EAST BERLIN, JULY 1 (SUNDAY) -- At the stroke of midnight, hundreds of thousands of East Germans shot off fireworks and cheered the first moments of the economic merger of East and West Germany, the most significant step so far to political unification.
Car horns sounded and champagne bottles popped this morning as crowds swarmed through the Alexanderplatz vying for a chance to watch as the first of their countrymen entered a branch of West Germany's Deutschebank to exchange their money for the currency of their future -- the West German mark.
"As soon as I get my money, I'm taking a trip and then getting a video recorder," said Andreas Matthes, who brought his wife and elderly mother to the crowded square.
While East and West Germany will continue for now with separate governments and armies, they will from today on share one economy and one currency.
Millions of East Germans are expected to line up at 10,000 banks around the country today to trade their tiny bank notes with portraits of Marx and Engels for the powerful West German mark that is one of the pillars of the global economy.
Midnight brought more than a monetary merger. All remaining border controls between the two Germanys were scrapped, effectively removing what was left of the Iron Curtain from the middle of Germany to the German-Polish border.
The East's socialist system has vanished overnight, replaced by Western consumerism and what everyone anticipates will be higher prices, soaring unemployment and the hard task of blending two cultures that have grown apart over two generations of enforced separation.
Until the all-German elections proposed for this December, the post-World War II invention known as East Germany will still exist, but the Bonn government is now in charge of both Germanys' budgets, taxation, insurance, pensions, utilities -- in short, nearly every aspect of daily life.
Overflowing garbage bins told the story of preparations for today. Shops tossed out huge ledger books tracking years of transactions with Communist state enterprises. Apartment dwellers got rid of appliances for which replacement parts are no longer available. Downtown trash cans are suddenly piled high with the detritus of Western consumerism: Sprite cans, plastic cups, shopping circulars.
"Adieu, East Germany," said the main headline in Saturday's edition of Neues Deutschland, which was, until last fall's peaceful revolution, the newspaper of the ruling Communist Party.
The party, now renamed and a minor voice in the freely elected legislature, predicts that massive unemployment and steep price increases will make economic unification a bitter trial for East Germans.
West German Chancellor Helmut Kohl, who has remained bullish despite committing his country to massive borrowing to pay for unification, conceded that because of the transition to a mixed economy, "workplaces will be lost." But, he said through a spokesman, "there will be many new jobs created."
That comes as little solace to people like Oliver Kietzmann, 24, a coppersmith who works at a government-owned enterprise that repairs churches and other historic sites. He spent Friday with the stonecutters who share his idyllic workyard in the shadow of Magdeburg's 800-year-old cathedral, worrying about what will happen on Monday.
That's when his employer will cease to exist. The boss plans to try to keep the business going by taking it private. But the competition will be tough; the craftsmen work entirely by hand, the stonecutters chiseling sandstone far more slowly than highly mechanized West German restoration firms.
"I'm just one person and I can't work as fast as some big company that has lots of coppersmiths," Kietzmann said. "I'd like to continue in my field, but I probably won't be able to."
The East German government estimates that, stripped of subsidies that led to massive overstaffing, a third of its industry will shut down soon. West German economists predict that as many as 2.5 million of the 9 million East German workers will find themselves out of work.
Kurt-Peter Schmidt, a metalworker at a crane-making plant near here, said his enterprise has already laid off 100 of the 350 people in its office. Another 100 are to go soon. Still, Schmidt said, "they'll have more people than they know what to do with. We only make one crane at a time. There's not much to administer."
For the past week, East Germany has been in the throes of the world's largest going-out-of-business sale. While citizens line up to get their West German marks -- each adult can withdraw up to $1,250 worth between today and Friday -- every store in the country must close this weekend to conduct inventory.
Many will never reopen. Many others will return Monday with all or mostly Western products on their shelves.
At an East Berlin shop with the typically bland name Household Items, assistant manager Doris Eischner was busy unpacking Krups waffle irons and Braun citrus pressers, West German items far more expensive than the Soviet light bulbs whose shelf space they took.
"We stopped buying Eastern items four weeks ago," she said. "We used to buy everything in bulk from the government list. But now we don't know how to judge, so we buy one or two of each item."
A West German set of pots will cost 900 marks; the old East German ones cost 100. "Of course it's a different quality," Eischner said. "But who knows if people will buy it?"
As the countdown to what Germans call Day X neared its final hours Saturday, there was, especially on the hours-long lines that have become routine outside banks in recent weeks, a mixture of trepidation and frustration.
"I feel betrayed and sold out by the old system," said Dagmar Daniel, an East Berlin secretary who will lose her job at summer's end. "And I don't expect much from the new system. Our government shouldn't have given everything away to the Westies. A little bit of pride wouldn't have hurt."
"When you've spent 40 years accepting things, it's hard to get rid of that way of acting overnight," said Karl-Heinz Schultze, 50, a steelworker. Schultze's bosses told him there is plenty of work, but they've already laid off 1 in 7 workers. His wife, an inspector at a leather factory, will have her hours cut in half next week.
Most salaries will remain the same, but East Germans on average make only one-third of what West Germans make, and shoppers will soon face much the same prices as do shoppers in the West.
That amounts to what many see as second-class citizenship, especially since East Germans will have to pay income tax for the first time, another chunk out of their paycheck even as they lose free benefits such as day care, summer camps, job training and pensions.
Despite the hardships, many eagerly were awaiting Day X. "We were always the dumb Germans because we ended up on this side of the Wall," said Johanna Wendlandt, 71. "We couldn't do anything right. Now that will change."
Many East Germans expect their countrymen to blow their West marks in a frenzied flexing of their new buying muscle. But traditional German frugality dies hard. Other than a few who expect to make a down payment on a Western car, none of more than 60 East Germans interviewed planned to do anything but save their hard currency until the economic situation clarifies.
A poll by the newspaper the European found 57 percent of East Germans plan to do nothing special with their first West marks.
The East Germans know they are getting an unusually cushioned ride to capitalism, thanks to Bonn's $70 billion commitment to unification -- a level of spending that has soured much of the West German euphoria that followed the opening of the Berlin Wall.
But the West German role in creating the new Germany -- an economic powerhouse of 78 million people, with a gross national product 45 percent bigger than France's -- will not make East German lives a breeze in the months ahead.
West Germany sent over its fleet of huge armored trucks stuffed with 600 tons of bank notes and 500 tons of coins. But it is up to the East Germans to learn a way of living vastly different from what they knew.
"I have to manage a household," said Undine Schmidt, a nurse's assistant with two children. "I saw they have different prices at different places for the same product. It's very confusing. We have to rethink everything."