‘not relevant to the system’: the crisis in the backyards

8/9/2019 ‘Not Relevant to the System’: The Crisis in the Backyards

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‘Not Relevant to the System’:The Crisis in the Backyards

MATTHIAS BERNT and DIETER RINK

Abstract ijur_985 1..8

This essay provides insights into the crisis unfolding in the ‘backyards’ of globalization,that is, in regions that are largely abandoned in terms of capital and are characterized by de-industrialization and depopulation. We take Eastern Germany as an example toexamine how the crisis manifests itself in this context. We look at the turmoil around the failed sale of the Opel car company, the acquisition of pre-fab housing estates by globalinvestors and risky nancial transactions by municipal companies to show how crucialdecisions about the fate of urban regions have become widely disembedded from localdemocratic structures. We argue that regions that are ‘not relevant to the system’ are not only particularly hard hit by the current crisis, but are also at considerable disadvantagewhen attempting to mobilize power to achieve solutions that are adequate to solve their problems.

IntroductionHow does the current nancial crisis affect urban development? Whatever the answermight be, it is obvious that this question cannot be answered in a ‘one-size-ts-all’manner. Moreover, an appropriate answer implies the clarication of what the term‘crisis’ refers to in this instance, and how the relationship between economic and urbandevelopment might be conceptualized.

First, it is important to distinguish the everyday use of the term ‘crisis’ as a synonymfor decline, crash, doom or failure from the concept of ‘crisis’ that implies the dialecticalmoment at which the inherent contradictions of a system break free and cause thetransformation of the existing totality into a new one. This moment has found particularattention during the ongoing global nancial crisis. In the wake of current turmoil, manycommentators seem to pin their hopes on the impending end of neoliberalism, in somecases even of capitalism, and augur the dawn of a renewed ‘New Deal’ of stateinterventionism. While it is still too early to ascertain whether these predictions maycome true, we nd that too often arguments overemphasize the moment of disruption,which is implied in the meaning of ‘crisis’. The dialectical meaning of the Hegelian term Aufhebung (which concurrently means abolishment, preservation and raising to a higherlevel) is not very clear. By contrast, we understand a crisis as the moment at whichinstitutionalized forms of regulation fail, yet at the same time are preserved and replacedin a way that builds on what already exists. A crisis thus reveals the central contradictionsof the form that is in crisis and also opens the way to new forms of regulation — but itdoes so on the basis of existing forces. As a consequence, new forms that need to bedeveloped as a solution to the crisis are not predetermined. Rather, they are an outcomeof political struggles, ‘ une trouvaille ’ (Lipietz, 1985), in which certain alternatives winthrough against others. A number of crisis solutions are thus conceivable, ranging froma disruption of existing forms to their intensication (see Brenner et al ., 2010).

International Journal of Urban and Regional ResearchDOI:10.1111/j.1468-2427.2010.00985.x

© 2010 The Authors. Journal Compilation © 2010 Joint Editors and Blackwell Publishing Ltd. Published by BlackwellPublishing. 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main St, Malden, MA 02148, USA



Secondly, we conceptualize urban development as being largely determined bycontradictory movements of capital that is invested in, or withdrawn from, existingspatial congurations. David Harvey (1982; 1985) and others have pointed out howurban and regional development in capitalism is characterized by uneven geographicaldevelopment and a see-saw movement of de- and reterritorialization as a means toovercoming problems of over-accumulation. Thus, whatever developments take place, incapitalism they can be expected to be articulated unevenly across localities, places andscales. Against this background we argue that the current crisis should be understood asa crisis of the actually existing mode of a capitalist production of space, that is, an urbancrisis, which is exercised in regionally specic and different ways at the same time andwill presumably lead to geographically diverse solutions.

