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Back|Berlin's economic reality and the phenomenon of constant nagging
Berlin's economic reality and the phenomenon of constant nagging
Politics
FAZ·1 hour ago·Politics·6 min read·🇩🇪Germany·

Berlin's economic reality and the phenomenon of constant nagging

Despite its reputation as a dysfunctional city, a look at the data shows an economically robust metropolis that has recovered from past crises.

Quick Look

  • Berlin is often perceived as dysfunctional, but economic data and S-Bahn punctuality partially refute this.
  • As the city grows economically, deep-rooted residents' gripes and a complex political history shape the picture.

AI-generated summary

Why It Matters

Berlin has had an eventful political history since reunification, marked by debt crises in the 1990s and a strong economic upswing in recent years.

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Of course, good news doesn't deserve special attention. Sometimes it still helps to point it out. For years it was said that in the supposedly dysfunctional German capital you couldn't even renew an identity card. That's long gone. Today the appointments at the Citizens' Office are available from one day to the next, but they somehow got lost in the excitement about a tennis-playing mayor. These appointments have always been met on time, even at the supposedly worst times. Nobody here has had to sit on hard chairs in the waiting area like in some places in the province for decades.

The local media has just recently become upset about another luxury problem. The Berlin S-Bahn has to pay back a lot of money to the transport association because last year six percent of the trains were canceled and six percent were late. What was lost sight of: These are pretty much the lowest values ​​nationwide. In Frankfurt or Munich the train is twice as likely to be late. And that, even though only six minutes of delay count there and not four like in Berlin. A few years ago there was a big scandal because the capital's S-Bahn allegedly no longer worked at all. Translated into understandable German, that meant: Conditions prevailed that are common in other German metropolitan areas year in and year out.

These are just two examples of many. They provide an indication of how derailed the debate has become, both inside and outside the city. Complaining has always been one of the capital's residents' favorite pastimes - this was already the case during the city's rapid growth in the last century - and it affects locals and newcomers alike. 54 percent of the residents were not born in Berlin, meaning they immigrated from Reutlingen or Damascus at some point. Nobody forced them to settle here of all places. Nevertheless, they complain a lot, the Reutlingers probably more than the Damascenes.

The complaining was recently expressed in the election results. The CDU and SPD, which have recently governed the city quite decently beyond the tennis court, lost a combined 15.7 percentage points. The discontent was concentrated in votes for the Left Party, whose result more than doubled to 25.7 percent, a revival that, as elsewhere in Germany, can also be attributed to the incumbent Chancellor.

His daring decision to dare to vote together with the AfD shortly before the most recent federal election helped the ailing Left Party gain new momentum as the spearhead of anti-fascism. Merz's well-intentioned announcement that he wanted to ban the possible expropriation of housing companies by federal law mobilized additional protest votes and at the same time removed a possible obstacle for the Red-Green-Red: If the sinfully expensive expropriation of the Vonovia Group is not possible anyway, the SPD and the Greens no longer need to argue about it with the Left.

It is almost forgotten how resistant the capital remains to the far right on this side of the eastern outskirts. The AfD received a total of 16.3 percent, just 2.1 points more than its best result to date from 2016, which, however, fell at the time of the refugee debate. The party is making progress as slowly as here in hardly any other federal state.

This may also be because the city is doing well economically. A comparatively moderate Corona slump of minus 2.3 percent of economic output was followed by growth rates of 4.2 and 5.2 percent. Even after that, the city-state's economy was always positive by 0.8 to 1.5 percent. The paralyzing stagnation that is being complained about for Germany as a whole simply does not exist in the capital.

Of course, Berlin wouldn't be Berlin if it wasn't immediately turned into a new problem. The city is “rich, but no longer sexy,” it is now said, alluding to a saying by the former governing mayor Klaus Wowereit. The demoscopes from Allensbach recently determined for the F.A.Z. that 46 percent of Germans definitely do not want to live in Berlin - a value that is otherwise only achieved by Frankfurt. A decade ago, 66 percent of those surveyed found the capital to be a “fascinating metropolis,” but recently the figure has fallen to just 31 percent.

For many, this also has to do with rents, a crucial factor in a city where only a good 15 percent of households own their own home. This particularly affects people who do not yet have a fixed tenancy agreement, especially those younger people who therefore voted in large numbers for the Left Party. On the other hand, the average Berlin average for existing rents is a bearable eight euros per square meter. Vonovia, which is so fond of demonizing, only takes slightly more than urban companies. The asking rents were recently a steep 16 euros, but this is still around a third below the Munich level.

Maybe it's also because Munich has a particularly negative view of Berlin. In any case, as a precautionary measure, the Bavarian Prime Minister threatened to withdraw money from the state financial equalization scheme from a possible left-wing coalition. Quite apart from the fact that this is likely to be legally difficult: there have been no shortage of allegations in the past that the hard-earned money from the provinces is being wasted in the capital.

