European Stars and Stripes (Newspaper) - October 1, 1990, Darmstadt, Hesse                                Symbolizing the troubles parts of Dresden Are still in ruins 45 years after Allied planes firebombed the baroque  wary West pollution work Force unsettle investors a amps in George by Randy Mcclain financial writer done to give up Hope for an economic Miracle in East Germany Akin to the one that saved West Germany after world War ii. Just done to expect it to materialize overnight. Nearly 11 months after the fall of the Berlin Wall european economists Are bemoaning the fact that business growth in East Germany is proceeding much slower than was first expected. And the analysts say numerous Legal environmental and psychological hurdles continue to stand in the Way of an economic turnaround. A business has been reluctant to expand a eastward up to this Point a said Hans Hermann Jur Gensmann a spokesman for the German chamber of Commerce in Bonn. Banks department stores cigarette companies and a few automobile manufacturers have headed East but the Overall level of investment so far amounts to a trickle when matched against what a needed. A there Hasni to been nearly As great or Quick a movement of the actual producers of goods Aspe it me anticipated at the beginning of All this a said Mike Young a european Market strategist with Merrill Lynch in London. Young Jur Gensmann and others pointed to several factors eroding Western companies interest in striding into the East to build factories make products and create jobs at least on the scale that a needed to make a difference in East Germany a Standard of living. Here Are a few of the thorniest problems a pollution. The Money needed to clean up the environment is far greater than anyone imagined. The extent of water and soil contamination has scared Many Western companies away from refurbishing Many aging Industrial Sites. A the Only Way to make some factories usable again is to go Down 50 meters 150 feet in All directions and get rid of All the soil a one economist said. A of course that can to be  a ownership of land. Despite a pre unification agreement Between East Ana West Germany that places a time limit on former owners rights to reclaim land seized during the years of communist Rule economists said Many companies Are still reluctant to buy property in the East. Companies worry that Legal Battles with former owners will cause Long delays on projects and add to development costs. A tax Breaks. West German tax incentives that could entice businesses into making sizable investments in the East Arentt fully developed yet and economic experts said Many companies wont move until a Clear business Friendly program is established by the National government. A weak work ethic. Observers said Western companies Are uneasy about starting new ventures in the East because they doubt that the majority of East germans Are willing to work hard enough to make the operations successful. A a we re dealing with a different mind set a different culture a Jur Gensmann said. The Cost of repairing the environment in East Germany could prove to be the biggest business expense of All analysts said. A effectively what you have to do is pick up the entire country put it in the Dustbin and Start anew a said David Owen an environmental expert with Aribas ltd., a London based investment advisory service. It could take Between 50 and 70 years to fix the pollution problems Owen said. The cleanup also will be extremely expensive. Owen estimated it will Cost $57 billion to decontaminate Rivers in East Germany and As much As $160 billion to restore tainted land. Companies considering establishing an Industrial beachhead in the East Are worried about the extent of pollution for two reasons. First unless the German government agrees to help pay the Tab private Industry will have to Bear the full Cost of cleaning up a factory site before building something new on it. And second some companies Are worried that they could be hit with huge damage claims from citizens if pollution related health problems crop up at some Point in the future. Corporate reluctance to move East is not a state of mind afflicting Only West German businesses. Companies from other countries including the United states Are also behaving cautiously said Young of Merrill Lynch. The upshot for East Germany is that things May get much worse before they get any better. One dramatic result will be a Sharp increase in East German unemployment As industries in the East shut Down after discovering they Are unable to compete with companies that make the same products Only better in the West. Doris Homelsen an East German expert with the German Institute for economic research in Berlin said she expects unemployment to reach 1.4 million in 1991 with an additional 1.1 million workers on part time status because companies have Little or nothing for them to do. The total estimated civilian work Force in East Germany is 8.6 million people. A there is no easy walk into this Market Economy a Cornelsen said. Jur Gensmann said he expects More than 3 million East germans to be Laid off or placed on part time status by january. Industries that will be hit the hardest a perhaps wiped out completely a include steel shipbuilding chemicals clothing and textiles analysts said. East germans looking West for salvation May have a Long wait said Martin Mccauley a professor at London a school of slavonic and East european studies. Shrewd Western companies May delay moving East with new manufacturing plants offices and jobs until conditions get so bad that failing companies can be snapped up there for pennies on the Dollar he said. Plus Mccauley said there Are thousands of businesses in East Germany that Arentt Worth salvaging no matter How cheap the Price. A there Are some 8,000 enterprises up for grabs in East Germany and no More than half a 2,000, if you re a Pessimist a Are viable a he said. A a lot of places will be left High and  economists said the Best Hope for East Germany Over the Long run will be the creation of More service sector jobs such As hotel clerks Bank tellers and salesmen to replace manufacturing jobs that fall by the Wayside. A the shift to service sector jobs will happen but not too fast a Jii Gensmann said. A it could take five to 10 years a largely because there Are so Many manufacturing workers in the East who Arentt really needed at current Levels of productivity. It will take a Long time to create other jobs for them All he said. Many Western companies Are concerned that the average East German employee Isnit capable of working at the Pace that the Industrial world demands Jur Gensmann added. A they done to want to take any initiative a he said. A they wait to be told what to do. Even companies that have already gone East Are reluctant to expand further because of the work Force a he said. A we underestimated this difference and i think it will take five or even More years to overcome the problem by retraining the  until that happens Jur Gensmann expects a lot of Western companies especially those that rely on skilled labourers to avoid investing in the Region. A of course that strategy does no to really help rebuild the East a he pointed out. 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