<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The German unification in 1990 generated many benefits, but also many disappointments. After the introduction of the monetary union between the GDR and West Germany on 1 July 1990, the East German industry collapsed, and mass unemployment became persistent. Ever since the modalities of the monetary union have been discussed controversially. This paper reconstructs the decision-making processes and negotiations towards monetary union. To a high extent, this reconstruction is based on original documents. Early on in Bonn a consensus was reached that monetary union had to be introduced soon, the rapid decline of the GDR making stepwise approaches impossible. Many officials were aware of the detrimental effects of a 1:1 conversion of the wages. But few dared to go against the widespread demands for 1:1 in the GDR population and government, not the least because of over-optimistic promises before the elections in the GDR in March 1990.</p></abstract>

The German unification in 1990 generated many benefits, but also many disappointments. After the introduction of the monetary union between the GDR and West Germany on 1 July 1990, the East German industry collapsed, and mass unemployment became persistent. Ever since the modalities of the monetary union have been discussed controversially. This paper reconstructs the decision-making processes and negotiations towards monetary union. To a high extent, this reconstruction is based on original documents. Early on in Bonn a consensus was reached that monetary union had to be introduced soon, the rapid decline of the GDR making stepwise approaches impossible. Many officials were aware of the detrimental effects of a 1:1 conversion of the wages. But few dared to go against the widespread demands for 1:1 in the GDR population and government, not the least because of over-optimistic promises before the elections in the GDR in March 1990.

Insufficient data, short time spans, illusions and multiple pressures: designing the German Monetary Union in 1990

The Faculty of Social Sciences, Department of Culture and Global Studies

Economics and Business Review

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The German unification in 1990 generated many benefits, but also many disappointments. After the introduction of the monetary union between the GDR and West...

Insufficient data, short time spans, illusions and multiple pressures: designing the German Monetary Union in 1990

Published Online: Apr 07, 2019

Page range: 53 - 78

Received: Dec 27, 2018

Accepted: Feb 01, 2019

DOI: https://doi.org/10.18559/ebr.2019.1.4

Keywords
decision-making processes, GDR economy, German monetary and economic union, German reunification, transition to market economy

© 2019 Wolfgang Zank, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Insufficient data, short time spans, illusions and multiple pressures: designing the German Monetary Union in 1990

Published Online: Apr 07, 2019

Page range: 53 - 78

Received: Dec 27, 2018

Accepted: Feb 01, 2019

DOI: https://doi.org/10.18559/ebr.2019.1.4

Keywordsdecision-making processes, GDR economy, German monetary and economic union, German reunification, transition to market economy

© 2019 Wolfgang Zank, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
decision-making processes, GDR economy, German monetary and economic union, German reunification, transition to market economy