Ugly battles strain Berlin-Hamburg relations
(Reuters)
Updated: 2005-12-11 10:49

Per capita income levels are around 30 percent higher in Hamburg than Berlin and property values are much higher. Berlin has unemployment of 18 percent compared to Hamburg's 11 percent.

Moves to relocate big companies such as Deutsche Bahn could compound the problems.

Although boosted by the government's move to the city, Berlin still boasts only one major company, pharmaceutical firm Schering, while Hamburg is home to many corporate giants such as Deutsche BP, Shell and Exxon.

Berlin, with a population of 3.5 million, had been a major center of industry and banking before many large companies, such as Siemens and Deutsche Bank, fled at the start of the Cold War -- when fears of a Soviet takeover loomed large.

It is keen to avoid the same thing happening again, but Hamburg Mayor von Beust is not giving up on the plan to move Deutsche Bahn, saying it would be symbolic and draw more firms to the north.

No matter what happens, railway chief Mehdorn has claimed a center-stage role in the rivalry.

"Mehdorn doesn't feel that he or his company are being sufficiently honored in Berlin," wrote Der Spiegel news magazine.