An uncertain future for Germany’s new capital

Date: 11/02/1999

Germany's neighbours may fear the symbolism of Berlin's resurgence as the country's capital. But, as Simon Taylor reports, there is no evidence that their concerns are justified

In the course of this year, Berlin will once again become the seat of the German government - completing the process of reunification which began nearly a decade ago with the fall of the Berlin Wall.

It is an event of worrying significance for many non-Germans, who see the concentration of national power in the old Prussian imperial capital as a symbol of renewed German hegemony in Europe.

But far from trumpeting the move, the Germans themselves appear anxious to play it down, avoiding the sort of great ceremonial event to mark the occasion that you might expect from the French or British with their love of the paraphernalia of state.

Berlin's relaunch as the the federal capital will be a gradual process, beginning on 23 May with the reopening of the Reichstag, the old home of the parliament, famously burned down by the Nazis in the 1933 in an attempt to discredit left-wing opponents. On the same day, a new federal president will be elected, widely expected to be the former Minister President of North-Rhine Westphalen Johannes Rau.

However, the government itself will only take up office in the city in stages from September onwards.

The hesitant, almost embarrassed fashion in which the move is being carried out underlines the gulf between perceptions of Berlin, and the new Germany, and reality.

The German parliament only agreed to reinstate it as the federal capital reluctantly. Despite the commitment in the country's post-war constitution to make Berlin the seat of government when the two halves of the country were reunited, the vote in 1990 to move the administration from Bonn was only carried narrowly, by 338 votes to 320.

Without the votes of the Liberals and the former east German Communist Party, the PDS, which wanted to avoid former East Germany being ruled from the West like some kind of colonial outpost, Germany's political class would have stayed in the sleepy Rhineland town.

Bonn was deliberately chosen as the new capital after the Second World War as part of attempts to prevent a resurgence of centralised power in Germany. This saw Frankfurt emerge as the country's financial centre and Hamburg as a publishing powerhouse.

And despite the decision to move back to Berlin, by far Germany's largest city with a population of nearly 3.5 million, it is not being turned into an arena to parade the country's economic and political weight in Europe and the world.

Instead of property values soaring as well-paid civil servants and representatives of Germany's industrial banking giants vie for space close to the political levers of power, they have slumped.

The new capital has yet to exert its force as a magnet drawing investment. As the city's mayor of 13 years, Eberhard Diepgen, says: “The move to Berlin has come five years too late, because of political problems.”

Just as the politicians prepare to head back to the city, it is suffering a slump sparked by the government's decision to withdraw the heavy subsidies which had been paid to maintain the western part of Berlin as a showcase of capitalism.

The unemployment rate is among the highest in Germany at 18&percent;, following the loss of an estimated 200,000 blue-collar jobs as the aid which enabled traditional heavy industries to compete was shut off.

There are a few oases of success, such as the investment by Sony and Daimler-Benz in the new commercial centre built on Potsdamerplatz where Hitler spent the last days of the war. But Germany's industrial and commercial giants like BMW, Bertelsmann and BASF are still firmly entrenched in headquarters spread out across Germany's densely populated territory.

In fact, before things get better for Berlin, they are set to get worse.

The current overhaul of the EU's €40-billion regional aid policy, which aims to concentrate precious resources on the most deserving areas, will almost certainly rob the city of its right to funds from Union coffers.

Berlin is currently fighting for the aid to be phased out over six years to allow it to make a soft transition to the harsher environment. Diepgen dismisses the argument that becoming Germany's capital city will compensate for the loss of EU aid as “plain stupid”.

There is, of course, a positive reason why the handouts which Berlin has benefited from up until now face the axe: namely, that incomes are rising. “We must be glad because east Berlin no longer meets the poverty criteria,” said Christof Tannert, Socialist MEP for Berlin.

But he warns that as the aid to the city is gradually withdrawn, there is a danger that firms will be drawn to the surrounding areas of Brandenburg or into the “Speckgürtel” or leafy suburbs.

Like many politicians in big Western de-industrialising cities, Diepgen, who is expected to be forced out in mayoral elections this October, is banking on new jobs being created in the service sector and hi-tech industries. He talks enthusiastically about the new technology centre in Adlershof and 250 research institutes and numerous other science and technology parks which are springing up.

But he also highlights one of the anomalies in Berlin's economy caused by its position as western Europe's most eastern city, only 80 kilometres from the Polish border. The construction work in and around the Potsdamerplatz has made Berlin the biggest building site in Europe, yet the city still has the highest rate of unemployment in the building sector in the country.

Well-paid German workers with their trade union-defended pay and working conditions have been brutally undercut by imported labour from eastern Europe, where brickies and scaffolders will toil for a tenth of what their western colleagues expect.

Concern about the impact of cheap labour from the East has coloured attitudes towards EU enlargement in a city where Russian and Polish are now spoken nearly as much in street markets and cheap foodstores as the language of the largest traditional immigrant group: Turkish.

Tannert insists there must be a fair solution to the challenges of enlargement which addresses both the unemployment caused by immigration from the East and the commercial opportunities offered by the Polish market on Berlin's doorstep.

“The German SPD is for rapid enlargement, but one carried out in a measured way. Transitional periods will be needed for the free movement of labour and goods and services,” argues the MEP.

At the same time, Tannert point outs that Berlin has already lived through one major change, as it digested the impact of the collapse of the East German system, giving it invaluable experience in dealing with the shocks of integration with the former Communist sphere. “Berlin has been the workshop of reunification, the focus of a process which is not yet over by a long way,” he maintained.

Tannert argues that the city is also leading the way in integrating Germany's immigrants, who make up 12&percent; of the population. He points out that it was the Berlin SPD which led the call for dual citizenship for immigrants, a move which sparked enormous controversy when the new government announced its intention to press ahead with the plan after taking office last autumn. Tannert also believes the city will be one of the first in Germany to provide Islamic state education for its Muslim community.

Diepgen argues that Berlin's hopes of a prosperous future depend on being reconnected to the pan-European transport networks along which trade and wealth will flow in the next century. “Berlin is on the way to playing its traditional role as a bridge between Paris and Moscow,” he said, stressing that it is just as important for the city to be linked to the North-South network running down from Scandinavia.

As the city looks to the future on the verge of the 21st century, fears that

Berlin will become a new Protzstadt - a 'show-off' city flaunting Germany's economic and political power in the faces of its envious neighbours to east and west - seem totally misplaced.

Berlin's problems are similar to those faced by any major city in the developed world: a loss of manufacturing jobs; a tendency to blame unemployment on foreigners driven by domestic poverty to seek a better life in the wealthy West; and a struggle to replace the blue-collar jobs of the past with white-coated work in the new knowledge-based industries.

The only difference is symbolic: German attitudes towards the new capital city reflect a greater uncertainty about the country's future, after a troubled century, than many other Europeans might have expected.