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Cablegate: Southwest Germany Economic and Political News

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 FRANKFURT 002451

SIPDIS

SENSITIVE

DEPT FOR EUR/AGS AND EB

E.O. 12958: N/A
TAGS: ECON PGOV GM
SUBJECT: SOUTHWEST GERMANY ECONOMIC AND POLITICAL NEWS

1. (U) Summary: This is the first in a series of monthly
cables planned to summarize political and economic events in
ConGen Frankfurt's consular district. End summary.

Political News
--------------

2. New Hesse Cabinet: Corts and Gruettner on the Rise

(SBU) Roland Koch named the ministers of his new cabinet on
February 24. The number of ministries inreased from nine to
ten by dividing portfolios previously under one minister.
Three of the ministers are new. The Lord Mayor of Fulda
Alois Rhiel will be the new Economics Minister. The very
popular local politician has an economic background and
belongs to the progressive wing of the CDU known for
creative ideas and reaching out to non-traditional partners
such as environmental groups. His main issue will be
Frankfurt airport expansion, planned for 2006. Minister of
Higher Education, Science and Culture, and Frankfurt CDU
chief Udo Corts replaces outgoing FDP chairwoman Ruth
Wagner. Corts is seen as a potential successor to Minister-
President Koch. Former CDU parliamentary manager Stefan
Gruetter represents the Hesse CDU's conservative wing.
Gruettner takes over the State Chancellery from Jochen
Riebel, and has the important task of coordinating Koch's
policies among the other ministries.

3. Upcoming Visits to Washington by German Officials

(SBU) Hesse Minister-President Koch (CDU) plans a visit to
Washington D.C. May 13-15, and if his schedule permits, will
also travel to Hesse's partner State Wisconsin. Koch has
requested Consulate assistance in setting up meetings. He
plans to focus on international issues. Koch is positioning
himself as a national CDU player in his ambition to be CDU
chancellor candidate in 2006. Interestingly, he announced
his visit while Angela Merkel was in Washington.

Baden- Wuerttemberg Economics Minister Dr. Walter Doering
will also visit the U.S. this year. We are gathering
details.

4. Alexander von Stahl Joins Baden-Wuerttemberg FDP

(SBU) Alexander von Stahl, the former Federal Prosecutor,
who was released from office in 1993, has joined the B-W
FDP. Von Stahl is a controversial figure. He moved from
Berlin to Ettlingen, a small community south of Karlsruhe
and is now a member of the Ettlingen FDP chapter. The
Chairman of the Ettlingen FDP is Rudolf Doering, the brother
of FDP State Chairman and Economics Minister Walter Doering.
Von Stahl has already established contact with Stefan Havlik
and Dietmar-Dominik Hennig, two members of the Ulm FDP who
made headlines last year by publicly supporting Juergen
Moellemann's criticism of Jewish leaders. Von Stahl is also
in touch with Hans-Manfred Roth, the former ultra-
conservative chairman of the Bad Cannstatt FDP who caused a
stir by inviting Austria's Joerg Haider to speak in
Stuttgart.

5. Stuttgart Islamic Experts Group Concerned About Islamic
Fundamentalist Links to German Extremist Groups

(SBU) The Stuttgart "Islamic Experts Group" of the Baden-
Wuerttemberg State Office for the Protection of the
Constitution, founded in 1997, has gained more importance
since 9/11. The unit consists of 35 experts who are fluent
in several Arab languages, screen Internet pages, Arab
papers and Arab TV programs. Landolin Mueller, chief of the
group, states that Internet messages are difficult to
interpret when dialects come into play. Hidden messages
contain intense hatred against Israel and the U.S. Hatred
and attacks against the U.S. are in most cases legitimized
with quotes from the Koran. Mueller notes the number of
militant Islamic fundamentalists is increasing but
infiltration of fundamentalist circles is extremely
difficult. Mueller is concerned about the Internet linkage
between different militant groups and the fact that these
circles seek loose ties with right and left wing extremist
groups in Germany. Their hatred of the U.S. binds them.

