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Who is at fault for Berlin's poverty, crime and debt?
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Who is at fault for Berlin's poverty, crime and debt?

The Local · 14 Sep 2016, 15:24

Published: 14 Sep 2016 15:24 GMT+02:00
Updated: 14 Sep 2016 15:24 GMT+02:00

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In the week leading up to state elections in Berlin, the capital was garlanded with yet another trendy accolade, being named the 'second most liveable city in the world' by New York-based Metropolis magazine.

But points won for up-cycling disused breweries into working spaces for techies and "creatives" suggest the magazine didn't have your average Berliner in mind when it cooked up its rankings.

Berlin's reputation in Germany - where one national newspaper dubbed it "the failed city" - is less glamorous.

Pick out some of the more startling recent headlines - almost half of all single parents live in poverty, one in ten working-age adults has no job, the city is saddled with almost €60 billion in public debt - and it becomes clear why.

'Capital of child poverty'

"It's not acceptable that we remain the capital of child poverty and long-term unemployment any longer," Bettina Jarasch, the Green Party's leader in Berlin told The Local.

The fact that so many single parents are living in poverty is “shameful”, she said.

For Jarasch, blame clearly falls with the Social Democrats (SPD), who have ruled the city as the largest party in three coalitions since 2001.

"A party that has been in power for decades can't say that it has nothing to do with the city's problems."

"Fifteen years ago the SPD decided to cut costs massively. That wasn't the wrong decision at the time, but they decided way too late to change course and start re-investing."

Klaus Lederer, leader of Die Linke (Left Party) in Berlin agrees that austerity has taken an unnecessary toll on social projects.

"There is so much that the [Berlin] Senate hasn't done in the last five years. It should have been investing in schools, social infrastructure and in housing rather than trying to reduce debt," he said in comments emailed to The Local.

Down south in Munich - the proud conservative powerhouse of the German economy - an expert also told us that the SPD has shirked its duties in Berlin.

Dr. Gerhard Hirscher, a political researcher at the conservative Hanns Seidel Foundation tells The Local that Berlin has continued to receive money from other parts of the country.

"If you’ve been the ruling party for such a long time, you’ve got responsibility. Of course Berlin had financial burdens following reunification, but it also profited from Germany’s state fiscal equalisation scheme."

The state fiscal equalisation scheme compensates for financial inequality between states, and in 2015 Berlin was the largest recipient, taking €3.6 billion from wealthier parts of the country.

Hirscher also argues that becoming the German capital (Berlin fully took over from Bonn in 1999) has created the tax base for a wealthy government.

“In the past few years, companies, ministries and organizational offices have been moved to Berlin. These are well-paid jobs and the people who do them live in Berlin and pay taxes there. That has a positive economic effect.”

Condemned by history

But the SPD and their supporters argue that only talking about the city's current problems makes light of the deep scars left by a half century of war and division - with the city first bombed to the floor in 1945 and then forcefully divided throughout the Cold War.

“The main cause of poverty in Berlin is structural,” argued Dr. Bernhard Weßels, a research fellow at the Berlin Social Science Center (WZB).

“Before reunification, [West] Berlin received a support subsidy. When that was abolished Berlin lost eight percent of its income - that’s a huge amount,” Weßels said.

“A further problem was the de-industrialization in the East. When the Soviet Union collapsed, much of the industry they had established in East Berlin collapsed. That resulted in a high level of joblessness that came overnight.”

A result is that Berlin remained unattractive for the type of people who have money: the middle-aged and the middle class.

“One problem is demographics. We have a lot of old and young people here - neither of these two groups has money.”

But the situation has slowly been improving under the SPD despite these problems, Weßels says.

“Will Berlin ever be a rich though? That is an open question, as it relies heavily on its public sector. In Munich, on the other hand, you have a rich middle class and lots of small- and medium-sized entrepreneurs. Those are the ones who bring in the money.”

Turning a corner?

That things are finally starting to look up is a point of view the SPD are also eager to emphasize.

“This year, for the third year running, Berlin’s economy has grown more than the German economy overall,” SPD-Berlin’s regional manager Dennis Buchner told the Local.

The capital’s debt has dropped below €60 billion for the first time since 2009, with over €3 billion of old debts being paid back in this electoral term alone, he said.

“In recent years, we have used half of our budget surplus for debt repayment. We’ve used the other half to invest in the growing city.”

Story continues below…

He also argues that one shouldn't just look at the high unemployment rate in the city, but see where it has come from. 

“The number of people in employment has been increasing faster than the national average for years, so having had relatively high unemployment levels, Berlin’s unemployment is gradually decreasing. That is also a success of the SPD policies in recent years,” he says.

Moreover, “55,000 jobs have been created over the past year. Every year we build infrastructure for 40,000 new Berliners,” Berlin’s current mayor Michael Müller (SPD) also emphasized in a recent interview with Die Welt.

What do Berliners think?

If polling in the build up to Sunday's election is to believed, the Berlin public is starting to fall out of love with the Social Democrats - although as this follows a nationwide pattern, national issues like the refugee crisis likely also play a role.

While the SPD won over 28 percent of the vote in the last election in 2011, a poll by broadcaster ARD last week put them at 21 percent, their lowest popularity in a decade.

Nonetheless, they should still scrape through as the largest single party. In a very tight race, Angela Merkel's conservative CDU are polling in second with 19 percent, while the Greens are on 16 percent and Die Linke and the far-right AfD are both on 15 percent.

That would mean, though, a significant loss in power for the SPD, who would have to build a coalition with two other parties in order to achieve a majority.

SEE ALSO: 6 reasons why Berlin is known as a 'failed city'

By Max Bringmann, Jörg Luyken and Verity Middleton

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The Local (news@thelocal.de)

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