Word of the Week: Zwangsumtausch

Sep 19, 2014

Deutsche Mark Enlarge image The West German Mark was worth more than the East German Mark. (© dpa - Bildarchiv) No one likes to be forced to do anything, especially when it comes to spending money. But in 1964, the East German government began a policy known colloquially as the Zwangsumtausch ("forceful exchange of money"). In other words, a mandatory exchange of currency.

In German, zwingen means "to force" and Umtausch means the exchange of money. The Zwangsumtausch forced visitors of the GDR to exchange a minimum amount of money for each day that they spent in the GDR. Early on, visitors from the West were required to exchange at least 5 West German Marks (DM) into 5 East German Marks (M) for each day they were in the east. This amount varied over the years, and was raised to 25 DM in 1980. The West German currency, however, had a much higher value; on the black market, one could usually buy 5 M for every DM (exchange rates varied from 1:3 to 1:8). The 1:1 Zwangsumtausch therefore benefitted the GDR financially, since the East German state was always in need of hard currency reserves.

Visitors from the west often found it difficult to spend the money they were forced to exchange - there was little to buy in East Germany, especially if they were simply visiting relatives on the other side of the border. At the end of their visit, they were unable to exchange their East German currency back into West German currency. The GDR also prohibited the export of their currency. As a result, visitors with leftover Marks were forced to deposit their money at an East German bank for future use if they returned to East Germany.

The Zwangsumtausch was a burden for those who visited the east, especially if they only spent a short amount of time on the other side of the border. Some people, however, were exempt from this policy, including retirees, students and tourists who could prove hotel stays exceeding 25 M per night. But for the most part, the Zwangsumtausch was an inconvenience. Businessmen and others who crossed the border frequently often found themselves with large East German bank accounts holding the currency they had exchanged during their many trips.

The word Zwangsumtausch has a negative connotation, referring to the policy as something forceful and unwanted. The GDR, however, called this the Mindestumtausch ("minimum mandatory exchange").

West German visitors Enlarge image West Germans wait to cross the border to East Germany on Christmas Eve in 1989. The Zwangsumtausch was waived that year during the holidays. (© dpa - Report) With the 25th anniversary of the fall of the Berlin Wall around the corner, you might hear a lot about the Zwangsumtausch and the difficulties of having two currencies in a divided Germany. Check out our Reunification Dictionary to learn more words related to the wall!

By Nicole Glass, Editor of The Week in Germany

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