Economic News
-------------

6. Paris Overtakes Frankfurt Airport in Number of
Passengers

(U) Paris Charles de Gaulle overtook Frankfurt Airport in
2002 with the largest number of passengers in continental
Europe. According to figures released by the Board of
Airlines in Germany (BARIG) on March 20, Paris had 48.4
million passengers, while Frankfurt had 48.2 million.
Frankfurt is still Europe's number one cargo airport. 1.5
billion tons of freight were transported through Frankfurt,
but Amsterdam and London-Heathrow are catching up. The
announcement renewed calls by Frankfurt Airport Executives
for the speedy construction of a new runway at Frankfurt
Airport.
7. Regional Airports in Southwest Germany Losing Passengers

(U) The Stuttgart Airport owns over 60 percent of the
regional Baden Airport in Soellingen (between Karlsruhe and
Baden-Baden), a former military airport. In order to keep
the status of "regional airport," investments up to 200
million Euro will be necessary. Georg Fundel, Managing
Director of the Stuttgart Airport, is under pressure from
the B-W State Government to make such a financial commitment
despite declining passenger numbers at smaller regional
airports. During a meeting with Consul General, Fundel made
clear that he has no intentions to invest the 200 million
Euro and called the Soellingen airport "a stillborn child".
Given a choice, Fundel would rather close the airport than
invest the money. In light of the current downturn in the
airline industry, all civilian airports in Baden-
Wuerttemberg are reporting lower numbers. In 2002, the
Stuttgart airport, for example, lost 900,000 passengers, a
drop of 10 percent compared to the peak year of 2000.

8. Saarland Has Low Unemployment, New Focus on Automotive
Sector

(U) Saarland, the smallest German state, has the lowest
unemployment. In 1999, Saarland was number eleven in
Germany, today it is number five with 9.9 percent.
Unemployment rose 4.7 percent in January compared with
December. (The national average was 10 percent.) Saarland
also showed the biggest jump in growth in Germany with 1.2
percent (Germany average: 0.2 percent). The growth is
attributed to successful economic development initiatives
and a shift away from steel and coal towards automotive
supply industries.

9. German Customs Catch Tax Evaders at Swiss Border

(U) In 2002, customs officers of the Singen customs office
have confiscated 1 billion Euro during random checks of
vehicles at the German-Swiss border. According to German
customs officials Germans from all professions bring cash
over the 283-kilometer-long border to Switzerland to avoid
German taxes. 47 million travelers and 20 million cars pass
through the 24 border checkpoints each year. The Stuttgart
IRS office alone was able to collect an additional 9.3
million Euro in 2002 due to the findings of the customs
officials.

10. IBM Germany Has New CEO

(U) Walter Raizner is the new CEO of IBM Germany. He
succeeds Erwin Staudt who was appointed Chairman of the
Supervisory Board. Raizner expects a difficult year for IBM
Germany, with IT markets shrinking by 1.7 percent.

11. Zeiss Loses Money, Lays Off Workers

(U) The Optics Company Carl Zeiss announced that it will
have to cut 200 jobs at its headquarters in Oberkochen, a
sharp decline from its 2002 growth, which created 500 new
jobs. During the first four months of the new business year
(which started October 1, 2002), turnover dropped by nine
percent.

12. DaimlerChrysler's Profits Improve

(U) DaimlerChrysler reported a 6.8 billion Euro operating
profit for the year 2002. The Mercedes Car Group
contributed the largest growth, with an operating profit of
3.02 billion Euro and the Chrysler Group with 1.3 billion
Euro. DaimlerChrysler's problem division is trucks and
vans, with a loss of 343 million Euro. For the year 2003,
DaimlerChrysler CEO Juergen Schrempp is worried about
profits. The global economic situation and international
tensions may have a negative impact on growth.
DaimlerChrysler is in 100 countries.

BODDE

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