Berlin - Bankrupt?

Berlin is facing its worst financial crisis since the Second World War. The German capital is faced with debts amounting to 80 billion marks ($ 35 billion). The situation has now been made worse by huge losses incurred by the bank "Bankgesellschaft Berlin" , 57 per cent of which is owned by the city. Authorities estimate the bank will need a cash injection of at least two billion dollars to survive. The crisis is threatening Berlin's ambitions to become a leading "Capital of Europe".

The financial turmoil has also jeopardised the existence of various world-famous cultural assets in the city. One example is the Museum Island , a UNESCO world heritage site, on the banks of the river Spree. The Museum Island houses a group of several museums. They were severely neglected under the previous communist government. After German reunification, extensive renovation was begun on the museums, but stopped abruptly in April 2001. Work has recently been resumed, but only with the promised help of the Federal Government. In addition to the Museum Island, the Staatsoper, eastern Berlin's leading opera house is also facing severe cuts. It is expected to merge with its western counterpart, the Deutsche Oper, in order to make savings.

During the last decade, the city has been under severe pressure, suffering under the effects of the collapse of communism and the decision to make Berlin the German capital again.

The fall of the Berlin Wall in 1989, brought an end to the subsidies, which during the cold war were designed to keep the city thriving. The result was a sharp increase in unemployment: up to half a million jobs were lost, which had depended in some way or the other on the subsidies. Since then, Berlin's population has severely diminished too.

It was hoped that Berlin's status as Germany's new capital would revive the city's economy. However, Berlin's debts have only increased. They now amount to the gross domestic product of a state the size of Morocco, and are predicted to rise to a staggering 85 billion marks ($ 37 billion) by the end of the decade.

The strain of governing a city teetering on the verge of bankruptcy led to the collapse of the city government. In June this year, the Christian Democrat mayor Eberhard Diepgen was forced to resign. The new Mayor of Berlin, Social Democrat Klaus Wowereit, faces a daunting task - finding a solution to the city's crippling financial crisis. The Social Democrats will govern the German capital with the Greens Party in a minority government tolerated by the former communists, the PDS, until early elections are held in October 2001.

The city finance department says Berlin must save over 1.8 billion DM ($ 800 million) by next year alone if it is to keep itself solvent. But can the city afford drastic saving measures? Numerous schools are in desperate need of refurbishment, city streets badly need repairs, and some of the city's most treasured cultural assets are in danger of being closed without financial support.

The effect of saving can already be felt across the city - fountains have been turned off and some outdoor swimming pools had to stay closed this summer. Several indoor pools may have to be shut for good in the autumn, unless private companies can be found for their maintenance.
Protest is expected, and British conductor Sir Simon Rattle has already made a start. Sir Simon was named the Berlin Philharmonic Orchestra's new music director two years ago and is scheduled to take up his new position in September 2002. He has already made it clear that he will not take over the orchestra unless the city authorities pump much-needed money into it. Only recently, the orchestra performed a musical protest. It played the last movement of Joseph Haydn's Farewell Symphony, during which the musicians walked off the stage one-by-one during the final adagio.