Mecklenburg-Western Pomerania: Will economy shape the vote?

The recent election victory of the far-right AfD party in Saxony-Anhalt has shaken up Germany's political landscape. Although Saxony-Anhalt is only a small state, the AfD's landslide win with nearly 44% of the vote has drawn considerable international attention, as it means this would the first time that a far-right party will likely enter a German government since World War II.

That is not expected to happen in Mecklenburg-Western Pomerania, where voters head to the ballot box on Sunday. State Premier Manuela Schwesig of the center-left Social Democrats remains popular, as polls show, though she isn't without her critics.

The latest polls suggest a neck-and-neck race between the Social Democrats and AfD, rather than a landslide victory for any one party. In fact, the Social Democrats' approval ratings have been on the rise and could indicate a successful final push, potentially returning Schwesig to power.

Lower wages, but solid economic growth

Mecklenburg-Western Pomerania, like Saxony-Anhalt, is in eastern Germany, but its economy is relatively stable, even though unemployment stands at 7.8%, slightly above the national average, and the median gross annual salary is €47,750 ($54,800) — about €6,000 less than the German average. But Mecklenburg-Western Pomerania has seen solid economic growth in recent years.

Jochen Schulte, state secretary in the state's Economy Ministry, said Mecklenburg-Western Pomerania's economy has expanded by 5% in inflation-adjusted terms since 2020, compared with 4.6% for Germany overall.

Mecklenburg-Western Pomerania has a large agricultural sector, although it employs relatively few people. Back when the state was part of East Germany, farms were consolidated into large, state-run enterprises known as agricultural production cooperatives, rather than privately organized as in West Germany.

In many instances, these farm sizes have remained the same since reunification. A typical agricultural company in Mecklenburg-Western Pomerania will control about 280 to 283 hectares (up to 700 acres) of land, whereas the national average is only about 65 hectares.

The state's now private agricultural companies continue to benefit from their large size, ensuring efficient labor use, strong market positioning, greater market power through centralized purchasing, and a strong negotiating position when selling produce.

Many jobs in shipbuilding, tourism

The state's second major industry is shipbuilding and maritime services, which accounts for a significant share of economic output. Being on Germany's Baltic Sea coast, Mecklenburg-Western Pomerania has also benefited from the recent investment boom in its defense sector. This has brought business — and jobs — to major shipyards in Wismar and Stralsund, at companies like Thyssenkrupp Marine Systems and other shipbuilders.

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Tourism is another key sector in the state. Until 1990, Mecklenburg-Western Pomerania was one of the most important travel destinations for East Germans. Since the fall of the Berlin Wall, Germans from east and west have continued to flock to the Baltic coast, and the region is Germany's second-most popular vacation destination.

That said, relatively few people are directly employed in the tourism sector. That is in part merely a statistical quirk, as many tourism jobs overlapping with service jobs, and also because many tourism jobs are seasonal.

According to figures from the Economy Ministry and industry reports, some 150,000 to 160,000 jobs depend on tourism, either directly or indirectly. Water-based tourism, whether on lakes or the Baltic Sea coast, accounts for an estimated 19,000 jobs.

Mecklenburg-Western Pomerania has few large enterprises, such as automakers and chemical companies, which makes its state and civil service branch the region's largest employer.

Rostock-based AIDA Cruises is another major employer. So is Nordex SE, a manufacturer of wind turbines with production facilities in various regions. German rail operator Deutsche Bahn provides many jobs through its service and maintenance hubs, as do the major ports of Rostock and Sassnitz.

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Fossil fuels, renewables power regional economy

Another key industry is the energy sector, with large quantities of Germany's fossil fuels brought in via the Baltic Sea.

When imports of Russian gas came to a standstill in 2022 following the full-scale invasion of Ukraine, the Nord Stream gas pipeline connection points near Lubmin lost their significance. However, a large portion of Germany's liquefied natural gas imports are still unloaded, processed and distributed in Mecklenburg-Western Pomerania.

Energy availability, not only from fossil fuels such as oil and gas, but also from green sources such as wind and solar power, is becoming increasingly important for the state as well.

In August, the Schwarz Group — which operates the Lidl and Kaufland supermarket chains — announced it would invest €5.6 billion ($6.4 billion) in the construction of a data center south of Rostock.

During the project's presentation in the state capital, Schwerin, the company said its investments in Mecklenburg-Western Pomerania could reach tens of billions of euros.