The withdrawal of US troops from Germany would result in thousands of job losses in the regions affected, should President Donald Trump carry out his threat to remove 5,000 US military personnel from the country, according to a study published on Wednesday.
The study by the Leibniz Centre for European Economic Research (ZEW) and the University of Cologne found that each soldier withdrawn would cost half a full-time job in the affected region, with long-lasting effects.
The research was based on the withdrawal of around 200,000 US troops from Germany in the 1990s after the Cold War had ended. This had led to regional economic shocks, one of the authors, Jakob Schmidhäuser of the ZEW, said.
“The effects of the troop withdrawal went far beyond direct layoffs at US military bases: Around 61% of the jobs lost were in regional businesses,” he said.
Schmidhäuser explained that businesses had lost turnover through the loss of consumption expenditure by the US troops and their families. Regions with weaker labour markets had been worst affected, he said.
Public finances also suffered. “The affected locations and their neighbouring municipalities responded to the loss of revenue – around 9% of their budgets – with consolidation measures,” co-author Johannes Kochems of the University of Cologne said.
Kochems explained that municipalities cut back on expenditure and hiked municipal assessment rates for property and business taxes. “Over the longer term, income losses stabilized at 3%,” he said.
The study found that the negative consequences persisted. Workers who lost their jobs when the bases closed had fewer job opportunities 15 years later and earned around 9% less over the long term.
(dpa)
