Western money at last! The monetary union of 1 July 1990
Midnight at Alexanderplatz: the Deutschmark is here!
At midnight sharp on 1 July 1990, the time had come: a queue of people had formed in front of the newly opened Deutsche Bank branch on Alexanderplatz in East Berlin. After the introduction of the D-Mark as the official means of payment in the GDR, the first Western money was paid out to the waiting people there. A historic moment.
The longing for the D-Mark as a »hard currency« was great at the time. In the GDR, Western money had played an important role for decades alongside the actual currency, the GDR mark. Officially exchanged for forum cheques, the D-Mark enabled access to the world of goods in the Intershops, for example. At the same time, however, Western money also circulated as a shadow currency – despite being banned. Coveted goods were exchanged for »blue tiles«, meaning the blue 100 DM notes, by means of newspaper adverts.
From the fall of the Wall to German unity
After the fall of the Wall and the opening of the inner-German borders on 9 November 1990, calls for the Deutschmark, which was seen as a symbol of freedom and prosperity, quickly became loud. By the time of the Volkskammer elections on 18 March 1990 at the latest, the decision for the rapid reunification of the two German states had been made.
The most important step on the road to German unity was the adoption of the economic and socio-political system of the Federal Republic and the introduction of the D-Mark as the official currency in the GDR. The basis for this was the State Treaty on Monetary, Economic and Social Union, which was signed by the finance ministers of both German states on 18 May 1990. It came into force on 1 July.
While the reunification of Germany was officially celebrated on 3 October, the Day of German Unity, 1 July had a direct impact on life in East Germany. In the weeks and months before, people had taken to the streets in favour of the Deutschmark and the 1:1 exchange rate. Contrary to the recommendations of leading economists, the German government under Helmut Kohl honoured this demand – with long-term economic consequences.
From Mark to D-Mark – how the exchange worked
However, the days leading up to the currency union were busy in the GDR. While wages, salaries, pensions and rents were automatically converted at a rate of 1:1, the procedure for savings was somewhat more complicated. First the money had to be paid into a bank account, then a conversion application had to be submitted. The exchange rate depended on age and amount: children up to the age of 14 could exchange 2,000 GDR marks 1:1, adults up to the age of 59 4,000 GDR marks and senior citizens up to 6,000 GDR marks. All higher sums were converted at a rate of 2:1. The family councils in the GDR therefore met in the weeks before the deadline. The aim was to reallocate bank balances between family members as favourably as possible. The exact conversion balance in DM was then recorded with a stamp in the savings book.
Between euphoria and uncertainty
Most people were initially delighted with the D-Mark. After all, Western money had been the projection screen for unfulfilled consumer desires in the GDR for years. Although the introduction of the D-Mark opened the doors to the western world of goods, there was no big spending spree, as the uncertainty associated with the political and economic upheaval was too great for many.
However, many fulfilled their long-cherished dreams of travelling in the summer of 1990 with the D-Mark in their pockets. Although the borders had been open since 9 November 1989, holidays in the West were only now affordable for many. On 1 July 1990, the last border controls between the GDR and West Germany were finally abolished. The adventurous even got on their racing bikes and stuck the memory of the new, unknown world on their mudguards like trophies, as this bike from our collection shows.
At the same time, monetary union brought profound changes to people's everyday lives. The appearance of shops and supermarkets changed overnight. In the days leading up to 1 July 1990, shelves were emptied in many places and shop windows were redecorated. From Monday, 2 July, the new goods were available for D-Mark. Food prices in particular rose noticeably. At the same time, many familiar East German products disappeared from shopping baskets, as they were often unable to hold their own against Western brands.
One example of this is the hazelnut cream Nudossi, which was produced in the GDR as an alternative to Nutella. However, the decisive factor for its disappearance was not only the change in consumer behaviour, but also the structural problems of many GDR companies. For example, VEB Elbflorenz, where Nudossi was produced, was forced to close down on 16 April 1990, with the result that hundreds of employees lost their jobs. With monetary, economic and social union, it quickly became apparent that many GDR companies were no longer competitive under market economy conditions after decades of a planned economy. Company closures and mass redundancies were the result and many people's lives were thrown into disarray.
The special exhibition to mark the 35th anniversary of monetary union
Entitled »Western money at last!«, the exhibition makes it clear that the introduction of the D-Mark in the GDR was far more than a bureaucratic act. The process was emotionally charged, politically explosive and economically momentous. With an approach based on everyday history, the exhibition uses original objects – such as a money counting machine or a money bag from 1990 – to tell of the significance of 1 July as perhaps the actual day of German unity. It invites visitors to take a closer look at the economic and social foundations of unity and also to reconsider current debates on the culture of remembrance and the relationship between East and West.
