Commentary: Berlin's Chaotic Allure

By Jack Ewing

Munich is overpriced, Frankfurt is straitlaced, and Stuttgart is provincial. Berlin, Germany's capital again after half a century, is wide open--a city where the newly elected mayor's homosexuality is a non-issue and thousands of teenagers dance half-naked through the streets during the annual Love Parade. Berlin is to Germany what New York is to the U.S.--a creative cauldron that sometimes offends but provides a crucial antidote to conformity.

Germans need to learn from Berlin's chaos. The city's appeal to young people, and its relatively cheap rents have made it one of Germany's startup capitals. More than 900 Berlin companies received venture capital in 2000, a number exceeded only by the state of Bavaria, which is much larger. The city is a magnet for creative people around Europe, such as Austrian-born fashion designer Elisabeth Prantner, alias Lisa D., who sells her offbeat women's wear from a shop near the city center. "I'd never get anything like this in Vienna," she says of her space in the Hackescher Markt, a shopping complex. "And I can't imagine that the people there would appreciate my stuff."

DISASTER. Not just the counterculture is drawn to Berlin. When former U.S. Ambassador to Germany John C. Kornblum became chairman of the German unit of Lazard Frères, the investment bank put him in an office across a public square from Berlin's Brandenburg Gate. Why there instead of the financial center of Frankfurt? "Berlin is rapidly becoming the meeting place of the elite," says Kornblum, ticking off the benefit galas, openings, and parties on his social calendar.

The funny thing is that by most conventional measures, Berlin is a disaster. Twelve years after the fall of the Wall reunited the city, the local government is hopelessly in debt. The city's flagship bank, Bankgesellschaft Berlin, is fighting to survive after writing billions in bad loans. In October elections, the formerly communist Democratic Socialist Party won nearly as many votes as the conservative Christian Democratic Union--evidence that there's still plenty of nostalgia for East Germany. Meanwhile, just one member of Germany's benchmark DAX stock index, drugmaker Schering (SHR ) , is based in Berlin.

But big corporations are now feeling the pull of Berlin. Media giant Bertelsmann, for example, is reconstructing a palace on Unter den Linden. And Berlin is helping to shake up the economic status quo. Its shopkeepers have banded together to defy Germany's arcane restrictions on shopping hours, which force stores to close most nights at 8 p.m. On some nights, Berlin retailers have stayed open until 1 a.m., helping to provoke a nationwide debate about the restrictions.

For all its problems, Berlin is the only German city that offers grandeur on a par with Paris, London, or Rome. Unlike the other great capitals, it is an unfinished symphony. The notes are sometimes sour. But in a country that prizes stability a bit too much, a little discord is a good thing.

Bureau chief Ewing lives in Frankfurt but loves Berlin.

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