It is difficult to understand that a country like Berlin, which is quite wealthy compared to most regional states, receives so much money from the financial equalization system, at almost four billion euros a year, even slightly more than Saxony, which is about the same size but much poorer. This has to do with a phenomenon called “resident refinement,” from which Hamburg and Bremen also benefit: the city states are given priority in financial equalization because they provide services for their surrounding areas.

For example, the state of Brandenburg cannot afford a single university hospital because it can send its citizens to Berlin for complicated treatments. Culture was also severely discounted in places close to the capital, such as Potsdam and Frankfurt an der Oder, with the suggestion that everything was available in the nearby city-state. A state theater with a wide range of offerings can only be found in the far away town of Cottbus.

And the days when Berlin's state politicians threw money around are long gone. They date from the term of office of the Christian Democratic mayor Eberhard Diepgen, who did not accept the new reality after the abolition of Berlin subsidies in the 1990s and wanted to keep voters in line with an irresponsible debt policy. During his second term in office, the state of Berlin's debt quadrupled from a good ten billion euros in 1991 to almost 40 billion euros in 2001.

Diepgen did everything he could to torpedo the austerity efforts of his Social Democratic Finance Senator Annette Fugmann-Heesing and her CDU successor Peter Kurth, who has now drifted to the far right. He agreed an expensive pact to secure employment with the dysfunctional city cleaning companies (more on that later) without even informing the responsible department head.

The turning point came when SPD Mayor Wowereit and his red-red coalition took office. During this time, Finance Senator Thilo Sarrazin was not the only one who earned merit before he went on to suggest a connection between social benefits and heredity. Wowereit's deputy Harald Wolf from the then PDS also went along. The West German ex-Green remembered from his Marx studies in his early years that prosperity must first be achieved.

“We can't make a living by filming each other,” Wolf said at the time, which is why he preferred to court companies like the train manufacturer Bombardier rather than just the creative industries, which were so highly valued at the time. Above all, he bravely supported the austerity policy. The number of employees in the state of Berlin fell from just under 222,000 in 2001 to a good 186,000 in 2011, initially with the prospect of a shrinking city in mind. And, above all, the city-state sold most of its housing stock during this time. You don't have to be a psychologist to explain the expropriation fury of today's Left Party with the desire to forget the policies of its predecessor from that time.

The PDS, which mutated from a good East German regional party into a pan-German party in 2007 under the guidance of Oskar Lafontaine, was hit hard by this pragmatism: it shrank from 22.6 percent in 2001 to 11.7 percent in the 2011 election. The CDU, which now replaced the post-communists as Wowereit's junior partner, learned its lessons from this. The new red-black Senate focused on expansion in the city that was growing again. It was adjusted as best it could, through all subsequent changes in government. Most recently, the state of Berlin employed a good 234,000 people, more than ever before in the 21st century.

The successful renovator Wowereit ultimately resigned because of an airport project that any other German regional politician would have easily sat out. Despite all the delays, only 14 years passed between the start of construction on BER Airport in 2006 and its delayed commissioning in 2020. In Munich it took four years longer from the location decision in 1974 to the opening in 1992, and the city of Cologne only managed to renovate one opera house in the same time. In this context, we don't even want to talk about Stuttgart train station projects, Munich main lines, Frankfurt subways, Hamburg concert halls or Cologne city railways.

Sometimes the city goes overboard with laissez-faire, for example when entire streets are closed for every profit-oriented event, and for every construction project anyway. Or if it consistently leaves the snow clearing on the sidewalks to the homeowners, as the legal situation states, but never controls the execution - and also does not send out the city cleaning service.

Which brings us to the one concern that can actually be proven empirically. It's about garbage. This doesn't just have to do with the fact that disposing of the old sofa on the sidewalk has recently been glossed over as a “sharing economy”; It could be that someone still needs the slowly rotting piece of furniture. Responsibility also lies with a city cleaning company that, although it is very good at quick advertising slogans, is completely overwhelmed by the task of cleaning the city. Anyone who observes the employees occasionally picking up scraps of paper from the sidewalk with their pikes can only feel pity in view of the technological backwardness. This is some of the really bad news that is almost lost in the loud, constant complaining.

Open Questions

  • ?How will rent policy affect the housing market in the long term?
  • ?Can city cleaning improve its efficiency?

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This article was originally published by FAZ.

Quick Look

  • Berlin is often perceived as dysfunctional, but economic data and S-Bahn punctuality partially refute this.
  • As the city grows economically, deep-rooted residents' gripes and a complex political history shape the picture.

AI-generated summary

Story signals

News tone
Neutral
Emotional intensity
Medium
News value
Moderate
Global impact
National
Follow-up likelihood
Possible
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FAZ
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Published
1 hour ago
View original
Berlin
economy
politics
Berlin
Klaus Wowereit
Eberhard Diepgen
Harald Wolf
Thilo Sarrazin
CDU
SPD
Left Party
AfD
Munich
Frankfurt
Brandenburg
economy
politics
S-Bahn
rent
financial equalization

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