The March 1990 election brought the beleaguered GDR yet another new government: a “grand coalition” of the CDU and SPD under the leadership of the East-CDU chief Lothar de Maizière. A descendant of the French Huguenots who had emigrated to Berlin in the late seventeenth century, de Maizière had stayed clear of entanglements with the former Communist rulers—or so people thought at the time—and seemed to be the right man to lead the GDR safely and smoothly into oblivion. Upon taking office he promised the “rapid and responsible realization of German unity after negotiations with the FRG under Article 23” of the
But unification was coming, and another important step toward it occurred on July 1, 1990, when the East German currency gave way to the mighty D-mark. Bärbel Bohley’s complaint that the March elections had been about money was not without validity: East Germans had become as contemptuous of their impotent ost-marks as they were of their flag; they wanted the D-mark, and they wanted it fast. Kohl realized that bringing Western currency to the GDR would signal a commitment to the East, just as importing D-marks to West Berlin in 1948 had shown a determination to save the city. Kohl also hoped that a change in currency would slow the East German exodus to the West. “If we don’t want the people to come to the D-Mark,” he said, “the D-Mark has to go the people.” On February 6 he announced his intention of exploring a “currency union” with the GDR. The main question concerned the value at which the eastern currency should be converted. At the outset of the discussions, Federal Bank president Karl Otto Pöhl warned Kohl not to use currency as a lever for national unity. True politician that he was, however, the chancellor responded that “we should not approach this historic decision with a mercenary mind.” As usual, Kohl prevailed. On July 1, 1990, the GDR got the D-mark, and the conversion rate was one to one.
A new Deutsche Bank outlet on the Alexanderplatz opened its doors at 12:00 noon, launching the alchemic process of converting Eastern lead to Western gold. To celebrate this “initial step toward unity,” the bank manager gave the first customer through the door a bottle of champagne and a one hundred D-mark savings account. Flush with their new money, East Berliners talked excitedly about how they would spend it. Some planned elaborate vacation trips. Others thought in more modest terms: “Eating decently, visiting a disco or whorehouse, that’s all possible now,” enthused one man. Inevitably, there was a run on used Mercedeses—and, just as inevitably—a rash of accidents involving drivers unused to vehicles that actually accelerated when one stepped on the gas.
Amidst all the excitement, few realized that the monetary union might bring long-term challenges as well as instant rewards. Shoddy and unsophisticated eastern products, now priced in D-marks, could no longer compete with Western imports. Even domestically produced food was affected, as eastern shoppers suddenly turned up their noses at local cherries and apples in favor of fruit flown in from Washington State. Many companies had difficulty meeting their debt obligations and payrolls in the new currency; it was one thing to retain marginally productive workers when they were paid in ostmarks, quite another to do so when the wages were in D-marks. The GDR’s Eastern European trading partners reduced imports from East Germany because the goods were now overpriced. It may indeed have been necessary to bring the D-mark east, but doing so at a parity of one to one turned out to be a crucial mistake.
