Welcome to Berlin, welcome to Debtsville, Deficit County, IOU State. Since 1991, Berlin’s Schuldenberg or mountain of debt has ballooned from 10 billion to 60 billion euros. In fact if you piled Berlin’s debts up in one-euro coins, the Schuldenberg would be 55 times higher than the Matterhorn. I reckon.
Despite signs of recovery in the German economy at large, the Berlin unemployment rate remains very high at just over 16%. And according to the media, almost half the city’s population now lives on benefits.
An article in The Economist in September 2006 (here but for subscribers only) offered this explanation for Berlin’s financial woes:
During the cold war both halves of the city were heavily subsidised, but the money dried up after unification. The legacy was one of uncompetitive firms, a huge bureaucracy and an ingrained welfare mentality. Heavyweight firms that moved out after 1945, such as Siemens and Deutsche Bank, saw no reason to return. The results are visible as soon as one strays beyond the smart government district around the Brandenburg Gate or the posh neighbourhoods near Kurfürstendamm. Signs of poverty are everywhere. One-third of children in Berlin are poor.
Sounds like it’s all doom and gloom, but as with so many other things, Berliners seem to take it in their stride. The city’s mayor, Klaus Wowereit, even gave it a positive spin, describing Berlin as, “Arm aber sexy” or, “poor but sexy” – a label that has stuck.
Berlin, the boho babe with take-me-to-bed eyes but without a penny to her name. It might not be entirely true but it’s not that wide of the mark either.
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