Businessman Could Hold Key to German Elections

He does not even have a seat in parliament, yet polls show he is Germany's second most popular politician - better liked than either Gerhard Schröder or his rival for the chancellorship, Edmund Stoiber.

If - as polls predict - Mr Stoiber wins the election on September 22, Lothar Späth is expected to become a "superminister" with responsibility for turning round the economy, bringing down unemployment and revitalising the languishing east.

Until then, he has a crucial role to play in the Christian Democrats' campaign as the spokesman for all three areas.

Plump and chirpy, Mr Späth looks more like a chipmunk than someone to whom so much hope has been entrusted. But then nothing much about him conforms to expectations.

In a country obsessed with academic qualifications, he made an apparently fatal error by leaving school at 15. Yet he worked his way up to become governor of the big south-western state of Baden-Württemberg - a position he held until 1991.

Mr Späth has since reinvented himself twice: most recently as a TV chat show presenter, and before that as a businessman. His celebrity may explain his high popularity ratings, but it is his experience in industry that means so much to the Christian Democrats, because he is the driving force behind that rare thing, an east German success story.

His involvement in Mr Stoiber's campaign lends credibility to the Christian Democrat's claim that he can create jobs, particularly in the east, where unemployment is worst and the conservatives are most vulnerable.

Yet Mr Späth's personal involvement with the east had far more to do with job destruction than job creation.

In 1991, he was asked by the state government of Thuringia to move to the idiosyncratic university city of Jena, whose name is inextricably tied up with that of the optical firm Carl Zeiss. The firm was founded in 1846 and split into two companies when Germany itself was divided after the second world war.

Following reunification, the authorities hived off the core of the eastern firm and gave what was left to Mr Späth.

"We had a company with no products and no name," recalls Jörg Hettmann, the firm's spokesman. There was a workforce of 27,000 and a lot of property, including a 25-storey circular office building that stands incongruously in the old town and which became known to locals as the "Empire Späth Building".

Mr Späth called the new company Jenoptik, using the name under which its products had been distributed in the west during the cold war.

Then he got rid of almost the entire workforce. Some 16,000 people went at a stroke. Today, only 1,500 people work for Jenoptik in Jena itself.

Most of the property also went. Part of the firm's office and laboratory complex in the centre of Jena was turned into a shopping mall called the Goethe Galerie.

The process was clearly agonising for many in the town.

"Before the Goethe Galerie began to take shape, there was nothing but a hole," recalls Reyk Seela, the chairman of Jena's Christian Democrats. "I remember passing by and seeing a group of men who had worked for the firm standing next to the hole. They were crying."

Yet today it is almost impossible to find anyone in Jena willing to criticise Mr Späth. Peter Schulze is a Social Democrat and, until two years ago, the town councillor responsible for planning. His job meant he often clashed with Mr Späth over Jenoptik's plans, but today he describes him as a "very pleasant man to deal with".

A less dynamic manager than Mr Späth might have settled for realising the company's tangible assets and then shutting up shop. But Jenoptik had an important, intangible asset: the inventiveness of its researchers.

When he took over, Mr Späth had been given DM3.6bn (£1.2bn) by the authorities. All but about£200m went on paying redundancy money. What was left was ploughed into research and the purchase in 1994 of a western firm - the first to be bought by an eastern company.

Jenoptik operates in niche areas, producing lasers that can perforate to within 0.1 mm of a surface, and its profits have grown for the past three years. But, more importantly for Jena, it has helped draw in other firms that can interact both with Jenoptik and the university.

The town's 12% unemployment rate is the envy of most of the rest of the east, where the average is 18%.

Mr Stoiber, like Mr Schröder, is reassuring Germany's security-conscious voters that he can revive the economy without excessive trauma. Yet the lesson of Jena which he has held up as a model is anything but comforting.

"It is that, if you want to reach your goals, you have to take risks; that you have to accept high, if temporary, unemployment in order to have a modern industrial structure," Mr Seela says. "That is not an easy message for Germany today. People want change, but without changing what is fundamental".