Berlin 'raped' by developers

Imre Karacs on the Bollinger and bitterness served up at the opening of a temple to commerce

"WILKOMMEN, Bienvenue and Welcome," beckoned the banner strung across the shimmering facade of Berlin's new temple of commerce. The neon lights tried to match the mood by flashing out a similarly enthusiastic, if slightly less sanguine, message: "Shops and offices to let".

It was the only chink of realism allowed amid the hype which surrounded Thursday's opening of the Parisian department store Galeries Lafayette in the former capital of the GDR. Hundreds of police, many masquerading as scruffy lefties, had ringed the building, with orders to keep troublemakers out. The Alternatives, a loose band of anarchists and squatters who fancy themselves as the vanguard of the proletariat, had threatened to ruin the party by throwing bricks through the glass, reducing it "to a pile of shards".

To the Left, the new development on reunited Friedrichstrasse, known as the "Golden Mile" in the Roaring Twenties, embodies all the callous commercialism that has marked the reconstruction of Germany's slumbering capital. Low-rent housing, one of the few achievements of the communist regime, is being bulldozed, office blocks and shops for the mega-rich are sprouting in its place. As the government of the Federal Republic prepares to move in, the heart of old East Berlin is being ripped out. To make way for the latest postmodern wonder, the architects tore down an unfinished East German apartment block. East Berliners of old, many already marginalised in society by the collapse of local factories, fear being pushed to the fringes of the city as well.

"This used to be a place where people lived," laments Ann, an unemployed 29 year old watching the siege from the pockmarked Democracy House across the street. It belongs to Neues Forum, the group of dissidents who organised the massive street protests in 1989 which badgered the communists into submission. Neues Forum dreamed of a "third way" between communism and capitalism, a vision that has since become as faded in local politics as the organisation itself. Now its headquarters serve as the centre of resistance to the new rulers, denouncing the "Rape of Berlin" from a banner lowered from a third-floor window. There were no bricks in sight, however. "They would only bounce off the glass," said Ann, with the confidence of somebody who has already tried.

"The whole city is being turned into a copy of Manhattan, or London's Docklands," says Kris, another young denizen of Demo- cracy House. "But it won't work here in Berlin. It won't fit into the landscape."

His pessimism is not shared by the city fathers, who entertained 2,000 guests with lobster and champagne on the eve of the grand opening. "Friedrichstrasse will very soon become Berlin's emblem, to rival New York's Fifth Avenue and London's Bond Street," boasted Eberhard Diepgen, the city's conservative mayor. The DM1.4bn (pounds 620m) Fried- richstadt development, home to Galeries Lafayette and all those empty shops, is the first of five projects under construction along the street, once severed by Checkpoint Charlie. There will be more boutiques and offices, but cheap apartments are not planned.

The local government argues that commerce will generate wealth, pumping western prosperity into the east, and creating jobs in an area where unemployment is above 20 per cent. But the locals retort that the shops are only bringing low-paid part-time jobs; short-term contracts in a union-free environment.

Meanwhile, as the area is transformed into the "workshop of German unity" in Mr Diepgen's words, the fur-coated customers of its glittering shops must put up with a few inconveniences. The street is one large building site, its crown jewel reachable from the S-bahn station only through an obstacle course of wooden planks laid among the scaffolding. Still, the shoppers came on opening day, milling around inside the futuristic glass cone in their thousands, beholding the miracle before their eyes: the price tags. A glass of Bollinger could be had for DM11 in the food hall, a blouse from one of the big Paris fashion houses for DM80. Money did not change hands, the spectacle was free.

Whether gawping alone can sustain a boom is a question which divides not only Berlin's politicians, but also its economists. Like Docklands, the Friedrichstrasse development was not meant to be profitable from the outset. The most optimistic calculations do not forecast a return on investment for at least four years. "By the turn of the century the street will be a winner," predicted one upbeat analyst. Thousands of civil servants are due to be moved from Bonn by 1999, their buying power boosted by generous relocation grants. When they arrive, Friedrichstrasse will once again be paved with gold, argue bullish investors.

Others are not so sure. Beside the unpredictability of affluent Berliners, who might decide to stick to the stores on the Ku'damm in the west, there is growing uncertainty about the government's move to the capital. The Maculan building firm, responsible for some of the biggest projects in the government quarter, is on the verge of bankruptcy, threatening to delay the big move.

In the meantime, there is an unexpected recession to contend with, eating into retail profit margins and public budgets. Some new shops have already been forced out of business, including the French book store opened not so long ago with as much fanfare as the Galeries Lafayette.