Berlin Is Cheap

In Paris, laid-off factory workers have taken to kidnapping their bosses. London riots in early April left one man dead outside the Bank of England. In laid-back Berlin, the global economic crisis has, so far, been just another reason to party. On May 1, the International Workers' Day holiday that brings anticapitalist street fights to Europe's capitals, the Berlin air smelled not of burning tires but of fresh-grilled kebabs and cannabis, whose use the city's courts stopped prosecuting in the 1990s. A multicultural street fair in the heavily immigrant Kreuzberg district has long replaced the traditional riots with musical attractions such as Turkish-German rap stars and three bands billed as "trash metal gore." The protest was best summed up by a guy holding a placard that read ARBEIT NERVT—work sucks.

It's not just Berlin's protest crowd that couldn't care less about the worst global downturn in 70 years. As the days get longer and temperatures warmer, Berliners do as they always do: sit back and relax. The countless sidewalk cafés, beer gardens and open-air restaurants seem fuller and more mellow than ever. Conversation about the crisis, if it happens at all, inevitably makes it sound as if the world's money troubles were happening on another planet. "For Berliners," says Daniel Fischer, a bank executive who commutes between home in Berlin and a job in Zurich, "the financial crisis is just a rumor."

Berlin's dirty little secret: despite its role as the capital of Europe's most powerful country, the city itself is so removed from the global economy—it doesn't even have a major international airport—and so used to crises and recessions that there is too little business activity to implode. With 21 percent of Berliners on welfare and a per capita GDP half that of Detroit or Birmingham, Ala., Berliners long ago learned to make do with less. And most of them seem to like it that way. A few years back, they were thrilled when their popular, partygoing mayor, Klaus Wowereit, dubbed the city "poor but sexy."

Despite running up $80 billion in public debt—more than that of Peru, Ecuador and Guatemala combined—the city still funds the world's most lavish collection of cultural venues, including 3 opera houses, 8 symphony orchestras and 150 theaters. In choice downtown neigh-borhoods, empty storefronts lacking -better-paying tenants have been taken over by artists, galleries and impromptu "guerrilla" fashion boutiques. The students, artists and creative types that give the city its edgy buzz and 24/7 culture scene—which in turn attracts a steady influx of more of the same—are there precisely because they have been priced out of more economically successful cities like New York. The city's poor prospects carry within them the seeds of revival. Berlin has become a haven for entrepreneurs in media, film and fashion, who can take risks on edgy projects thanks to the ridiculously low startup costs. Could the downturn take a chink out of Berlin? Of course, though it may not hurt all that much. After all, Berliners have been through far worse.

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