EU's future tale of two cities

A small town in eastern Germany has emerged as the new venture capital of Europe - thanks to the kommissars of socialism who despised capitalism and all it stood for. Another one, 400 miles away on the border with France, is held up as the ideal for a solar- energised city of the future. Both are examples of what the EU says Europe should be and illustrates the awesome might of the German economy - the world's third largest - which continues to grow.

Even though the burden of reunification continues to take a heavy toll on the country, and Brussels will donate a further #10 billion to the east's redevelopment over the next six years, the tale of these two cities is, say experts, proof of what can be achieved with Brussels backing and domestic tenacity.

Tilman Schweiger, a Frankfurt business analyst, says: "The disparate towns of Jena and Freiburg serve as an illustration of the new economies and how they can be harnessed for future prosperity. Brussels sees them both as cities of the future and it's not surprising why."

Eurocrats are promising tax breaks in the billions to turn the continent on to solar power - Brussels wants 6% of all industry to be fuelled by the sun by 2010.

The model for the transformation is the old university city of Freiburg on the border with France where that 6% total has already been reached. Not just in businesses either but in schools, homes and the local football club. When the thirsty burghers of Freiburg drink a glass of the local brew they do so in the knowledge that from brewing to bottling the local Ganta brewery has done it all au naturel.

At the local football club the floodlights, turnstiles, ticket machines and showers in the changing rooms are all linked to the sun. So are all 23 local schools, every parking meter, billboard and new house along with a sizeable chunk of old ones. It's not just a good- life concept enjoyed by a few mung-bean-chomping, open-toed-sandal- wearing eco warriors; hard-nosed businessmen interested more in the bottom line than the ozone layer are enjoying heating and operating costs as much as 80% below their rivals.

"We went solar about six years ago as part of the local initiative drive and we have never looked back," says Heinz Detmar, a sliding- door manufacturer. "Freiburg has become the model for the entire EU." Dr Rolf Disch, who designed a solar house which went on display at the Expo 2000 trade fair in Hannover last summer, built it in Freiburg because of its forward-thinking policies. Balcony rails outside and panels on the roof channel solar energy into ceiling heaters and storage tanks, making the entire unit self-sufficient. Like thousands of homes in Freiburg the only meter that needs reading is one for gas.

"The Freiburg model is the one we look to when we try to persuade businesses all over Europe to go solar," said an EU spokesman. "There will be tax breaks but the savings in running costs alone are enormous."

Miles away, Germany's Chambers of Trade and Commerce calculate Jena in the former DDR attracts more venture capital per person and business than any town of comparable size on the continent. This is due to the technological and scientific institutes which flourished here during the 40 years of the German Democratic Republic.

The Trabant factories and coal-burning smelters that were closed down in other cities were never prevalent in Jena. It was the Silicon Valley of the DDR, a high-tech town which was able to capitalise on those skills when the wall came down. There are currently more than 70 high-tech companies in Jena. Helmut Parusner, director of Bank Leipzig, says of the 100,000 population town: "It has become a role model for Europe and is by far and away the most successful town in eastern Germany. What's happening there and in the little towns around and about is unbelievable - everything is so much further along than places like Dresden and Leipzig."

Jena's university was a respected seat of science and technology learning during the days of the DDR and graduates now find a ready market for their skills right on the doorstep of the campus. One venture capitalist company actually relocated its offices to Jena to fund the start-up companies and ease others into going public on the stock market.

A spokesman said: "There is an incredible well of talent in this town. With the university at nearby Ilmenau also turning out science and technology graduates, the pool of talent will only grow. That is why so many managers, executives and analysts come to study what is now being termed The Jena Effect."

These venture capitalists are slowly turning the opinions of middle-aged East Germans who still harbour suspicions about the capitalist way after losing benefits and jobs due to the reunification of Germany. Burkhart Wittek, chairman of the Forum venture capitalist group, says: "As more investors see the potential in Jena so the population becomes more attuned to the Western way of doing things.

"Jena can only get stronger. We are proud that Germany is held up as a model of technical and industrial excellence when so much of our reputation in the past has been coloured by the war-time experience."

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