In summary, we conceptualize the recent crisis as being not only rooted in the existingforms of regulation, and opening the way to new forms, but moreover we expect that theestablishment of these new forms is (1) not predetermined and (2) spatially uneven. Weargue that regionally diverse forms of regulation can emerge from the crisis, dependingboth on the political struggles and the way in which a region is embedded in the globaleconomy. Thus, very different scenarios are conceivable, ranging from increasedredistribution and ecological interventionism to intensied forms of exploitation.

While this view might seem self-evident to many urban scholars, it is not yet veryprominent in the German discussion about the current crisis. Discussions that relateeconomic developments and urban issues are still largely absent here, and there is adominant tendency to see the crisis mainly as a turmoil of nancial markets that isresulting in problems for the economy. As a consequence, public intervention hasconcentrated on rescuing nancial institutions and supporting certain branches (namelycar producers with car-scrapping schemes); the government’s position is that this urryof state intervention should be the exception and not be replicated in other sectors.German chancellor Angela Merkel summarized this succinctly when she declared in aparliamentary debate: ‘There are nancial institutions which are relevant to the systemand must be rescued. But there is no such thing as industrial institutions relevant to thesystem’.

In this essay we argue that the notion of sectors being ‘relevant to the system’ and theimplication therefore that other sectors are irrelevant to the system does not only applyto different economic sectors but also to urban regions. We use Merkel’s distinction todiscuss the implications of the crisis for various East German regions characterized byde-industrialization, depopulation and abandonment in terms of capital and expose howthe idea of sectors being ‘relevant’or ‘irrelevant’ to the system intensies problems there.We concentrate on various ‘hotspots’ in which developments illuminate currentconstellations. However, it should be noted that, as the crisis is still unfolding, thisexamination can only be preliminary and far from comprehensive.

Hotspot 1: Postfordist dependencia in EisenachThe rst place we examine is Eisenach, a city of 44,000 inhabitants in southernThuringia. Eisenach has had a car-manufacturing tradition since 1896 and was one of theleading car producers in the Eastern Bloc, employing more than 9,000 workers in the‘VEB Automobilwerke Eisenach’ alone. After the reunication of Germany, the factory,like nearly all former East German industrial companies, was closed and sold to the OpelCorporation, which is itself a traditional German car producer and a subsidiary of General Motors (GM). Opel invested heavily and, with the support of massive publicsubsidies, opened a super-modern car-production plant in 1992 in which compact carssuch as the Opel Vectra and Opel Corsa were assembled. This investment developmentled to the rise of the southern Thuringian region as an economic cluster based on moderntechnologies and wage differentials between Eastern and Western Germany. In stark

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International Journal of Urban and Regional Research© 2010 The Authors. Journal Compilation © 2010 Joint Editors and Blackwell Publishing Ltd.



contrast to most of Eastern Germany, which was widely de-industrialized (see Bernt,2009), Eisenach gained a reputation as a kind of ‘model student’ and was considered oneof the few examples of towns that had thus far managed the transformation from asocialist to a capitalist economy successfully. Opel is pivotal to the region, providing1,800 jobs at its main factory, in addition to 7,000 jobs with subcontractors and anunknown number of casual staff. As a result, Eisenach became a regional cluster for carproduction. It offered the highest concentration of industrial jobs in all of Germany. Theimportance of Opel’s car-production factory for the entire regional economy can hardlybe overstated; in fact, Opel Eisenach yields about a fth of the total industrial productionof the federal state of Thuringia.

The current crisis has dramatically challenged this situation — not so much as a resultof lack of demand for the Opel Corsa, but as a consequence of the malaise of GM inDetroit. The logic of GM’s involvement in Opel Eisenach is interesting.As it is the parentcompany of Opel, the patent rights for vital components of Opel cars lie with GM. As aconsequence, Opel is obliged to transfer patent licence fees to Detroit in triple-digitmillion amounts annually. Moreover, GM instead of Opel is the holder of all assetsconnected to Opel, and the parent company has used these assets as nancial securities.Thus when GM got into trouble in the wake of the nancial crisis, there was animmediate danger that Opel might be drawn into the maelstrom too. If GM were to gobankrupt, the consequences for the regional economy of Thuringia would be devastating.In order to cover the debts of GM, Opel would need to cut costs through wage cuts, masslay-offs and factory closures, and eventually by selling the valuable parts of itscorporation to nancial investors. The suppliers situated around the Opel productionplant in Eisenach would be hardest hit, as their operations are totally dependent on Opel.Most likely, this would lead to a disintegration of regional supply chains in which evenprotable companies would be seriously affected. The result of GM’s problems inDetroit would thus be a razing of industrial structures in Thuringia.

