LEIPZIG, EAST GERMANY, JULY 1 -- Perhaps more than any other East German city, Leipzig viewed its absorption into the West German economy today as an opportunity to seize liberties long denied and to renew a society stultified by one-party rule.

"You can have freedom, that's what it means," beamed Horst Betkhe, 59, a retired railroad engineer who joined thousands of others in this city where the anti-Communist revolution began in sampling some of its first fruits. Betkhe withdrew from pension funds his first-day quota of 2,000 deutschemarks to help his son finance a used West German Audi for 4,800 marks, about $3,000.

Joachim Franke, 58, an engineer who was forced by layoffs to try inventory management, brushed aside his personal predicament and voiced optimism that a widely expected rise in unemployment will prove a temporary cloud on the way to sunny prosperity for Leipzig's decayed industry. Armed for the first time with currency spendable outside East Germany, Franke will begin the new era by taking his wife and daughter on a holiday to Bavaria.

"Things can only get better," he proclaimed, "We have been cheated for 40 years. Society failed here. . . . We couldn't decide anything. Now you can be your own boss."

Not far from the dreary office where Betkhe made his withdrawal, United Colors of Benetton was preparing a show window of vivid sweaters and stylish jeans for the first day of hard-currency business Monday. Burger King plans a new outlet elsewhere in the city center, and an office-supply store is offering a snob-appeal set of pens entitled "Elysee for Elegance" at 77 marks.

But Brigitte Koch, 48, an engineering professor, cautioned that bright-colored consumer goods are only the surface of change. What Leipzig really needs, she said, is profound change -- in its leadership, its schooling, its tools and its politics.

"They can have all that stuff," she added, gesturing at a store stocked with drafting tools of a quality rarely seen before in East Germany. "What we want is spiritual relief. We've been stepped on long enough."

Although elections this spring created new political leaders at the top, Koch said, civil servants at City Hall and even national ministries are the same ones who were chosen on the basis of Communist Party loyalty rather than competence. These people must go if East Germans are to play any useful role in the unified German nation, she said.

"They were incapable socialists," Koch said, "and now they're incapable capitalists."