1 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin and Eastern Europe Economic, Political, and Cultural Effects of Continuous Change ESCP-EAP European Executive MBA, Class of 2006 Berlin, January 25, 2006

2 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin and Eastern Europe: The Economic, Political, and Cultural Effects of Continuous Change I.Facts about EU Eastern Enlargement II.Berlin: City of East and West? III.Outlook

3 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Past Enlargement 1952: F, I, D, B, NL, LUX 1973: GB, IRL, DK 1981: GR 1986: E, P (1990: East Germany) 1995: S, SF, A

4 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe May 1, 2004 Ten New Members: Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Malta, and Cyprus

5 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Surface  34% Population  28% GDP  5% Average GDP per capita  18% EU with 27 Member states One third of the population will live in States with a per capita GDP below 90% of the EU average - compared to 1/6 in the present EU-15

6 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Enlargement and Labour  Labour mobility is one of the Four Freedoms of the EU  However, some restrictions in some Member States  four up to seven years  regional or sectoral limitations possible  After two years, reassessment Spring 2006

7 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Enlargement and Money  Benefits of enlargment largely outweigh (financial) cost  Financial Perspecitve still under discussion  10 new Members need to take on the Euro  Maastricht criteria apply  Slovenia, Estonia, Lithuania ahead (2007?)

8 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe II. Berlin: East meets West? The „Hub“: A failed vision of the 90s Trade and Aid: The city and its neighbours Berlin: A microcosm of Eastern Europe? German unification: Still unfinished business?

9 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin - an East-West hub? „Berlin is in the centre again! The Western part is no longer an unhappy island within the GDR. Berlin has been redeemed from being on the edge of the free Europe. Now, finally, can the united city become the hub of political, cultural, and economic exchange within Europe. “ Eberhard Diepgen, former Berlin Mayor, 20. April 1991

10 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin - no East-West hub A Vision of early and mid-Nineties: Commercial, financial, and educational East-West Centre Competition with Vienna and Budapest and with major cities/regions in Germany But: Low overall export ratio (11%), plus trade deficit with e.g. Poland Berlin share of German exports to CEE fell from 2,28% (1995) to only 1,36 % (2004).

11 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin - no East-West hub Structural problems of the city: large public sector and high unemployment after 40 years of division Little knowledge transfer from academia to business: 4,25% R&D of GDP, but less patent applications (1.345 in 1995, in 2003) „Berlin benefits less from Enlargement than Hamburg, Munich, Ruhr region“ (Berlin Chamber of Commerce, 2004) After 2004 Enlargement, no more „East-West special relations“ needed. Regional approach

12 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin trade - some figures Top 5 Importing countries (2004, mEUR): –USA: –France: –Italy: 477.8, Netherlands: 441.0, Poland: Top 5 Exporting countries (2004, mEUR) –France: –UK: –USA: 759.0, Italy: 702.4, Spain: 646.2

13 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin - Capital of united Germany Since 1949, Berlin has been capital 1991 „capital decision“ 1999: Government moves from Bonn to Berlin

14 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin: „capital city“ of Germany? Bonn: –2nd seat of government ( staff vs in Berlin) –UN city (12 programmes, 500 staff; major conferences) plus Frankfurt (banking, EBC), Stuttgart (car industry), Hamburg (media, port), Munich (TV), Dusseldorf (fashion) etc. one of the few European capitals that is not the country‘s economic centre

15 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin - A Multicultural Capital On 3,3 mio. inhabitants, (or 13,5%) foreigners from 183 countries –only 9 UN Members not represented: Belize, Timor Leste, Kiribati, Marshall-Islands, Mikronesia, Palau, Salomon Islands, Tuvalu, and Nauru – Poles - 1/3 of EU foreigners – Turks - „largest Turkish city“ outside Turkey – Vietnamese, Russians, and US- Americans but less than Hamburg (15%), Cologne (18%), Munich (23%) or Frankfurt (26,5%)

16 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Berlin in comparison More populous (and bigger: 900km2!) than Paris, Warsaw, Budapest, and Prague But: Less students (40 per inhabitants) than Prague (62), Budapest (65), Paris (142) or Warsaw (165)

17 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe III. Outlook - An Attempt The City: Becoming Metropolitan? Germany: Federalism and Reform Europe: Enlargement continues

18 Cornelius Adebahr ESCP-EAP European Executive MBA Berlin, Berlin and Eastern Europe Thank you for your interest and good luck! Cornelius Brökelmann Political Consultant Berlin, Germany