Some are doing well

Placeholder for expensive apartments. The art house “Tacheles” in Berlin-Mitte was occupied in 1990 in 1995

It is probably the best-known claim in German city marketing: in 2003, the then governing mayor of Berlin, Klaus Wowereit (SPD), described the capital as “poor but sexy”. In fact, the city was suffering economically. The GDR's accession to the Federal Republic of Germany in 1990 had a doubly negative impact on Berlin: in the eastern part, the GDR's industry collapsed because it was no longer competitive after the monetary union and the loss of markets in Eastern Europe. And the western part lost the subsidies that it had received as an exclave of the West.

The result was high unemployment (in 2003 it was 18.7 percent), a temporarily shrinking population (it was only in 2011 that the population of 3.5 million exceeded the 1993 level) and increasing debt. In addition, a banking scandal shook the city in 2001. High-ranking politicians from the Berlin CDU had formed a conglomerate of various banks, including the Landesbank Berlin, which was active in risky financial and real estate transactions. The result was billions of euros in debt that remained with the state of Berlin.

The collapse of industry, vacant real estate and low rents created spaces for subcultures in Berlin, some of which could be commercialized for the creative industries.

But the crisis also opened up opportunities. The collapse of industry, vacant properties and low rents created spaces for subcultures. These made the city interesting for tourism and could partly be commercialized for the creative industries. Wowereit alluded to this situation with his remark. Outside of Berlin, especially in southwest Germany, this created an image of the city in which Berlin was more likely to party than work, at the expense of southwest German taxpayers.

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