From this perspective, the fate of Opel has been arguably one of the top issues inGermany’s politics in the past two years, and the course of debates and the alternativesdiscussed provide interesting insights into the realities and power balances of capitalismtoday.

It is a fact that, although all political parties widely agreed about the disastrous social,economic and regional consequences of the possible ruin of Opel, the issue of whetherthe state should intervene at all was strongly contested throughout 2009. Whereas theGerman government reacted immediately when the German bank Hypo Real Estate gotinto trouble, providing a deciency guarantee of 52 billion euros overnight, proposedgovernment support for one of the few remaining industrial cores in Eastern Germanyencountered enormous opposition. A major part of resistance towards state interventiontherefore was purely ideological and indicated the extent to which a neoliberal worldview has become the dominant ideology of political discourse: the leading argumentagainst state intervention, brought forward on a myriad of occasions (and disregardingthe realities of public involvement in all kinds of private enterprises) was that the stateshould refrain from intervention to prevent the ruin of Opel because ‘the state is only thesecond best entrepreneur’, public subsidies are ‘poison’ to the market economy and a‘downward spiral’ that will lead to socialism. Even in the current crisis, laissez-faire wasportrayed as the best solution from which government should deviate only inextraordinary, closely dened situations.

Thus, in stark contrast to the immediacy of government intervention when banks gotinto trouble, it took from autumn 2008 until spring 2009 before the German governmentreally became involved. Government support for Opel was strongly contested and manycommentators argue that it was only the pre-election situation that led to the fate of Opelbecoming a top issue in German politics. As a result, the German federal governmenteventually decided to support the separation of Opel from GM and to assist in selling thecompany to a new investor by means of a state-run rescue company, extensive subsidiesfor the purchaser and a bridging credit for GM. After extensive quarrelling about whether

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easing the bill for the German taxpayer or protecting as many employees as possibleagainst job losses should be given rst priority, and which purchaser (depending on theway this question is answered) would be the best bidder, the German government nallydecided to support the sale of Opel to Australian–Canadian component supplier Magna,which was backed by the Russian Sberbank and which planned 10,000 redundanciesacross Europe and demanded social concessions, ‘wage renunciations’ and state supportto the tune of 4.5 billion euros. Thus, less than two decades after extensive state subsidieswere used to restructure the former ‘ volkseigen ’ (nationally owned) ‘AutomobilwerkeEisenach’ to make them attractive to Opel, millions were once again to be spent to avoidthem being razed.

However, this was by no means the end of the story. During the autumn of 2009two simultaneous developments eventually turned the entire situation around: rst, theEU Competition Regulatory Authority in Brussels announced an objection to theallocation of national subsidies to individual enterprises as a form of ‘marketdistortion’ and demanded that aid pledges not be linked to a particular bidder.Secondly, and more importantly, on 1 June 2009 GM led for Chapter-11 bankruptcyproceedings. As a result, GM is now temporarily majority-owned by the United StatesTreasury and to a lesser extent by the Canadian government, with the US governmentinvesting a total of 57.6 billion dollars to revive the Detroit-based car producer. Thiseased the situation considerably for GM, which had been fairly cash-strapped until itsbankruptcy.

