By Kerstin Gehmlich
BERLIN, Oct 31 (Reuters) - The centre of power in Communist East Germany was turned into a centre for capitalist learning on Thursday when Germany founded its first international business school in a former government building.
A handful of top German companies, including steel and engineering group ThyssenKrupp and carmaker Daimler Chrysler AG , are underwriting the institute, which hopes to compete with American business schools like Harvard for the best European graduates.
"Our ultimate goal is to further European competitiveness in the world," said Derek Abell, President of the European School of Management and Technology, speaking at the founding ceremony.
The school, opening 13 years after the fall of the Berlin Wall, aims to become Germany's answer to Harvard, the London Business School or France's INSEAD.
Berlin has donated the building which housed former East German leader Erich Honecker's government until he was swept from power in 1989, a year before German reunification.
Students on their way to class will pass huge stained glass paintings of happy workers in the socialist-realist style, silent reminders of the Communist era.
Young professionals with a degree who have worked for more than three years can study for a Master of Business Administration (MBA) at the school -- provided they can afford the fees of around 50,000 euros ($49,000).
Most German universities are free.
About 50 students from nearby Humboldt University staged a protest on Thursday against the launch of the elite university, a thorny issue in Germany where the creation of elite institutes recalls dark memories of the Nazi era.
"Only the sons of rich managers will be able to afford this school," said Jakob von Recklinghausen, a 22-year old computing and philosophy student. "These companies should support public universities, which lack resources."
He said his lectures were overcrowded and it was a disgrace the government was giving the spacious building to a private university.
EASTERN EUROPEAN BRIDGE
The school's founders said they did not want to play catch-up with the world's leading business schools.
"We have to come into the market with a difference. We have to create a unique profile to force others to catch up with us," said Abell, currently a professor at the International Institute for Management Development in Lausanne.
The school's location in Berlin would give it the opportunity to be a bridge between West and Eastern Europe.
The foundation has raised 90 million euros so far. The interest earned on this endowment will be used solely for research purposes, said Gerhard Cromme, the foundation's coordinator and head of ThyssenKrupp's supervisory board.
"We are confident we can win over more donors. Already, 25 of the leading German companies are participating," he said.
Apart from degree courses, the school will also run seminars for business executives.
The school, which hopes to cater for 4,000 students, will start its first classes next spring.