Spendthrift Germans raid piggy banks rather than putting faith in the euro

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The Independent Online

The tills are ringing merrily at KaDeWe; Berlin's top department store has not been blessed with so much seasonal cheer in years. Germany may be in a recession but its people are on the biggest shopping spree since the fall of the Wall. And KaDeWe, the consumer temple that drew a stampede of East Germans in those heady pre-Christmas days of 1989, has again been overrun.

The tills are ringing merrily at KaDeWe; Berlin's top department store has not been blessed with so much seasonal cheer in years. Germany may be in a recession but its people are on the biggest shopping spree since the fall of the Wall. And KaDeWe, the consumer temple that drew a stampede of East Germans in those heady pre-Christmas days of 1989, has again been overrun.

Psychologists had predicted national trauma as Germans parted solemnly with their beloved marks. No sign of that. Stores report buoyant sales; up last Saturday by 10 per cent or more compared with a year ago. On the same day, 1.5 million people thronged the narrow alleys of Berlin's Christmas market on Alexanderplatz.

The truth is, Germans are dumping the mark as fast as they can, frantically jostling with fellow shoppers and almost always paying with cash. Luxury items, especially, are in demand: watches, jewellery and even cars and yachts. Estate agents dealing in Spanish property are rushed off their feet. The nation has been gripped by panic buying.

Some is fuelled by the widely held fear that the new money will not be worth as much as the old. But there is also mounting evidence that the approaching dawn of the euro is flushing out vast sums, hidden from the taxman for years in safes and under mattresses.

The clue comes not just from punters' eagerness to stump up wads rather than plastic, but also from the quality of the notes. Store assistants say they have never seen so many crisp DM1,000 bills – worth about £320 each – as now, in the dying days of the currency.

There is a tradition in Germany of storing the family fortune in cash. People in the north swear that southerners' favourite pastime is counting their money. Now the secret hoards are being raided, their contents blown on consumer durables or even frivolous items deemed to hold their value.

That so many Germans prefer to deposit their last marks at the stores rather than at banks where they would metamorphose into euros on 1 January does not say much for confidence in the new currency. But what is also clear is that much of the dosh now surfacing has never been near a bank for good reason. The Bundesbank reckons up to DM100bn is sloshing about in the black economy. Banks are obliged to inform the dreaded Finanzamt – local tax office – of every deposit exceeding DM30,000. A dodgy plumber or politician was unlikely to take such a chance with his ill-gotten gains. But now there is nowhere to hide. With the mark ceasing to be legal tender in less than three months, all this cash is beginning to burn holes in its owners' hands.

So off they go to the nearest jewellery store or car showroom, or they take a trip to Switzerland or Luxembourg, where the banks are much friendlier. The borders are heavily guarded; customs officials have been told to look out for well-healed motorists bearing attaché cases. Their vigilance has been richly rewarded. The figures for November are not yet in, but twice as much suspect cash was seized at the frontiers in October than in the corresponding month last year. Money is clearly taking flight.

Shopkeepers, meanwhile, are rejoicing at the slaughter of the nation's piggy banks. A massive publicity campaign has been urging citizens to get rid of their coins before the expected last-minute rush.

The Bundesbank had calculated there was DM8bn of "sleeping money" – coins idling forgotten in jam jars and abandoned coat pockets. In reality, more than DM9bn of coins have already been traded in at banks.

All the monetary activity just goes to show that the doom-mongers will find little joy in Germany. For when Germans want something badly, they usually succeed. And they are absolutely desperate to get rid of their marks.

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