Backed by US government involvement, GM surprised the German politicallandscape again in November 2009 by suddenly reversing its plan to sell Opel anddeciding to retain full ownership. At the same time, the company demanded 1.5 billioneuros in support from the German government, arguing that this amount wasconsiderably lower than the one promised to bidders in the previous sales negotiations.Moreover, based on the plans of Magna, GM announced that it was going to cut 9,000 jobs throughout Europe and close factories. Since then, the future of Opel has once againopened up, and a new round of bargaining between Opel and the German government hasbegun, the outcome of which is not yet certain.

What does this story reveal about the relationship between the current global crisisand urban development? We believe that, although the details of GM’s restructuringplans are not yet clear, it shows how decisions about the future of entire regions havebecome totally disembedded from local circumstances and have shifted to be at themercy of global players’ opaque calculations. Even companies that are bankrupt stillhave the capacity to blackmail national and regional governments with the socialconsequences of their own ruin and to gamble for extensive public subsidies, masslay-offs, redundancies and wage cuts. This leads to protectionist competition in whichnational governments compete to save international corporations from bankruptcy,hoping that the burden of restructuring will be shifted to other regions. The consequencesfor the affected regions of losing this game are obvious: high unemployment rates andincreased poverty, a dramatic decrease of incomes, abandonment, poverty, crime andgeneral deterioration of local living conditions are the usual characteristics of de-industrialization. These can be studied in ‘rust-belt’ regions all around the world. Thatthis kind of future, in contrast to the business of the nancial sector, is considered ‘notrelevant to the system’, speaks volumes.

Hotspot 2: Venture capital for pre-fabs —downltering and Level OneAnother event arising from the nancial crisis in Eastern Germany is considered ‘notrelevant to the system’ either: the bankruptcy of Level One, one of the leading nancialinvestors in the notorious ‘low-demand’ housing stock of the region.

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Totally unknown until 2005, this Austrian company with addresses in London, Jerseyand the Cayman Islands used loans from Credit Suisse, J.P. Morgan and the Royal Bank of Scotland to buy more than 28,000 ats all around Eastern Germany. Its business modelis a perfect example of the economic use of ‘leverage effects’. It is based on takinglow-interest loans, reinvesting the proceeds in budget-price apartment buildings andearning a rate of up to 9% return on the difference between rents paid by the tenants andthe cost of the interest. The preconditions for this kind of business are thus low interestrates, low base prices and a steady cash ow from the rents paid for the apartmentspurchased.

Level One mastered this model and, within three years, became a major landlord inmany pre-fab neighbourhoods all around Eastern Germany. These housing estates, whichwere constructed on the urban periphery during the era of socialism, are usuallyconsidered difcult markets characterized by high vacancy levels, at best moderateincomes and a rapidly ageing population. However, for Level One they providedexcellent investment conditions.

The company purchased whole blocks of pre-fab ats in neighbourhoods such asBerlin-Hellersdorf, Dresden-Prohlis, Leipzig-Grünau and Halle-Neustadt at bargainprices. It kept maintenance and renovations low-key and let the apartments to low-income tenants at very competitive prices. This model soon became very popular bothamong investors and low-income tenants. However, it had highly problematicimplications for urban development in Eastern Germany’s ‘shrinking cities’. Level One,‘slumlording’ its housing stock, facilitated the concentration of low-income households,accelerated socio-spatial polarization, catalyzed the downltering of middle-classneighbourhoods and blocked all planning efforts to rebuild the neighbourhoods for asmaller population size (see Bernt, 2009). The results of Level One’s successful businessmodel for urban planning were thus devastating and led to a disintegration of existingcommunities and effectively blocked public intervention.

