Bundesbank celebrates 25th anniversary of German monetary union
The former Federal Finance Minister Theodor Waigel (CSU) paid tribute to the Deutsche Bundesbank's role in introducing the Deutsche Mark in the German Democratic Republic (GDR). It managed all logistical hurdles – from transporting to distributing the cash – brilliantly at the time, he said on Wednesday at a ceremony in Leipzig organised by the Bundesbank to commemorate the 25th anniversary of German monetary union.
At the event, Waigel gave a detailed account of the historical timeline of German monetary union, remarking that the Deutsche Mark brought with it freedom and human dignity for the East German people.
"This superseded everything else," said Waigel, referring to the costs of monetary union and the tough adjustments made to the East German economy as the Deutsche Mark was introduced.
Contemporary witnesses were also able to voice their thoughts during a podium discussion at the ceremony. Other speakers at the event were Torsten Bonew, Mayor and Councillor for Finances of the City of Leipzig, and Carl-Ludwig Thiele, member of the Bundesbank's Executive Board.
An intense effort
"The swift completion of intra-German monetary union was a shock therapy of sorts," said Thiele. Many East German enterprises would have had to close after the introduction of the Deutsche Mark, he continued, but the economic and social impact of this change was cushioned in the unified Germany by payments through government funds or the social security system. "The introduction of the Deutsche Mark brought the quintessential cornerstones of purchasing power, stability and international standing to the GDR," Thiele declared, while also noting that monetary union alone cannot help when the real economy is ailing. "The economic problems in the eastern states could not simply be remedied with several months of intense effort. It had to be a longer-term project," he explained.
The Bundesbank Executive Board member also focused on the political significance of the currency changeover.
"I am certain that the introduction of the Deutsche Mark in the GDR
irreversibly set in motion the process of political unification in Germany," said Thiele. He also pointed out another respect in which 1 July 1990, the day of German monetary union, was significant: it marked the first stage of European Economic and Monetary Union and thus the road towards a single currency. "
It was not only East and West Germany that strove to form closer bonds at this time of widespread political change. The European Community, too, sought greater integration. This culminated in the establishment of the European System of Central Banks and the introduction of the euro, amongst other things," Thiele concluded.