Berlin Wall

While in Berlin we were almost afraid to get near the wall, it seemed sosurreal to us. Of course I was quite young then and found Berlin utterly depressing. Not a place I would have liked to live.

Three years ago, we visited again - what a change!! Berlin is very green and has within the city many parks and the eastern parts of Berlin were and are still renovated to match the rest of Berlin.

When Germany reunified it was agreed the East German mark should be convertible one-for-one with the West German mark. The Bundesbank opposed this, arguing that a more appropriate rate would be two-for-one, recognising the much lower productivity of the East. Politics prevailed. The resulting surge in unemployment from a non-competitive exchange rate had to be offset by massive subsidies from the West. Add in the investment needed to bring crumbling infrastructure to West German standards and the annual transfer at some points reached about 8 per cent of GDP.

Thanks to the generosity of West German taxpayers, the gap has been narrowed. Infrastructure in the East is now pristine, yet it remains poorer and westward migration continues. In Berlin the gap is less obvious, as it was before the Wall fell. That is partly because the grander bits of the city happened to be in the East, partly because cheap rents in the East have supported a vibrant artistic community – hence the Berlin tag "poor but sexy". Elsewhere the fissures are still evident. It seems to take more than a generation to reverse communism's economic damage, even with an almost unimaginable transfer of wealth.

From November 10 onwards, all GDR-citizens could travel freely. Which they did: some visiting relatives and friends in the West, other just driving westward for a day.

Yeah, but the faces we can see are smiling.