With the outbreak of the nancial crisis, the model reached its limits. As a result of anew assessment of securities and rising credit costs Level One was forced to declarebankruptcy at the end of 2008. The bankrupt investment company’s property wastransferred to a trustee. The consequence of this bankruptcy for tenants was animmediate stop of all services, including house cleaning, mail service and maintenance.Even worse future consequences are under discussion: given the current crisis and anaverage vacancy of about one sixth of the housing stock in most East German cities, theacquisition of peripheral pre-fabs can only be made lucrative at debt-free low prices andwith a continuous return on investment. Thus, even if the trustee were to succeed innding a new purchaser for the properties at all, this buyer would most likely be an ‘assetstripper’ working with a business model fairly similar to the one used by Level One.Within such a constellation, a new chain reaction of downltering becomes foreseeable:if, owing to low real estate prices, the new buyers offer tenants extremely low rents, thisis likely to cause a further mass exodus of people living in apartments that are owned by‘healthy’ housing rms, thus putting these rms under economic pressure. This, in turn,could lead to further bankruptcies, whereby assets can be put in the market for bargainprices and once again be ‘stripped’ for quick returns, causing a deationary spiral to thebottom. Under these conditions, the bankruptcy of venturous companies in particular willnot solve, but will rather intensify the problem. Since 2000, more than 600,000residential apartments have been sold to companies such as Level One in Germany,therefore the signs of intensied price competition, with attendant hazards for urbandevelopment, are clearly visible.

Hotspot 3: Casino budgets in LeipzigPrivate-capital rms were not the only ones who gambled for quick prots. Germanmunicipal administrations became involved to an astonishing degree in the risky business





of nancial transactions and speculation too — and are now being severely punished bythe economic recession.

A good example of such a gamble can be found in the city of Leipzig. An industrial,administrative and service centre of the former German Democratic Republic, populatedby more than half a million inhabitants in 1990, Leipzig was especially hard hit by thecollapse of economic structures following the reunication of Germany, as well as bysuburbanization and demographic imbalances (Nuissl and Rink, 2005). It experiencedthe loss of about one fth of its population and is characterized by a high level of housingvacancies, widespread unemployment and the abandonment of large parts of its housingstock. The consequence of this situation for the municipal budget is severely detrimental:low tax revenue on the one hand, and high remaining expenses on the other hand.

Against this background, Leipzig was urged to nd new sources of revenue, and it hasmade extensive use of ‘creative’ nancing instruments since the mid-1990s. The cityvigorously participated in ‘cross-border leasing’ arrangements and is now particularlyhard hit by the problems arising from these in the wake of the nancial crisis. ‘Cross-border leasing’ (CBL) arrangements are leasing arrangements whereby the lessor andlessee are situated in different countries and use this situation to arbitrage the differencebetween tax laws in these countries. In a CBL transaction an investor — usually a UScompany — leases an asset upfront from a foreign entity — in this case a Germanmunicipality. The owners immediately lease back this asset from the investor, so that theystill own and operate the asset. The US investor gains a quick return for writing off theupfront lease payment. Put bluntly, CBL arrangements are a form of cross-Atlanticpublic–private partnership in which a private US investor collaborates with a Europeanstate agency (the municipality) to shelter taxes against the US State.

The CBL model became extremely popular around the turn of the millennium amongGerman municipalities which, as a result of de-industrialization and population losses,were in dire straits. Consequently, Germany became the EU market leader for CBLarrangements. Leipzig played in the top group of this tax-avoidance league andaltogether the city, or its enterprises, such as its transportation company and utilitycompanies, closed eleven contracts with private investors. Incorporated assets comprisedstreetcars, the tramway grid, the sewage plant, parts of its canalization, the drinking-water network, as well as the Leipzig Trade Fair and the municipal hospital. No exactdata are available but estimations by independent experts assume that the volume of Leipzig’s CBL contracts add up to about 4 billion euros — nearly four times the volumeof Leipzig’s municipal budget.

Although the implications of this business for the nancial autonomy of the city wereimmense, hardly any of these transactions were discussed in public. In fact, as recentlocal debates reveal, neither the treasurer nor the council members had sufcient basicknowledge of the contracts they were signing, they did not read the small print, and manydid not even understand enough English to be able to read the often 1,500-page-longcontracts. It therefore comes as no surprise that Leipzig, like most other municipalities,has been more or less outmanoeuvred by its ‘partners’, and the distribution of risks andbenets in these highly complex arrangements turned out to be greatly uneven.

