Monetary, Economic and Social Union

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The monetary, economic and social union between the Federal Republic of Germany and the GDR came into force on July 1, 1990 on the basis of a state treaty signed on May 18, 1990 by Finance Ministers Theodor Waigel and Walter Romberg .

Monetary union

1: 1
July 1, 1990: In Gera, citizens of the GDR line up at a bank to withdraw DM

For most GDR citizens , the monetary union initially represented the biggest turning point, as they now held DM in their hands, which for them, as well as abroad, was the symbol of the economic miracle and West German prosperity. The Deutsche Bundesbank became the sole currency and central bank.

Exchange rates

The exchange rate was specially staggered and varied according to age and circumstances. Citizens aged 60 and over were allowed to exchange up to 6,000, adults up to 4,000 and children up to 14 years up to 2,000 GDR marks at a rate of 1: 1. Above savings were exchanged at a rate of 2: 1, debts were also halved. Wages, salaries, grants, pensions, rents and leases as well as other recurring payments have been converted at a rate of 1: 1. The credits of people and companies that were not based in the GDR were exchanged at a rate of 3: 1. The then Bundesbank President Karl Otto Pöhl criticized the approach to economic reunification and, in particular, the determination of the exchange rate for the introduction of the D-Mark in the GDR .

Association crime

The damage caused by fraud in connection with the monetary union is estimated at 20 billion DM. (see Central Investigation Group for Government and Association Crime (ZERV)).

Exchange and acceptance

Because of the limited amounts of marks that could be exchanged for DM at a rate of 1: 1, there were early purchases of consumer goods from GDR production such as washing machines or cars before the date of monetary union. Some GDR citizens with mark credit above the maximum amount for the 1: 1 exchange gave the excess money to less wealthy friends and relatives. A few days before July 1, 1990, stores were busy taking inventory, selling out and re-labeling goods. Money transporters were accompanied by police vehicles with flashing lights and supplied the banks. The exchange for the population began on July 1st at 12:00 am. On the following Sunday, which was open for sale, the video recorders, televisions, cars and trips, now freely available for DM, were in great demand.

Economic union

The basis of the economic union was the social market economy as it existed in the Federal Republic of Germany. The " Establishment for the fiduciary administration of public property" , founded on March 1, 1990, took over 7,894 publicly owned companies with four million employees on July 1, 1990 . Their task was to privatize the factories. The introduction of the D-Mark and the reorganization of the planned economy into market economy structures accelerated the decline of the GDR economy . The retail monopoly of the HO and the consumer cooperatives ensured a wide range of goods from West German production in the shops on the reporting date. On the other hand, the demand for goods manufactured in the GDR collapsed, as consumers preferred West German goods with the purchasing power gained through monetary union. The GDR companies now managed in trust, however, found buyers for their products only with great effort. The low productivity of GDR companies proved to be an enormous competitive disadvantage. The companies were also burdened by wage increases after monetary union. As a result, unit labor costs rose well above the level of West German industry and reduced competitiveness.

The GDR companies prepared an opening balance sheet on July 1, 1990 .

Social union

The social union comprised a restructuring of the social realities of the GDR based on the model of the Federal Republic. Article 1 (4) of the Treaty states: “The social union forms a unit with the monetary and economic union. It is determined in particular by a labor law system corresponding to the social market economy and a comprehensive system of social security based on the principles of fairness and social equality. "

The existing social insurance in the GDR was split up into pension, health, unemployment and accident insurance. Start-up funding was introduced for unemployment benefits and the pension fund.

In the GDR, work was now carried out in accordance with West German labor law , which included freedom of association, collective bargaining and changes to industrial action law (especially the right to strike) as well as participation and protection against dismissal.

Others

As head of division in the Federal Ministry of Finance , Thilo Sarrazin worked out the German-German currency union in 1990. In an interview in 2010 he gave an insight into the procedure at the time.

Individual evidence

  1. ↑ Karl Otto Pöhl is convinced: "The exchange rate was fatal" . In: Welt am Sonntag of August 29, 2004. Retrieved January 1, 2013
  2. ↑ Egbert Niessler: The scent of the new money. In: Hamburger Abendblatt from July 1, 2010, p. 8
  3. ↑ Gerlinde Sinn, Hans-Werner Sinn : Cold start. Tübingen 1992, ISBN 978-3161458699 .
  4. ↑ manager-magazin.de from July 1, 2010 : Billion transfers were factored in

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