By EDMUND L. ANDREWS
RANKFURT, June 7 - Eleven years after the collapse of East Germany and the fall of the Berlin Wall, the once-disgraced Communists could be on the verge of a comeback in Berlin's city administration.
Due to a banking scandal that has created an acute financial crisis for Berlin's municipal government, the political coalition that long governed the city abruptly fell apart today and opened the strong possibility that the next government would include the successor to East Germany's old Communist Party.
That jarring prospect arose when the city's Social Democratic Party announced that it would no longer serve as junior partner to the Christian Democrats of Mayor Eberhard Diepgen. It also made clear that it would join the former Communists, now called the Party of Democratic Socialism, if necessary to create a new majority in the local legislature.
"It makes no sense, 11 years after the fall of the wall, to keep the P.D.S. a permanent political opponent," said Klaus Böger, a Social Democratic member of the Berlin Senate. "I am no longer prepared to say `never' in the face of responsibility for the city."
Berlin has been spending more than it takes in ever since the city was reunited in 1990. But its fiscal problems reached a crisis point two weeks ago when auditors discovered that a city-controlled bank was virtually bankrupt and would need a cash infusion of nearly $2 billion to stay afloat. That would come on top of the $30 billion in debt that Berlin has accumulated since 1990 and the $2 billion shortfall it had already been been expecting for this year.
It is still possible that Mr. Diepgen, who has been mayor here for 16 of the last 17 years, will be able to hold on to his job. It is also possible that the established political parties will work out a compromise to prevent the formation of what Germans call a "red-red" coalition between the Social Democrats and the far left.
But the former Communists are already junior partners in the governments of two eastern German states, and public attitudes toward the party have warmed considerably in many parts of the east. The reconstituted Communists have retained a core of supporters in what used to be East Berlin, and their acceptance has increased to the extent that some party leaders are routine guests on television talk shows.
In Berlin's last election, in October 1999, the Party of Democratic Socialism received 17.7 percent of the popular vote and came in third after the Social Democrats, who received 22.4 percent of the vote.
Whatever happens, Berlin's fiscal problems are so serious that any government, whether from the left or the right, will be under pressure to impose budget cuts that are certain to be deeply unpopular.
Berlin's fragmented political structure makes it impossible to predict what will happen next. Without support from the Social Democrats, Mr. Diepgen and the Christian Democrats will not have enough votes in the Berlin legislature to do anything. But the Social Democrats do not have enough votes to automatically force a new election, because that requires a two-thirds majority.
The alternative to a new election would be a calling for a parliamentary vote of no-confidence, which would require a simple majority. But Social Democratic leaders said today that they want the mandate that would come from new elections.
There are precedents for deals with the former Communists. Several years ago, Social Democrats in the eastern state of Saxony-Anhalt ignored criticism from conservatives to form a loose alliance with the Party of Democratic Socialism. Later, in a situation similar to that of Berlin, Social Democrats in the eastern state of Mecklenburg-West Pomerania abandoned a longstanding coalition with the Christian Democrats and teamed up with their rivals on the left.
But Berlin, with its scarred history of the wall and its enormous visibility as the capital of Germany, is quite a different matter.
"It is a scandal that the Social Democrats, 40 years after the construction of the Berlin Wall, are now preparing a red-red coalition," fumed Laurenz Meyer, a leader of the national Christian Democrats.
Petra Pau, leader of the Party of Democratic Socialism's Berlin branch, acknowledged in a radio interview that the wounds of division had not yet healed. But, she added: "A ruling alliance without the P.D.S. is not possible. Berlin is bankrupt."