Berlin floundered economically also because reunification did not bring an end to some of the bad fiscal and administrative habits nourished during the division. The municipal bureaucracy, which had long been bloated in both east and west, did not trim down, at least in the first years after unification. True, some eastern officials with tainted political pasts were forced out (more on this later), but overall the merger of the two bureaucracies exacerbated problems of overstaffing. As in the past, officials who themselves ate copiously at the government trough spent lavishly on municipal amenities. Berlin was the only city in the world to have three major opera companies, three huge public universities, four symphony orchestras, and two city-run zoos. This would have been hard enough to fund even if generous subsidies continued to flow from the central governmental faucet, but—despite the best efforts of Diepgen—the subsidies from Bonn were scheduled to be phased out beginning in 1993.
There were problems on the private-sector front as well. Companies based in West Berlin, which had also been on the receiving end of generous federal subsidies, often failed to prepare adequately for the loss of that advantage. Moreover, with the collapse of the Soviet economic system in the early 1990s, West German firms with branches in Berlin found it expedient to move operations from there to places like Hungary and Czechoslovakia, where labor costs were lower and environmental regulations less stringent. After 1993 a substantial number of firms went out of business or left the city. The result was that the economy of western Berlin began to shrink within three years of unification, while unemployment and public indebtedness shot up. By 1996 the situation had deteriorated to the point that a new city treasurer, brought in from Hesse to help clean up the city’s finances, ordered drastic cuts. To cope with an expected deficit of DM 32 billion over the next four years, she called for a hiring freeze, reductions in university staffing, and the scrapping of plans for a new east-west subway line.
A prominent early casualty of reunited Berlin’s rapid transition from bloom to gloom was the lavishly renovated Friedrichstrasse, which, along with the Potsdamer Platz and the area around Checkpoint Charlie, constituted the most ambitious commercial redevelopment in the new Berlin. In 1994 great hopes attended the cornerstone-laying of the new complex, which was designed to house high-rent stores and offices. Mayor Diepgen was on hand to tout the “living big-city atmosphere” of the Spree metropolis. Representatives of the Societè Générale d’Enterprises, a French building concern that was backing the project, smiled broadly. And why not? Galeries Lafayette was building an 8,000-square-meter store, and this was just one of seventeen enterprises scheduled to open in the complex. Yet there were very good reasons for worry. Rents in the western part of the city were steadily dropping because the supply of retail and office space already exceeded demand. Some 25,000 square meters stood empty in the west as the project was launched. Could all this come to “a great crash?” asked Munich’s Süddeutsche Zeitung, with undisguised schadenfreude. Two years later, when Galeries Lafayette opened its doors, there was indeed little to smile about. The floors were full of beautiful things but virtually devoid of customers. Other new enterprises on the street also lacked for trade. Their owners’ only consolation, if one could call it that, was that things were bad all over the city. In 1995, according to a local trade group, Berlin’s retailers experienced “one of the worst years since the war.” Even the world-renowned KaDeWe, that mecca of consumerism in western Berlin, saw its sales drop 10 percent from their peak in 1992.
More important than Berlin’s economic trials was its difficulty in living up to its promise as “workshop of unification.” True, it certainly looked’like a workshop. The town, especially its eastern part, crawled with bulldozers and road graders. A forest of cranes towered over Potsdamer Platz, once Europe’s busiest square and now its largest construction site. (One of the Potsdamer Platz cranes, incidentally, had a bungee cord attached to it; for a mere one hundred marks one could take the plunge.) All the efforts to rejoin streets, reconnect utilities, and transform the east into a shining replica of the west, however, did little to pull the city together politically or socially. With the Berlin Wall now just a memory, the much-discussed “Wall in the Head” seemed to have become an even more formidable barrier to mutual understanding. Years earlier, Peter Schneider had heard a member of West Germany’s mission in East Berlin muse: “Sometimes I think the Wall is the only thing that still keeps us Germans together.” Now that the Wall was down, it was apparent that the man had a point.
The euphoria that accompanied the fall of the Wall, when thousands of easterners had swarmed into the west to be greeted with hugs and “welcome money,” was more or less gone after two or three years of unification. During that short period West and East Germans discovered that the long years of separation had yielded different ways of thinking and acting. Mutually disillusioned, they began trafficking in negative stereotypes. Wessis, resenting the huge transfer payments from west to east (some DM 150 million per year), and the higher taxes these necessitated, decried the Ossis as dependent, shiftless, backward, and ungrateful. Earlier, West Germans had harbored a negative image of the GDR state but not of the people; now the people themselves were seen to be the problem. Ossis, for their part, found their western countrymen boastful, aggressive, and insensitive to the special problems they faced. They complained that the Wessis failed to acknowledge that the East had suffered much more than the West as a result of the settlement following World War II. In their eyes, the westerners were all too inclined to confuse the luck of political geography with talent and initiative.
In Berlin, the Wall in the Head was evident in a falling-off of movement between east and west. Rather than streaming to the west to shop, as they had in the immediate post-Wall era, East Berliners stayed home and even began buying eastern-made products again, which they now professed to find preferable to western goods. In 1993 only 9.3 percent of East Berliners said that they would live in West Berlin if given the chance; 7 percent of the West Berliners said they would go east. In the same year, a study of Berlin’s youth scene revealed that contacts between eastern and western young people had not increased since 1990. Now, Ossis who drove their sputtering Trabis into western Berlin got hostile stares, or perhaps dog feces smeared on their windows. Rather than gifts of bananas, they got banana jokes, such as: “How do we know that Ossis are descended from apes? From all the bananas they eat.” The easterners vented their indignation and humiliation in anti-western tabloids like SuperIllu and in a special rage hotline, Wut-Telefon. Following reports that western Berlin plasma banks were offering trifling sums for Ossi blood, the alternative newspaper taz ran the headline: “Western Vampires Suck East German Blood.” Some easterners wore T-shirts that said, “I Want My Wall Back!” Tellingly, these shirts also sold well in the West.