30 years and three currencies: anniversary of German monetary union
In the autumn of 1989, people throughout Germany were embracing each other in a state of jubilation. They were celebrating the fall of the Berlin Wall and the opening of the border crossing points between the Federal Republic of Germany and the German Democratic Republic. The fall of the Wall set off a chain of events that would have seemed unthinkable just a few months earlier. These included negotiations on a pan-German monetary, economic and social union, which entered into force on 1 July 1990. The Deutsche Mark, the symbol of German unity, became official legal tender in the German Democratic Republic (GDR).
There was a great deal of excitement among GDR citizens in the run-up to the first Deutsche Mark notes being paid out, with many waiting in long queues outside banks the night before. In order to cope with demand, town halls and even schools served as auxiliary payment points. Many families in the GDR used the new currency to buy furniture, clothing and consumer electronics such as televisions, stereo systems and video recorders. Foreign travel was also popular.
The Bundesbank brings the Deutsche Mark to the GDR
The Deutsche Bundesbank was responsible for punctually supplying Deutsche Mark to the GDR public. In record time, Bundesbank staff brought around 440 million banknotes and 102 million coins to eastern Germany. To distribute currency on the ground, 15 new branches were opened, with offices, cash desks and vaults, and a Provisional Administrative Office was set up in East Berlin. Together with the employees of the then GDR State Bank, this represented a huge logistical undertaking by Bundesbank staff. They standardised the two countries’ incompatible accounting systems for cashless payments and organised police protection for cash-in-transit shipments across the German-German border. On 1 July 1990, it was accomplished: the Bundesbank became the sole independent central bank for the whole of Germany and the Deutsche Mark became the common currency in both western and eastern Germany.
The euro is coming
At the turn of the millennium, it was time to say farewell to the Deutsche Mark. On 1 January 1999, the euro replaced the existing currencies as scriptural (book) money in 11 European countries. Three years later, the first euro banknotes and coins came into circulation. This meant that, after more or less just a single decade, the public in eastern Germany had to get used to new currency again. Banks issued a starter kit containing a bag of euro coins, so that people were able to get ready for the new money. With the introduction of the euro, the Bundesbank became part of the Eurosystem, which has since been responsible for the monetary policy of the Member States. The Eurosystem consists of the European Central Bank (ECB) and the national central banks of the euro area countries. Today, more than 20 years later, the euro is legal tender in 19 countries in Europe.