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SOVIET BLOC IN TRANSITION : Kohl Asks for United Monetary System for East, West Germany : Economy: Propping up East Berlin’s economy is seen as a way to slow the exodus to the west.

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From Times Wire Services

Chancellor Helmut Kohl asked Tuesday for talks on a German monetary union as a way to strengthen East Germany’s economy and stem a tide of immigrants to West Germany.

Kohl, under pressure to prop up East Berlin’s collapsing economy, split with his country’s central bank when he made his call after meeting with members of his Christian Democratic Union.

There is mounting pressure in Bonn for the strong West German mark to be made legal tender across the border, where up to 2,000 disillusioned East Germans--bitter at the slow pace of political and economic reform--are heading for the West every day.

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West German officials want to stem the flow because of the strains it puts on social services, housing and employment.

Heinrich Franke, chief of the West German labor office, said that 132,100 arrivals from East Germany were registered as unemployed last month.

Monetary union would make the West German mark the currency of both countries and require the surrender of much of the East’s economic sovereignty to West Germany and its central bank.

Karl Otto Poehl, president of the West German central bank, expressed reservations about a speedy monetary union, saying the East German mark must become convertible gradually.

East German officials acknowledge that the step could ease some immediate problems, but they generally have resisted because the East German mark’s much lower value would mean an erosion of savings. They also fear that unprofitable state enterprises would have to close, causing large layoffs.

Kohl made his proposal soon after Economics Minister Helmut Haussmann suggested a three-step plan for economic and monetary union by Jan. 1, 1993.

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Finance Minister Theo Waigel has said that quick replacement of the non-convertible East German currency with the strong West German mark may be the only way to slow the exodus.

Government sources said Kohl shares Waigel’s view that monetary union should occur this year.

Kohl said a formal proposal of talks will be made at a Cabinet meeting today and that details will be worked out during a visit to Bonn next week by East German Prime Minister Hans Modrow.

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