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Washington soon smoothed the Berliners’ feathers by making a commitment to the Pariser Platz. Holbrooke, in fact, may have been bluffing in order to scare the Germans into imposing fewer restrictions. But no sooner had the decision been made to build at the old site than a new problem arose: a shortage of funds. Washington had planned to finance the construction of its new embassy from the sale of American-owned property in Germany, especially in West Berlin. The proceeds from these sales, however, were less than expected. The State Department therefore announced in 1997 that it was putting the new construction on hold; when its embassy moved to Berlin in 1999, it would make use of existing buildings, including the cramped former American embassy in East Berlin. In other words, because of its professed poverty, the richest country in the world was going to have to camp out in the German capital. Learning of this dire state of affairs, Berliners offered to take up a collection for Washington’s new embassy. They said that America could think of such assistance as partial compensation for the Marshall Plan.

Chagrined by this turn of events, Washington insisted that it could find the funds to build an appropriate home on the Spree. The American embassy saga was not over yet, however, for a dispute over security measures put off construction once again. In the wake of terrorist attacks against its embassies in Kenya and Tanzania, Washington demanded security provisions for its future embassy in Berlin that sparked resistance from the Berlin Senate. The Americans insisted on a thirty-meter traffic- and pedestrian-free zone facing the open (western and southern) sides of its complex. This would require closing off two main avenues and rerouting the traffic. The Berlin Senate rejected the demand on grounds that, as one senator declared, the changes “would diminish the Brandenburg Gate and its environs.” This response reflected a new attitude on the part of the Berliners toward their erst-while “protective power.” No longer was America’s wish the locals’ command. Once again, Washington threatened to build elsewhere in Berlin, though America’s new ambassador, John Kornblum, was known to favor quarters, “preferably without windows,” on Pariser Platz. Until the security issues could be resolved, the plot at Number 2 Pariser Platz remained empty, save for a small metal sign reading, “The once and future site of the American Embassy in Berlin.”

Berlin’s tradition-oriented planners and architects saw the Pariser Platz as a base from which to extend their influence down Unter den Linden to the city’s other showplace square, the Schloßplatz. Like Pariser Platz, the Schloßplatz had been badly smashed up in the war, but, as we have seen, the old Hohenzollern Palace itself had survived partly intact until the Communists demolished it in 1950. The site was used for government-approved demonstrations and as a parking lot until the Honecker regime covered part of it with the GDR’s own “palace,” the Palast der Republik, in the mid-1970s.

Given the historic significance of the Schloßplatz and its missing and extant palaces, it was perhaps inevitable that the square’s fate in the new Berlin would become the subject of heated debate. The Wall had barely come down when a call went up to demolish the GDR palace and to rebuild the old Hohenzollern Schloß in its place. The idea sparked spirited, albeit differentiated, resistance. Some of those who objected to rebuilding the old palace were quite prepared to tear down the newer one; other opponents of reconstruction were avid partisans of the existing GDR structure. There were thus “rival nostalgias” at work here, competing visions of the past that impeded any consensus about the future. And, as usual, the rival memories of Berlin were emblematic of conflicting collective identities and images of the German nation.