July 1st in German History: East Germany Accepts the Deutsche Mark

100 Mark (O).jpg
A 100 Deutsch Mark note from 1989.

German Reunification was not one event, rather, a series of steps to reconnect the economies and societies of East and West Germany to make the creation of a united Germany possible. One of the most important of these steps was the introduction of the Deutsche Mark, West Germany’s currency, into East Germany on July 1st, 1990.

The Deutsche Mark was first introduced following the Second World War as a replacement currency to the Reischmark, which had become unstable and over-inflated. It was critical to the rebuilding of the German financial system and allowed for rapid growth and a return to pre-war economic conditions. The East German economy, in contrast, lagged behind and it possessed a far weaker currency. Thus, it was decided that in order to unite the two nations’ economies the Deutsche Mark would become the official currency of East Germany as well as of West Germany. On July 1st, 1990, East German Marks were discontinued and up to 4,000 could be exchanged for a limited time at a one-to-one ratio for Deutsche Marks, any number over 4,000 were exchanged at a two-to-one ratio. East Germans were also given 100 Deutsche Marks upon arrival in West Germany.

While the unification of currencies may seem mundane compared to other events that lead up to German Reunification, it was one of, if not the most important step. After 1989, the largest obstacle to reunification was the vast economic disparities that existed between the two. Many thought that reunification would simply be too expensive. However, the successful introduction of the Deutsche Mark helped stabilize East Germany’s economy and tie it to that of West Germany, making reunification a more economically viable prospect.

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