Rebranding Berlin

In search of the 1920s
Jul 19th 2007 | BERLIN
From The Economist print edition

A capital that is short of prosperous people


TO ANYONE driving through Berlin's empty streets, this capital of 3.4m seems a backwater. Klaus Wowereit, its Social Democratic mayor, wants to improve Berlin's “poor but sexy” image. On the back of last year's World Cup, he would like to promote it as a glamorous metropolis reminiscent of its 1920s heyday. Armed with a two-year €10m ($14m) budget from Berlin's Senate, Mr Wowereit has duly launched his “City of Change” campaign.

Selling Berlin as a world city is hard. It has lots of renovated museums, theatres and clubs, plus 400 contemporary-art galleries. Artists, film-makers and some politicians have revived its big-city feel. But whereas London and Paris boast plenty of rich people, Berlin does not. One in two live on a pension or unemployment benefit; even those with jobs earn an average of only €32,600 a year. Well-heeled Germans pay the odd visit, but prefer to live in more opulent places like Munich or Hamburg. Berlin is also saddled with €61 billion of debt.

As the largest industrial city in Europe in the early 1900s, Berlin bustled with bankers, entrepreneurs, scientists and inventors. It played host to the invention of nylon, nuclear fission and talking films. Reduced to rubble in 1945, the city was rebuilt and then rebuilt again after unification in 1990. But most industries have long gone. The city lost two-thirds of its remaining manufacturing jobs when cold-war subsidies that propped up both sides ended. The economy is now largely service-based.

Like the Big Apple campaign that helped to revive bankrupt New York in the 1970s, Mr Wowereit's initiative, co-ordinated by Berlin Partner, the city's business-development and marketing office, will be aimed at business, investors and tourists. The hope is to capitalise on small signs of renewed confidence shown by economic growth of 1.9% in 2006 (although that is well below the overall German figure of 2.8%).

Cheap and easy to get around, Berlin offers rich pickings for foreigners who snap up residential and commercial property. It had 7m visitors last year, making it third in Europe after London and Paris. A delayed €2 billion project to expand Schönefeld airport for wide-bodied jets will be ready by 2011. At least Berlin will have a world-class airport.