May 18, 1990

German Monetary, Economic and Social Union

East and West German finance ministers sign the Monetary, Economic and Social Union treaty

The signatures were those of two finance ministers, not two heads of government — and they scheduled the East German mark's replacement six weeks out.

Palais Schaumburg, 18 May 1990

On 18 May 1990, West German Finance Minister Theo Waigel and East German Finance Minister Walter Romberg signed the State Treaty establishing a Monetary, Economic and Social Union in Bonn, with Chancellor Helmut Kohl witnessing.

Negotiations had begun on 27 April and produced the treaty in barely three weeks, under pressure from the GDR's worsening economic condition and continuing migration.

One currency, from 1 July

The treaty fixed 1 July 1990 as the start of a single currency area using the Deutsche Mark, with the Deutsche Bundesbank as central bank. The ordinary conversion rate was DM 1 for 2 GDR marks, with specified exceptions, and adults could exchange up to 4,000 GDR marks at 1:1.

Federal budget-balancing allocations to the GDR were set at DM 22 billion for the second half of 1990 and DM 35 billion for 1991, alongside a DM 115 billion Unity Fund agreed shortly before signing.

Not the Unification Treaty

The GDR was required to replace its socialist planned-economy foundations with a social market economy based on private ownership, competition, free prices and free movement of labour, capital, goods and services. Its unemployment, pension, health, accident-insurance and social-assistance systems were to be aligned with West German principles.

This was an initial step toward state unity, not unity itself. Accession was fixed by the Volkskammer on 23 August, detailed in the Unification Treaty of 31 August, and completed on 3 October 1990.

Sources

Researched 23 Aug 2026 6 sources 2 audit passes, 1 issue open

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