The 250th anniversary of Goethe's birth hasn't stopped Berlin taking a funding axe to the institutes that bear his name. Jennie Brookman reports.

Former German chancellor Willy Brandt called the Goethe Institute (GI) his "third leg" of foreign policy and indeed the organisation that promotes the German language and culture worldwide reaches more parts of the world than many a well-travelled foreign minister: it has 135 institutes in 76 countries, from Amman and Beijing to Yaounde and Zagreb.

Since it was established in its present form in 1952 as a non-profit-making, semi-private body, the GI has been generously funded in this work by the German foreign office. Today it receives e150 million (Pounds 99 million) government subsidy a year and generates e30 million itself in income from language courses.

But now Germany is having to reduce its public spending, and the foreign office wants to cut the GI's budget by 5.2 per cent in 2000 and by a total of 12 per cent by 2003. The Goethe Institute headquarters in Munich says this makes closures of foreign institutes unavoidable and there have been reports that up to 30 may have to be shut.

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So the many celebrations this month to mark the 250th anniversary of the birth of its namesake - German dramatist and scientist Johann Wolfgang Goethe - are taking place under a cloud as the GI's 3,600 employees worldwide await the results of a review in September to see where the axe will fall.

It is most likely to fall in Western European countries with more than one institute (Britain has four: in London, Manchester, Glasgow and York) or in the United States, where strong cultural links with wealthy partnerships are already well established.

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Least likely to be cut are the relatively new Eastern European outposts set up after the fall of the Iron Curtain, because of the huge new demand for learning German and re-establishing old cultural links in these countries.

"I think everybody has their nightmares about this," says Wolfgang Kort, director of the GI in Manchester, although so far its e1.5 million a year budget has been hit harder by the strong pound than by cuts.

A typically medium-sized GI, it offers the full range of GI German as a foreign language certificate from courses for beginners to advanced level programmes for professional linguists. "As in any English-speaking country, we have to lobby to interest people in learning German," says Kort.

Its cultural programme is also typical of the traditional Goethe Institute approach: it works in partnership with local cultural organisations and is generally highbrow. It is co-sponsoring a project on the German Dada artist Kurt Schwitters in the Lake District, involving local and German artists.

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The GI in the Hungarian capital Budapest has a more grass-roots mission in response to the needs of a newly emerging, post-communist cultural scene. Since it was established shortly before the fall of the Berlin wall, it has been able to build on cultural links already established under the old East German communist regime.

"Many Hungarian artists who now belong to the cultural elite trained in Berlin. Their view of Germany is already positive and we are continuing to foster that," says Mattheas Muller-Wieferig, until recently head of the cultural programme in Budapest.

The Budapest institute has even adapted to traditional Hungarian cafe culture by setting up the Cafe Eckermann alongside its headquarters near the old opera house. The institute provides internet links, a variety of German and language newspapers and a meeting place and venue for cultural events. In the medium term it might even generate income - perhaps one idea for a more financially self-reliant future for the Goethe Institutes.