Why are Germans hoarding billions of useless deutsche marks?
January 8, 2024
Germans will start 2024 with a few extra billion stuffed between sofa cushions. No, not euros, but old deutsche marks.
People in Germany are famous for their attachment to cash, but more than two decades after the introduction of the euro, millions of deutsche mark (DM) coins and colorful bills are in sock drawers or have been lost down sewer drains.
While some of this old money lies with nostalgic Germans or collectors, another chunk can be chalked up as souvenirs taken home by tourists over the years. Experts say countries that once used it as a reserve currency may still hold some. No one really knows for sure. Though these marks can no longer be used, they can be traded for euros.
Just how much old currency is out there?
The fact that marks ceased to be legal tender in early 2002 seems to make little difference. Of the 162.3 billion marks in circulation at the time, around 7.5% of the hard currency is unaccounted for. Over half of the coins by value have not come home in the last two decades.
At the end of 2023, there were 12.24 billion marks still in circulation, according to the Bundesbank, Germany's central bank. Broken down, that comes to 5.68 billion marks in bills and 6.56 billion marks in coins. Together, they are worth around €6.26 billion ($6.92 billion).
Even for Europe's biggest economy, that is a significant amount lying idle, especially at a time when the government is searching for funding for infrastructure projects like the green energy transition and rail upgrades that are important for its economic future.
Marks slowly but surely coming back to the bank
Even though the deutsche marks are "only gradually finding" their way back to the Bundesbank, the bank is not worried about the missing cash. Anyone with old coins or bills can exchange them at a central bank branch in any amount. And indeed, a lot is exchanged each year.
The exchange rate is fixed at €1 to 1.95583 deutsche marks, and the service is free of charge.
Last year, more than 90,000 people showed up at the central bank, and upward of 53 million marks were handed over in exchange for €27 million, an increase over the previous year. Two-thirds of the overall value were banknotes, while one-third comprised coins. The most came from Bavaria, followed by North Rhine-Westphalia and Baden-Württemberg.
Importantly, the bank assures people there are no plans to discontinue this service. This makes Germany a bit of an outlier, as only five other eurozone countries have no deadline for handing over their old currencies: Austria, Ireland, Estonia, Latvia and Lithuania.
Other countries that took up the euro offered only a limited window for the exchange of money. In France, any franc hoarders had until March 31, 2008, at the latest, to hand them in. Greece was a bit more generous and gave everyone until March 2012 to exchange their drachmas. Now anyone there who finds old currency under a loose floorboard is out of luck.
Germans continue paying in cash
Luckily, for Germans, there is no rush. And maybe some of them still cannot let go. After all, they used those bills and coins a lot. It is not out of the ordinary even today to see "Cash Only!" signs in restaurants and kiosks.
In 2021, despite an uptick in cashless payments, cash was the most frequently used means of day-to-day payment in Germany, according to the latest study forsa, a market research institute, conducted for the Bundesbank.
Though cash payments have fallen sharply since 2017, the researchers concluded that cash was still used for 58% of goods and services purchased. Measured in turnover, cash payments amounted to only 30% since larger purchases and online shopping are often paid by other means.
On average individuals carried €100 in their wallets. For one-third of people, cash remains the generally preferred means of payment, found forsa.
As for the old deutsche marks lying around, Burkhard Balz, a Bundesbank board member, expects more to roll in soon, especially with a big generational change.
"When cleaning up inherited houses and apartments, deutsche marks are likely to be found," he told the dpa news agency in December 2023.
Yet many will wonder if a handful of coins is worth a trip to the bank and stick them back in a jar. There they will wait to be discovered again while confounding bankers as to their whereabouts.
For those marks that do end up back at the central bank, it is the end of the road. Notes are shredded on-site.
Coins are sorted and sent to one of the five German mints where they are cancelled. The metal then goes to scrap recyclers that melt it down for other uses. Not a happy end maybe, but a way to make a bit of extra cash in tough times.
Edited by: Ashutosh Pandey
While you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter Berlin Briefing.