When reunification brought an end to the former East German Mark
(Ost-Mark), the Ost-Mark was generally convertible to the West German DM at an even exchange rate, although its true economic value may have been lower.
Most economists feel, that 2:1 devaluation of the East German Mark
was a mistake but, most probably, there was no alternative politically feasible.
The large de facto revaluation of the East German mark
together with the sudden full exposure to foreign and western German competition implied that large parts of the eastern German capital stock became economically unviable literally overnight.
The exchange rate of one East German mark
to one West German mark, widely described as a controversial act of West German generosity, was a propaganda coup.
Because the East needed hard currency (dollars, pounds, West German Marks) so badly, every visitor had to exchange at least fifty West German Marks for an equal number of East German Marks
to enter East Berlin.
Most recently, tourists were being allowed to enter, during the afternoon, through Checkpoint Charlie, if they had a precise amount of money to change for East German marks
, a valid passport, and a reason.
Aa On countless occasions I was approached with whispers in my ears to swap dollars for East German marks
on the black market.
First, we earned the normal compensation, in East German marks
, due labourers in our position.