Merkel's euro push leaves east Germany out in the cold

By Stephen Brown

EISENHUETTENSTADT, Germany (Reuters) - This fading industrial city, like many in Angela Merkel's former East German home, is stony ground for the chancellor's message of European integration and fertile soil for opponents trying to stop her winning a third term next September.

More than two decades after unification, income and jobs in the five eastern states, home to 15 percent of the population, still lag behind the west and trillions of euros in transfers have not stemmed an exodus that has left some areas looking like ghost towns.

"People have too many problems to worry about the euro crisis," said Michael, a 40-year-old steelworker in the town of Eisenhuettenstadt, east from Berlin near the Polish border.

Originally called "Stalinstadt", it was built in the 1950s as an industrial complex and "the first Socialist city in Germany". The pride of the GDR, it was renamed in 1961 and had 50,000 inhabitants in its heyday.

In a familiar story across east Germany, reunification meant mass unemployment as communist-run industry failed to compete on the free market. About 40 percent of the town's population went west and much of the housing for GDR workers stands empty.

In a country whose conservative chancellor dedicates a lot of time to blue-sky thinking about the future and demographic change, the most demographically-challenged areas of Germany do not feel their plight is a political priority.

"Future? We have no future," said Suzanne, wheeling her bicycle past an abandoned prefab tower block with broken windows on the banks of a canal. She would not give her surname, like many people in a country with historic sensitivities about privacy.

Merkel's plans for a third term, if she wins, are typically undramatic and give the impression of fine-tuning a well-oiled machine. The Christian Democrats (CDU) will make her the focus of a personality-based campaign which will be new for Germany.