Following the division of the city of Berlin in 1949, the economies of the two halves of the city were integrated into their respective municipal and national economic systems.
Although East Berlin constitutes only a third of the unified city and its population, it became the hub of East Germany’s commercial, financial, and transportation systems, and a huge manufacturing center.
Much of Berlin’s industrial capacity was destroyed during and after World War II, and the economy of West Berlin suffered again during 1948 and 1949, when the USSR blockaded West Berlin in an attempt to drive out the Western powers.
Beginning in the 1950s, however, West Berlin’s economy was revitalized with a great deal of assistance from West Germany and from the United States, which provided support under the European Recovery Program (Marshall Plan).
The city eventually became an important manufacturing center, producing electrical and electronic equipment and substantial quantities of machinery, metal, textiles, clothing, chemicals, printed materials, and processed food. The city also developed as a center for international finance, research, and science.
With the collapse of the Berlin Wall in 1989, the two halves of the city were once again physically integrated. Their economic integration began in July 1990.
Of the two sections of the city, East Berlin underwent a greater economic upheaval, with many formerly state-owned businesses becoming private. United Berlin plays a significant role in international commerce.
In 1995 the city exported and imported 8 million metric tons of goods.
Since reunification, Berlin has been forced to deal with housing shortages, growing unemployment, and strikes and demonstrations by workers.
Increased taxes, reduced government subsidies, and cuts in social services resulted as the German government faced the cost of revamping East Germany’s economic system from a state-controlled to a free-market system. Despite these obstacles new businesses were thriving within a few years after reunification.
After reunification, the German government decided to gradually move the federal government to Berlin from Bonn, which was the capital of West Germany, although eight federal ministries remain in Bonn. This decision to move most government offices back to Berlin precipitated a building boom in the city. It has also put severe financial pressure on the federal government due to the cost of constructing new government facilities and of transferring government offices from the former West German capital.
Although the city is 177 km (110 miles) from the coast, river dredging, which began in the late 1700s, and the construction of an inland port provide the city with easy access to the Baltic Sea. The city has 74 km (46 mi) of natural rivers and 72 km (45 mi) of canals.
The East German government completed a ring highway around the entire city in 1979. The central railroad hub is located at Central Station in eastern Berlin.
( The S- Bahn )
The S-Bahn, a suburban railroad, connects the suburbs with the central city. To facilitate trade and the movement of people, Berlin has constructed an efficient integrated system of subways, elevated train lines, buses, and trams.
Berlin has three international airports, one at Tegel in the northwest of the city, another at Tempelhof south of the center (and famed for its role during the Berlin blockade that began in 1948), and yet another at Schönefeld in the south and east beyond Berlin’s city limits.
Although East Berlin constitutes only a third of the unified city and its population, it became the hub of East Germany’s commercial, financial, and transportation systems, and a huge manufacturing center.
Much of Berlin’s industrial capacity was destroyed during and after World War II, and the economy of West Berlin suffered again during 1948 and 1949, when the USSR blockaded West Berlin in an attempt to drive out the Western powers.
Beginning in the 1950s, however, West Berlin’s economy was revitalized with a great deal of assistance from West Germany and from the United States, which provided support under the European Recovery Program (Marshall Plan).
The city eventually became an important manufacturing center, producing electrical and electronic equipment and substantial quantities of machinery, metal, textiles, clothing, chemicals, printed materials, and processed food. The city also developed as a center for international finance, research, and science.
With the collapse of the Berlin Wall in 1989, the two halves of the city were once again physically integrated. Their economic integration began in July 1990.
Of the two sections of the city, East Berlin underwent a greater economic upheaval, with many formerly state-owned businesses becoming private. United Berlin plays a significant role in international commerce.
In 1995 the city exported and imported 8 million metric tons of goods.
Since reunification, Berlin has been forced to deal with housing shortages, growing unemployment, and strikes and demonstrations by workers.
Increased taxes, reduced government subsidies, and cuts in social services resulted as the German government faced the cost of revamping East Germany’s economic system from a state-controlled to a free-market system. Despite these obstacles new businesses were thriving within a few years after reunification.
After reunification, the German government decided to gradually move the federal government to Berlin from Bonn, which was the capital of West Germany, although eight federal ministries remain in Bonn. This decision to move most government offices back to Berlin precipitated a building boom in the city. It has also put severe financial pressure on the federal government due to the cost of constructing new government facilities and of transferring government offices from the former West German capital.
Although the city is 177 km (110 miles) from the coast, river dredging, which began in the late 1700s, and the construction of an inland port provide the city with easy access to the Baltic Sea. The city has 74 km (46 mi) of natural rivers and 72 km (45 mi) of canals.
The East German government completed a ring highway around the entire city in 1979. The central railroad hub is located at Central Station in eastern Berlin.
( The S- Bahn )The S-Bahn, a suburban railroad, connects the suburbs with the central city. To facilitate trade and the movement of people, Berlin has constructed an efficient integrated system of subways, elevated train lines, buses, and trams.
Berlin has three international airports, one at Tegel in the northwest of the city, another at Tempelhof south of the center (and famed for its role during the Berlin blockade that began in 1948), and yet another at Schönefeld in the south and east beyond Berlin’s city limits.
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