BERLIN (AP) _ Chancellor Gerhard Schroeder marked Germany's national unity day Sunday with praise for those who brought down the Berlin Wall 10 years ago _ and a jolting announcement that he would cut federal subsidies to the downtrodden east.

With countries across eastern Europe commemorating the beginning of the end of the Cold War, Schroeder said all Germans should be thankful for the courage easterners showed in overthrowing their communist dictatorship, and for the solidarity and willingness to help demonstrated by those in the west.

The collapse of the Berlin Wall on Nov. 9, 1989, led a year later to unification, on Oct. 3, 1990. And Germans living today in peace with each other and their neighbors have a right to be happy and proud about what has been achieved, Schroeder said at the nationally televised celebrations in Wiesbaden, outside of Frankfurt.

Yet unification also brought with it enormous costs, he said. The equivalent of more than $540 billion in federal aid that has gone from west to east has contributed in great part to a ``strangulating state debt,'' he said.

``As far as that goes, a few cuts will have to be made also in the east,'' he said, without elaborating.

Last week an aide, Rolf Schwanitz, said while investment in infrastructure and other projects would remain, temporary ``make-work'' government jobs introduced by former Chancellor Helmut Kohl before the 1998 election would be trimmed, saving $1 billion.

Critics charged Kohl had beefed up the jobs program in a campaign bid to reduce national unemployment figures of more than 10 percent _ and around 20 percent in the east, which is still struggling with the transition to a market economy. Schroeder, when elected, said he would keep the programs going.

Yet he told an invited audience of top politicians, diplomats and guests _ including European Commission President Romano Prodi _ that Germany's need to cut its budget and reduce its debt demanded sacrifices from all.

Schroeder has proposed some $16 billion in across-the-board cuts _ a drastic belt-tightening he says will help fuel economic growth and create jobs.

Already under attack from traditionalists in his Social Democratic party for seeking to trim welfare and pensions, Schroeder sought to fend off new criticism over cutbacks in aid for the eastern states by reasserting his commitment to ``social justice (and) the solidarity between the different parts of the country and the society.''

Nine years after unification, however, pollsters say Germans seem to be growing farther apart, clinging to an us vs. them, east vs. west mentality.

Sunday's parade and festival in Berlin was a far cry from the jubilation of 10 years ago, when people from east and west popped champagne corks and danced together on top of the defunct Berlin Wall.

Tens of thousands turned out to enjoy the beer, bratwurst and pretzels and dance to music provided by pop singers, techno DJs and an Elvis impersonator. Yet the party seemed as gray as the weather.

Schroeder and other top German leaders were absent. Although Berlin has been in the spotlight all year with the return of the federal government, the official ceremonies were held across the country in Wiesbaden, under a system of rotating them each year among the 16 states.

Advertising from parade sponsors was everywhere, but hardly anyone carried a German flag.

``It's not the same feeling of euphoria,'' said Karl-Heinz Danne, a westerner who turned out with his wife and 7-year-old grandson. Many people, he said, are feeling disenchanted with the costs and as-yet-unrealized promises of unification.

``I guess the people in the east thought it would be simpler and quicker, and the people in the west thought it'd be cheaper,'' he said. ``But it's definitely a day to celebrate. Otherwise, people forget too quickly how things really were 10 years ago and how much being together means.''