Considering the sorry state of the economy, the country's contemporary art boom is one ray of light on an otherwise bleak horizon.
"Germany is currently the second largest contemporary art market after the US," said Michael Neff, director of Art Frankfurt. "Art is more 'in' than ever. It's drawing more and more buyers. That boosts prices, which in turn boosts publicity."
Investment and personal prestige
Consumers might have tightened their belts over the last few years, but the German art market appears to be immune to the national penny-pinching.
According to Alexander Sandmeier from the German Art Trade Association, it's largely because art has a unique status.
"The main aspect of buying art is not so much financial investment as pleasure," he explained.
"Art is not a standard consumer good," he said. "It's like books. If the economy is depressed you drive your car a few years longer, but you don't stop reading books. It's the same with art. And in the face of constant bad news, valuing art highly is perhaps more important than ever."
"Art has a lot to do with prestige," art market expert Wolfgang Wilke told the daily FAZ. "Despite the stock market crash of 2000, the art market has remained astonishingly stable. There seems to be a new factor, which is that people are interested in buying art for reasons which are not purely economic. When times are tough, people tend to seek new modes of self-expression, such as collecting art….the art market has a great future -- not just as a passion, but as a financial investment."
Pushing German Art
Werner Tammen from the Association of Berlin Galleries agrees that art is an increasingly coveted commodity primarily because of its cultural cachet.
"95 percent of art is bought because people see it as a personal enrichment," he observed. "Associating oneself with creativity is increasingly a cultural necessity, it's an integral part of cultural awareness. Artistic participation is a key way to garner social respect."
Equally, he stressed, it's a key way to oil rusty economic wheels.
"In the past few years, a lot of gallery owners have made substantial efforts to promote the label German Art on the international market" he said. "It's now paying off, and this art is very sought after at international art fairs, which has positive economic repercussions for Germany. International collectors are eager visitors here, because there's so much art being produced."
A lost opportunity
"But in other respects, the situation is appalling," he went on. "Public acquisition budgets in the capital have been cut back to virtually nothing."
The consequences are potentially disastrous.
"German art is being bought by international museums rather than German ones," said Tammen. "Art made here in the last five to ten years is simply not represented in our museums."
Movements such as the New Leipzig School as well as a number of up and coming Berlin artists might be the toast of the international art world, but they're more popular abroad than at home.
"Museums tend to step in and buy only after prices have already skyrocketed," pointed out Tammen. "Given that budgets aren't likely to increase in the foreseeable future, there's a serious possibility that forty years from now, museums collections will give the impression there was no art being made at the moment, when in fact the current art scene couldn't be more vibrant."
"We have to watch out we don't lose our cultural heritage because it's being snapped up by international buyers," he added. "There isn't a single museum in Berlin right now that's in a position to acquire recent art, because there are simply no funds available."
Refocusing urban policy
"Politicians completely underestimate the importance of art as an economic factor," pointed out Alexander Sandmeier. "It's a question of changing perceptions."
This could involve adopting what Prospect magazine has dubbed the "cool city strategy." According to the arts community, promoting culture rather than commerce is an efficient way of turning an economy round.
"Basically, arts and culture is the capital's trump card," insisted Tammen. "When Berlin makes an international splash, it does so with its arts and culture. So it should be better promoted. It's what attracts investors to the city, who in turn pay taxes here. It has long-term benefits. If you have a good product, then you market it -- it's just economic good sense."