German Unification: A Personal View

The offer came as a complete surprise. Until 6 February 1990, when the Federal Republic issued its offer to the GDR to form a monetary, economic and social union, both sides had assumed a step-by-step adjustment by East Germany, with the economic shock being cushioned by an appropriate exchange rate policy, and support from Bonn. Indeed, on the very day of the offer, when the heads of the Bundesbank and the GDR’s National Bank (Staatsbank) were meeting in Berlin to discuss forms of monetary cooperation, and just before Bundesbank President Pöhl and his deputy Helmut Schlesinger learned of the offer, Pöhl dismissed a monetary union as ‘premature and quite unrealistic’. A few hours before that, even the Federal Minister for Economic Affairs had been discussing a three-stage plan produced by his Ministry for a currency and economic union which envisaged ‘tying the GDR Mark [M] to the Deutsche Mark [DM]’ in the second phase and the creation of a ‘common standard currency’ only in the third. The Sachverständigenrat (Council of Economic Experts) warned Chancellor Kohl on 9 February that monetary union should not be placed ‘at the head of the list’.