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W. Germany Offers Aid to Steel Region

February 25, 1988|From Reuters

BONN — Chancellor Helmut Kohl proposed a $590-million aid package for West Germany's blighted Ruhr steel region in a crisis conference on Wednesday with dozens of industry and union leaders.

The unusual meeting took place in the shadow of growing labor unrest in the Ruhr. On Tuesday, tens of thousands of workers and their families formed a 50-mile human chain across the Ruhr to press for Bonn action on their behalf.

Kohl called the meeting under pressure to revive West Germany's traditional industrial regions, pockets of depression in the strongest economy in Europe.

At the conference in the Bonn chancellery, Kohl offered $295 million (500 million West German marks) to pump new life into the Ruhr if North Rhine-Westphalia state, where the depressed region is located, agreed to contribute a matching amount.

About $236 million (400 million marks) would come from Bonn and $59 million (100 million marks) from the European Community's steel industry assistance program, the Christian Democratic chancellor said.

In addition, the federal Postal Ministry was prepared to invest another $295 million in construction and other programs in the Ruhr valley, where unemployment is more than twice the national average. Kohl said.

There was no immediate reaction from the more than 50 representatives of Ruhr companies, unions and the Social Democrat-controlled North Rhine-Westphalia government to Kohl's offer.

Sources in Kohl's coalition said Bonn's plan aimed to forge a viable economic future for the Ruhr by providing for the retraining of idled steelworkers, highway construction and a duty-free Rhine port in Duisburg.

"The goal must be to find new and more secure jobs for all those who stand to lose their traditional workplaces," Labor Minister Norbert Bluem said in a newspaper interview.

"The Ruhr region should become a germinating cell for retraining centers for high-tech industries, precision mechanics and other future-oriented technologies."

Labor leaders and the North Rhine-Westphalia state government, however, staked out prior negotiating positions that set the stage for conflict with Kohl over how much was needed to resuscitate the Ruhr.

The IG Metall union, West Germany's biggest, was demanding more than $1.18 billion (2 billion marks) in government aid for the Ruhr, Saar and northern shipyard regions together.

Ruhr steel producers wanted better incentives for investment as well as a Bonn crusade against allegedly unfair steel subsidies by other European Community countries.

Kohl's center-right coalition has said it wants to gradually dismantle the budget-cramping web of subsidies to old industries, such as coal and steel, long afflicted by severe over-capacity and cheaper foreign competition.

That goal, together with continuing plant shutdowns, has ignited protests by tens of thousands of Ruhr workers--supported by Bonn's opposition parties--charging that callous policies were consigning them to oblivion.

The flash point in steelworker protests of the past three months has been the planned shutdown of a Krupp company mill at Rheinhausen in Duisburg, the cradle of the Ruhr steel belt.

West Germany's steel industry employed close to half a million in the 1960s but now keeps less than 150,000 working.

Tens of thousands more jobs are ticketed for extinction by 1990 unless further plant closures can be averted or workers retrained for more modern industries.

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