Since the nancial crisis has unfolded, the contracts have increasingly raised publicconcerns, stimulated debates about the responsibilities of municipal decision makers,and, in the case of Leipzig, even led to criminal proceedings against top managers of city-owned companies. The main point of concern is that in most contracts the AmericanInsurance Group (AIG) served as the duciary service company and that these contractsusually included an obligation for the lessee (that is, the municipality) to balance adownturn in the credit rating of the insurer with additional securities. Since the insurancegiant AIG proved to be a blatant speculator in subprime mortgages and a major holder of ‘toxic’ assets during the recent crisis, the rating of AIG fell markedly, and this conditionhas now become unexpectedly relevant. Consequently, the cities either have to nd a newinsurance underwriter — which is only possible at high rates in the current market — orprovide additional securities.

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Interestingly, a handful of municipal managers have clearly been aware of thisproblem from the outset. With the intention of shielding their assets against the inherentrisks of CBL transactions, these managers undertook even riskier transactions bycontracting additional insurances in the form of Credit Default Swaps (CDSs). Thesewere organized in packages with asset-backed securities, called Collateralized DebtObligations (CDOs), so that eventually the attempt to insure CBL transactions led to theacquisition of even more risky CDOs. Among these ‘innovative’ nancial instruments,distributed among others by the Swiss UBS corporation, were bonds of US companiessuch as MBIA and Merrill Lynch, and even a gambling house in Las Vegas. Altogether,Leipzig concluded contracts with a volume of 292 million euros that, as early as 2009,had incurred losses of 103 million euros. In March 2010, UBS again posted losses of 84million euros. Altogether the city anticipates losses of at least 255 to 284 million euros.The losses of Leipzig’s gambling tour will therefore most likely exceed the gains by far.

Given that the tight budgetary situation was precisely the reason that most citiesengaged in CBL arrangements, this situation has led to enormous difculties. In the caseof Leipzig, which had debts of 842 million euros in 2008, the budgetary situation is soprecarious that the city has several times been close to forced administration by the stateof Saxony. The city neither holds disposable capital nor many properties that have not yetbeen mortgaged ( verpfändet ), and the provision of additional securities would thereforeonly be possible if drastic austerity measures are taken, and dramatic cuts are made insocial spending and services.

In the long run, another problem of the CBL arrangements could become even morepressing: as the assets that the city is leasing back have been transferred to the property of the participating investor, all modications reducing their value now require specialapproval by the investing company. This is particularly problematic for shrinking citiessuch as Leipzig, which have lost many inhabitants and are now burdened with an oversizedinfrastructure,enormous xed costs andan unhealthy imbalancebetween expenditures formaintenance and decreasing consumption. While on the one hand Leipzig urgently needsto adjust its infrastructural network to its reduced population size, on the other hand thisprocess could result in lowering the values of the leases and thus in the need to provideadditional securities (that is, more municipal assets to be leased) for the CBL investor. Theengagement in CBL arrangements has thus led to a situation in which the participatingmunicipality cannot govern its local matters on its own anymore, and municipal planninghas effectively become a pawn in global nancial markets.

ConclusionWhat do these stories tell us about the nature of the current crisis? While the particulardynamics driving each of the developments described above may be unique, there aredistinct patterns that suggest that these specicities in fact form part of a larger picture.

