipal administration. Therefore, the pact creates new opportunities for all groups involved to establish a permanent exchange of information and of proposals for the promotion of employment.

Based on the employment pact, the various parties have worked out a "vision for the future" which analyses the problems of regional unemployment and contains various proposals for employment-promoting measures such as:

  • support for the start-up and establishment of new companies;
  • concrete aid for resident companies, such as help with information, communication and consulting, and with problems regarding the public administration, through the creation of a special "competence centre";
  • improvement of the basic framework of conditions for strengthening the competitiveness of local companies (for example, by improvement of the infrastructure);
  • support for cooperation between companies in the area;
  • development of projects with effects on employment, such as support for marketing innovation or development, or distribution strategies for small and medium-sized companies (SME s);
  • development of projects for the reintegration of disadvantaged people and the integration of young people in the labour market;
  • changing the basic framework of regional conditions, such as "debureaucratising" administrative procedures for investors locating in the area;
  • targeted public relations activities to publicise Zeitz as an economic area; and
  • improved cooperation with other European regions faced by similar employment problems, in order to enter into regular exchanges of experience.

Since the Zeitz region's economy depends greatly on general conditions outside the region, the employment pact would not be possible without the efforts of the Saxony-Anhalt government and the European Commission. Therefore, the concrete measures and activities related to the employment pact are financed partly by the regional government, which provides DEM 190,000 of support, and partly by the Commission, which provides about ECU 200,000 from its Structural Funds for "technical aid".

The main thrust of the employment pact is to initiate new projects considered appropriate for promoting regional employment. These include the following.

  • TELA Start Project. The Burgenlandkreis district council works in cooperation with the Institut for Structure Policy and Economical Aid Halle-Leipzig and IntraRegio GmbH in three fields: (a) creating a regional technical infrastructure, which offers access to existing electronic data networks on easy terms - as a precondition for a broad use of a regional "telemetric net" (electronic networks which creates a regional information structure; mainly based on the Internet); (b) increasing the demand for regional information services provided by electronic databases, through practical demonstration and by supporting regional companies; and (c) skilling of employees and newly self-employed people for the use of these technologies.
  • EUROPACT Project. The municipality of Zeitz and four oher European regions (Sandwell and Merseyside in England, Puglia in Italy and Asturias in Spain) are developing three innovative projects, covering matters such as the exchange of experience on unemployment and the development of the competence centre.
  • A project on the development of regional cooperative marketing strategies. The Institute for Further Vocational Training (Berufliches Weiterbildungsinstitut) and regional SMEs are working together to: support marketing and distribution in companies; sensitise company managers to regional business opportunities; and develop small networks, qualified support, and skills among managers for the development of cooperative marketing strategies by using new communication technologies.

Commentary

It has long been the aim of the European Commission to integrate the social partners into territorial employment pacts at local or regional level. Given the persistently high level of unemployment, all initiatives to combat severe labour market problems should be welcomed.

From a trade union point of view, the Commission initiative to promote local and regional employment pacts is of particular importance for two reasons. First, the EU initiative could help to strength cooperation and consensus between all relevant social groups and institutions at regional level. Second, the employment pacts could support a closer linkage of the EU Structural Funds to employment-creating measures.

However, the example of Zeitz makes clear that there will be no short-term "employment miracles". On the contrary, a policy to fight unemployment at regional level must follow a long-term strategy and should be organised as an open learning process. Therefore, at the moment it is still too early to evaluate the possible success of the Zeitz initiative. One would hope, however, that all participants will take the opportunity of cooperating in the search for real improvements on the labour market. (Astrid Ziegler and Thorsten Schulten, Institute for Economics and Social Science (WSI))

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