One Currency Celebrated in Two Germanys

Barely five months after the first political decision was made, the two Germanys today implemented a monetary union, marking the first giant step toward full unification.

The currency union constitutes one of the most significant, unusual economic experiments of the post-World War II era. Literally overnight, it made the West German deutschemark, one of the West’s premier currencies, the currency of the centrally planned, former Communist country, East Germany.

In East Berlin’s sprawling Alexanderplatz, thousands of people gathered for the midnight changeover. Fireworks shot into the summer night as people cheered, sang drinking songs and brushed away occasional tears.

The midnight opening of a Deutsche Bank branch in the vast square drew throngs of eager East Germans who clutched their new deutschemarks and scattered worthless East German change in the street.

West Berlin Mayor Walter Momper autographed small East German bills for admirers. “This is almost like Christmas,” said Enrico Rohmann, an 18-year-old East Berlin cinema worker. “I heard about it on the radio and had to come here to see what was going on.”

“What a weekend!” declared the mass circulation West German daily Bild Zeitung in its Saturday editions.

East German television, which devoted most of its evening news Saturday to the subject, was carrying extensive live coverage throughout the day today.

The deutschemark comes as part of a package that effectively extends most West German economic and social legislation to East Germany.

Although adoption of the deutschemark is likely to bring a sharp rise in unemployment as heavily subsidized enterprises go under in the face of stiff Western competition, it also gives a freedom previously unknown to 16 million East Germans--a freedom to travel and to shop with money that anyone would be glad to take.

Banks throughout the country were opening today, violating near-sacred bans on Sunday commercial trading in both Germanys.

The branch of West Germany’s Deutsche Bank, opening at midnight, was the first of thousands of Western companies to officially begin business in East Germany.

In a nationally televised speech Saturday, East Germany’s Prime Minister Lothar de Maiziere tried to steady his people, telling them to stay optimistic, be patient and keep their nerve through the difficult initial period that most economists expect to be characterized by high unemployment.

“What we need is self-confidence,” he said. “Let’s begin with courage. We shouldn’t just concentrate on the problems but see the opportunities, for few will come (to invest) if they see us give up.”

The chairman of the West German Bundesbank, Karl-Otto Poehl, also spoke on East German television Saturday, underscoring the need to attract strong private investment.

Political observers believe that it is essential for the success of unification to maintain public morale in East Germany and to hold West Germany’s political commitment to the cause of unity if costs of supporting the East grow.

That the currency union is also a major step toward unification was apparent in many parts of divided Berlin, the old German capital, as barriers and controls seemed to melt by the hour.

Traffic was jammed on both sides of the vanished border in the heart of Berlin, and cars honked at midnight as if celebrating a wedding. Border guard stations were dark and abandoned.

Roads severed 29 years ago on both sides of the former site of once-famous Checkpoint Charlie were open Saturday, and traffic passed freely across a strip a few hundred yards wide that until last fall was walled and heavily mined.

One traveler passing from East to West Berlin late Saturday evening found the East Germanborder guards ignoring traffic while they gathered around a farewell barbecue nearby, discussing their future.

Saturday editions of most East Berlin newspapers reflected the mounting anticipation as the countdown to the new era moved through its final hours.

“From Sunday, the first violin finally begins,” said the independent Berliner Zeitung’s headline, set over the face of a 20-deutschemark note decorated with a violin and bow.

Said the liberal newspaper Der Morgen, “July 1, the start of a future of adventure.”

Both papers offered extensive features on subjects that have dominated kitchen table conversations in the two countries since the prospect of getting the deutschemark in the East emerged last February: “Where should I put my money so it gets a favorable return? How safe are pensions? How is it possible to buy my own house?”

For East Germans, as for others who lived for the better part of four decades in the Communist, centrally planned countries of Eastern Europe, actually owning one’s own house or choosing among different kinds of automobile insurance are exciting, yet completely alien concepts.

Some West Germans were jumping the gun Saturday in an attempt to speed the transition.

Along East Berlin’s Friedrichstrasse, about 400 yards from the former site of Checkpoint Charlie, where East German border guards only months ago confiscated Western newspapers and magazines as decadent influences, stylish West Berlin models passed out champagne and sandwiches to those interested in learning about Western-style insurance.

“This is a growth market and I’m in early,” smiled Manfred Lange, a West Berlin independent insurance agent. Lange said it took six months to determine if a prime location opposite the Grand Hotel--a place used for years to store scrap wood--could be rented and another several weeks to negotiate a lease.

In addition to auto and life insurance, Lange said he plans to set up an electronic equipment repair service. His son, Thomas, who employed the models as part of his own business, called Dance Maniacs, said he hopes to fill another gap in the East German market by staging fashion shows at downtown department stores.

From a safe distance, two off-duty Soviet soldiers observed events--and members of the Dance Maniacs--with a look of disbelief.

In East Berlin and elsewhere throughout the country, stores cleared the final pieces of old inventory and began stocking shelves with Western goods, which, without the deutschemark, were beyond the reach of the average East German.

The West German central bank, the Bundesbank, and the major West German commercial lending institutions have approached the currency union with the precision of a military operation.

The Deutsche Bank, for example, has established temporary branches in trailers and hastily erected prefab structures--all equipped with satellite communications to connect them to the bank’s systemwide computer system and automatic teller services.

Beginning early in June, the Bundesbank distributed the equivalent of $15 billion--600 tons of bills and 500 tons of coins--to banks throughout East Germany.

The amount, roughly twice the total of cash now in circulation in East Germany, was purposely high to avoid any possibility of shortages in the first hectic days of withdrawals, Bundesbank officials said.

East German bills, which will remain legal tender through Saturday, must be deposited in a personal bank account to be exchanged for deutschemarks.

In one of the ironies of history, the central storage place for the West German money has been the cellar of the old Communist Party Central Committee building, which has some of the largest vaults in Europe.

During Adolf Hitler’s Third Reich, the building contained the German central bank, the Reichsbank.

Back in Alexanderplatz, the crowd stood around a modernistic world clock, waiting for midnight to come. The clock shows dozens of cities around the globe--places that just months ago East Germans could never dream of visiting.

In Los Angeles, it was 3 p.m.

In Moscow, it was 2 a.m.

In Tokyo, it was 8 a.m.

And in Berlin, it was a new day.

Times staff writer Tamara Jones contributed to this story.