After the fall of the Berlin Wall, former GDR citizens began to call for the "hard" D-Mark. On July 1, 1990, the Economic and Monetary Union came into force. With severe consequences for the Eastern economy.
by Viktoria Urmersbach
In 1990, many politicians predicted that the stream of emigrants from the GDR would only stop when economic union was complete. Since the opening of the wall on November 9, 1989, thousands have left their homes every day and are threatening to bleed the republic dry.
"If the D-Mark comes, we'll stay"
For months, the demonstrators had taken to the streets for free elections. Having achieved this first goal, they now chant:"If the D-Mark comes, we'll stay - if it doesn't, we'll go to it!"
As early as the Volkskammer elections in March 1990, East German voters were already demanding a change in the economic system. They no longer want to work and live in the planned economy, but in the market economy. For many, the prospect of the D-Mark is a strong argument for voting for the CDU. As early as February, Helmut Kohl announced in a government statement:"It is now a matter of sending a clear signal of hope and encouragement for the people in the GDR. For the Federal Republic of Germany, this means that we are bringing in our strongest economic assets :the German mark." Other politicians such as Oskar Lafontaine from the SPD warn against the CDU's rapid unification course.
Monetary union? "A very fantastic idea"
On February 9, 1990, Bundesbank President Karl Otto Pöhl announced that the Bundesbank was already working on monetary union.Many business associations and economists also advise against a quick process and the 1:1 exchange rate. Helmut Schmidt considers it a "cardinal error". Bundesbank President Karl Otto Pöhl initially called the Chancellor's plans "a very fantastic idea". Nevertheless, the Deutsche Bundesbank is already preparing the money exchange with military precision from February. The head office in Kiel is responsible for the former district of Schwerin, Bremen for Neubrandenburg, Hamburg for Rostock and Hanover takes care of the partner banks in Magdeburg and Halle.
Bank branch manager under constant stress
In Kiel, Ralf Ebert immediately volunteered to work on site in Schwerin from June:"It was an exciting time that I really wanted to help shape," he explained to the NDR a few years later about his decision at the time. At the time, Ebert was one of the two new branch managers. He has to set up a functioning branch within a month before the introduction of the D-Mark. His tasks include familiarizing colleagues from the GDR state bank with the western system and solving many practical problems. He has to procure office furniture and money processing machines, recruit staff, negotiate with the GDR authorities and the People's Police - and all with just one phone.
Tons of cash traveling around the country
The then GDR Prime Minister Lothar de Maizière called on his compatriots to look forward to unity with "self-confidence and confidence", even if the exchange rate for larger assets was only two East German marks to one West German mark. In retrospect, that was still too expensive, Thomas de Maizière criticized as Federal Minister of the Interior several years later. An exchange rate of one to three or four would have made economic sense - but was not politically justifiable at the time.
From June 1990, the Bundesbank sent 600 tons of banknotes and 400 tons of coins from the west to the new federal states. Around 25 billion Deutschmarks are on the way.
The D-Mark is coming:New Year's Eve mood in summer
In many places, people can't wait to finally get their hands on Western money. Already on Sunday night, July 1, 1990, thousands were crowding in front of the Deutsche Bank branch on Alexanderplatz in Berlin. Exactly at midnight, accompanied by firecrackers, rockets and champagne, the common currency is to be issued. The snake grows to 600 meters in length - the glass panes break before midnight. Police and ambulances must come and help survive the onslaught without many injuries.
New money for the whole family. On Sunday, July 1, 1990, many East Germans are happy about the "hard currency" from the West.On the other hand, in Schwerin's Goethestraße, the exchange campaign is proceeding in an orderly fashion. Ralf Ebert's employees had to work all day unpacking the coin packets and bundles of banknotes for their customers, the banks, and handing them out appropriately in order to remain solvent at all times despite the onslaught of customers. "But we watched from the window as the queue in front of the Sparkasse at Marienplatz got longer and longer," Ebert later recalled.
At the beginning of 1991 there were still 4,200 tons of GDR hard money in circulation
Once in great demand, many Trabbis were scrapped soon after monetary union.Consumer advice centers warn of consumption frenzy. In fact, for many GDR citizens it is an intoxicating feeling to hold "real" money in their hands - no longer the ultra-light aluminum coins, also known as "aluminum chips". Not only banks, but also schools and police stations serve temporarily as exchange points. The GDR coins will be in circulation for another year, because the minting of new coins cannot be managed any faster. At the beginning of 1991 there were still 4,200 tons of GDR hard money in the wallets until the old currency was no longer valid on July 1, 1991.
Monetary union will be a shock experience for many
After the euphoria comes the disappointment. The economic union will be a shock experience for many. Food prices have tripled in some cases. Inexpensive East products are disappearing from the shelves of department stores in many places because customers only want to buy West goods. The GDR companies now have to prove themselves in the market economy and suddenly face global competition. But not only in their own country, but also in the socialist sales countries, the demand for Eastern products is decreasing:The Hungarians, for example, now prefer to buy Japanese cars than Eastern Germans.
Federal government approves liquidity aid
The federal government decides to grant liquidity assistance to practically all East German combines for the first few months - a lot of money for ailing companies. The goal:to survive the first all-German federal election.
In 1990, Mecklenburg-West Pomerania contributed only eight percent to the GDR's gross industrial production. In addition to the agricultural industry, only shipbuilding is important:the Neptun shipyard, the Mathias-Thesen shipyard in Wismar, the Warnow shipyard in Warnemünde, the Volkswerft in Stralsund, the Peene shipyard in Wolgast and the inland shipyard in Boizenburg are the most important employers in the north-east. It becomes the task of the Treuhand to privatize the combines.
Economic output plummets:hangover in the port of Rostock
Short-time work in the port of Rostock:Shortly after economic union, business collapsed.Only two weeks after economic and monetary union, the first negative effects are becoming apparent:from July 16, 1990, half of the 5,800 employees in the Rostock port are on short-time work. In the first half of the year around thirty ships were at the docks every day, now only five freighters are tying up their lines. With the start of monetary union, imports and exports in the port declined rapidly. Customers from the Eastern Bloc are canceling their contracts and entire transport connections are being suspended. After the end of the state economy, the shipbuilders get into rough seas, have to endure bankruptcy filings, subsidy scandals and sometimes several changes of ownership. While the Volkswerft and the Peenewerft have now merged to form the P+S Werften GmbH and the Mathias-Thesenwerft and the Warnowerft belong to the Russian Wadan Yards AG, the Boizenburg inland shipyard has to close in 1997 after more than 200 years of factory history. Of the original more than 50,000 jobs in shipbuilding, only a fifth will remain.