Bonn Offers E. Germany Deal on Mark : Currency: Eastern regime says western proposal comes close to its own views.

Bonn yielded to East German demands today and offered to convert savings in East Germany’s currency into West German marks at a highly favorable exchange rate of one-to-one.

East Germany’s conservative-led coalition said the offer, made despite a warning from the West German central Bundesbank that it could cause inflation, is interesting and comes close to its own views.

Government spokesman Dieter Vogel said Chancellor Helmut Kohl’s center-right coalition offered to swap wages, pensions and some savings at parity when the two Germanys enter a currency and economic union.

“The West German government’s offer reflects its sense of responsibility for economic and social developments in both parts of Germany and the stability of the . . . mark,” Vogel said.

The West German mark ended sharply lower in market trading on the news. German share prices fell and bonds were weaker.

Kohl and East Germany’s new prime minister, Lothar de Maiziere, both Christian Democrats, will meet Tuesday in Bonn to start negotiations on currency and economic union. Both see such union as a prelude to full political unification.

“The Bundesbank fully accepted that this is a decision for the government,” Vogel said at a news conference. “It also fully accepts that the economically ideal solution could not always be adopted for political and social reasons.”

Bonn offered to convert personal cash and savings of up to $2,350 at one-to-one. Savings above that amount would be swapped at two-for-one.

It stopped short of East Berlin’s demand that all savings be converted at one-to-one, but De Maiziere’s government described the proposal as a basis for negotiation.

Volker Ruehe, general secretary of Kohl’s CDU, defended the limit, saying it meant that a couple with two children could get $9,400 at one-for-one in addition to what they got at two-for-one.

De Maiziere’s government had also asked for an increase in wages and pensions to compensate for the scrapping of subsidies on basic necessities in East Germany, but Bonn refused.

Vogel said his government would find it very hard to concede the point as it believes that the extra wage rise could threaten the survival of East German companies.

But he added: “Basically, everything is negotiable.”

West Germans earn about three times as much as East Germans even at parity rates.

Pensions will be raised to West German levels, meaning that workers will get a maximum of 70% of their final net income after 45 years’ service.