First, all these stories show that the successes that were achieved in revitalizing formerEast German cities and regions that were abandoned by capital in the early 1990s haveonly led to highly uneven, fragmented and unstable results. Previous rounds of revalorization have been dominated by short-term, disconnected and vulnerable forms of production of space, often in the form of ‘accumulation by dispossession’ (Harvey,2003), which did not result in coherent and sustainable spatial congurations. Thenancial crisis is thus also a crisis of a particular mode of production of space. Secondly,it is obvious that the dynamics of the crisis are more globalized and more interrelatedthan ever before. Whether or not unemployment rises in Eisenach is decided in Detroit,Brussels and Washington; whether pre-fab blocks in Grünau, Hellersdorf or Prohlis aredilapidating or will be refurbished depends on calculations made in the Cayman Islands;and whether or not the city of Leipzig will have to close libraries, community centres andpublic pools will be governed from Manhattan. Thirdly, the establishment of a new mode





of regulation will to a large extent be based on whether the affected entity is, or is not,‘relevant to the system’. In this context, the lack of coherence and the unbound,speculative nature of world-market integration that the ‘backyard regions’ experienced inthe previous round of accumulation becomes an immense political barrier, and ndingsolutions that are in their interests is to a great extent doomed from the start.

We can thus only develop a pessimistic view on the implications of the crisis for urbandevelopment in the ‘backyard regions’. We expect intensied triage to be conducted inregions that are deemed ‘not relevant to the system’, resulting in disadvantaged spacesincreasingly being given up.The regions’ remaining industrial structures will increasinglybe razed, jobs will be lost and poverty and unemployment will grow. New rounds of speculation fuel the disintegration and abandonment of still-valuable parts of the housingstock and municipal capacities to deal with these problems will decline — altogether aperfect recipe for organizing accelerated urban decay. Policy could deal with all theseproblems — but only if powerdistribution is changed considerably, regionaldevelopmentsare disembedded from global markets and the right to the city for people who live in it isput before the prots of nancial institutions and international corporations.

Matthias Bernt ([email protected]), Leibniz Institute for Regional Development andStructural Planning — Regeneration of Cities, Flakenstraße 28–31, Erkner 15537, Germany,and Dieter Rink ([email protected]), Urban and Environmental Sociology,Helmholtz-Centre for Environmental Research UFZ, Leipzig 04318, Germany.

ReferencesBernt, M. (2009) Partnerships for demolition:

the governance of urban renewal in EastGerman shrinking cities. International Journal of Urban and Regional Research33.3, 754–769.

Brenner, N., J. Peck and N. Theodore (2010)After neoliberalization? Globalizations 7,(forthcoming).

Harvey, D. (1982) The limits to capital .Blackwell, Oxford.

Harvey, D. (1985) The urbanization of capital: studies in the history and theoryof capitalist urbanization . Johns Hopkins

University Press, Baltimore, MD.

Harvey, D. (2003) The new imperialism .Oxford University Press, London and NewYork.

Lipietz, A. (1985) Akkumulation, Krisen undAuswege aus der Krise. Einigemethodologische Anmerkungen zumBegriff der Regulation [Accumulation,crises and ways out of the crisis. Somemethodological notes on regulation].PROKLA 58, 109–37.

Nuissl, H. and D. Rink (2005) The‘production’ of urban sprawl in EasternGermany as a phenomenon of post-

socialist transformation. Cities 22, 123–34.

RésuméCe texte fournit un éclairage sur la crise qui se développe dans les ‘arrière-cours’ de lamondialisation, autrement dit dans les régions presque totalement délaissées par lecapital et marquées par la désindustrialisation et la dépopulation. Le cas de l’Allemagnede l’Est permet d’examiner comment la crise se manifeste dans cet environnement. Enétudiant l’agitation autour de la vente avortée d’Opel, l’acquisition d’immeubles delogements en béton préfabriqué par des investisseurs mondiaux et les transactions

nancières risquées de sociétés municipales, il est montré comment des décisionsessentielles pour le destin de régions urbaines se sont largement dissociées desstructures démocratiques locales. Les régions ‘inintéressantes pour le système’ sont nonseulement particulièrement frappées par la crise actuelle, mais aussi nettement défavorisées lorsqu’elles s’efforcent de mobiliser le pouvoir en place an de mettre enœuvre des solutions appropriées à leurs problèmes.

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‘not relevant to the system’: the crisis in the backyards

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