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GERMAN HISTORY

Inside Germany’s secret Cold War cash bunker

For many years, the residents of the leafy town of Cochem in the German Rhineland went about their daily business with no idea they were living on a gold mine.

An underground passage in the former vault of the Bundesbank Bunker Museum in Cochem, western Germany. 
A photo taken on February 8th, 2022 shows an underground passage in the former vault of the Bundesbank Bunker Museum in Cochem, western Germany. From 1964 to 1988, up to 15 billion marks were stored in the top-secret facility to protect Germany from a national economic crisis in the event of hyperinflation caused by the Cold War. (Photo by Ina FASSBENDER / AFP)

During the Cold War, the German central bank stashed away almost 15 billion marks’ worth of an emergency currency in a 1,500-square-metre nuclear bunker beneath the town.

A closely guarded state secret, the currency was codenamed “BBK II” and intended for use if Germany was the target of an attack on its monetary system.

After the Cold War, the bunker passed into the hands of a regional cooperative bank and then a real estate fund. In 2016, it was bought by German couple Manfred and Petra Reuter, who turned it into a museum.

A staircase with a secret exit in the former vault of the Bundesbank Bunker Museum in Cochem, western Germany. (Photo by Ina FASSBENDER / AFP)

Today, with Russia’s invasion of Ukraine stoking fears of nuclear conflict, interest in the bunker is growing again.

“Many people we know have pointed out that we have a safe bunker and asked whether there would be room for them in case of an emergency,” said Petra Reuter.

On tours of the bunker, “questions are naturally asked about the current situation”, which feels like “a leap back in time 60 years”, she said. “The fears are the same.”

Inside, behind a heavy iron door, long corridors lead to decontamination chambers and offices equipped with typewriters and rotary phones.

Petra Reuter, owner of the Bundesbank Bunker Museum, walks through the working room in the former vault of the museum in Cochem, western Germany on February 8th, 2022. Photo by Ina FASSBENDER / AFP)

The main room consists of 12 cages where, for almost 25 years, some 18,300 boxes containing millions of 10, 20, 50 and 100 mark banknotes were stored up to the ceiling.

Hundreds of trucks
On the front, the banknotes were almost identical to the real deutschmarks in circulation at the time, but on the back they were very different.

Starting in 1964, the notes were delivered to the bunker by hundreds of trucks over a period of about 10 years, with no one suspecting a thing — not even the East German Stasi secret police.

The bunker was accessed via a secret passage from what was ostensibly a training and development centre for Bundesbank employees in a residential area of the town.

Cochem, located about 100 kilometres (60 miles) from the border with Belgium and Luxembourg, was chosen because it was such a long way from the Iron Curtain.

“The citizens of the community were astonished to discover this treasure, which had been hidden for so long near their homes,” said Wolfgang Lambertz, the former mayor of the town, which has around 5,000 inhabitants.

This picture shows a working room with decoding devices in the former vault of the Bundesbank Bunker Museum in Cochem, western Germany. (Photo by Ina FASSBENDER / AFP)

Along with the 15 billion marks stored in the bunker, just under 11 billion marks’ worth of the alternative currency was also stored in the vaults of the central bank in Frankfurt.

Altogether, this added up to around 25 billion marks — roughly equivalent to the total amount of cash circulating in the German economy in 1963.

Facsimiles of former banknotes of the substitute currency are pictured in the former vault of the Bundesbank Bunker Museum in Cochem, western Germany on February 8th, 2022. (Photo by Ina FASSBENDER / AFP)

Operation Bernhard
Perhaps an extreme measure to ward off a merely hypothetical attack, but the German authorities had been guided by lessons from history.

During World War II, the Nazis had launched “Operation Bernhard”, in which prisoners in concentration camps were forced to manufacture counterfeit pounds with the aim of flooding England with them.

“The most plausible explanation was probably the fear that counterfeit money would be smuggled through the Iron Curtain in order to damage the West German economy,” according to Bernd Kaltenhaueser, president of the Bundesbank’s regional office for Rhineland-Palatinate and Saarland.

This shows a picture of the original and substitute 100 Mark notes in the former vault of the Bundesbank Bunker Museum in Cochem, western Germany.  (Photo by Ina FASSBENDER / AFP)

But creating a backup currency today “would no longer make sense because there is less counterfeit money in circulation and there are fewer cash payments”, according to Kaltenhaueser.

In the 1980s, with the Cold War winding down and technology evolving, it was decided that the replacement currency no longer met Germany’s security standards.

By 1989, the year the Berlin Wall fell, all of the notes had been taken out of the bunker, shredded and burned.

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MONEY

Why German bank customers could soon pay less for their account

A major German bank is set to scrap fees on large balances - and a number of others look set to follow. Here's why people in Germany may be paying less for their savings or current account in the near future.

Why German bank customers could soon pay less for their account

What’s going on? 

Interest rates have been at rock-bottom levels for years, making it much harder for people to get returns on their savings.

In recent years, many banks have even been levying what’s known as negative interest rates on customers. If interest normally incentivises people to save by helping them to grow their money, negative interest basically does the opposite.

If you have a certain amount of money in the bank, your bank will charge you negative interest via a deposit holding fee, which will usually be a certain percentage of your balance.

With N26, for example, balances of over €50,000 are subject to a 0.5 percent fee each year. For a balance of exactly €50,000, that equates to €250 in bank charges just for keeping your money there. 

Some banks even charge a deposit holding fee for balances as low as €5,000 or €10,000 in a current account. 

On Tuesday, ING Deutschland became the first bank to announce that it would be scrapping negative interest rates for the vast majority of its customers.

From July 1st, new customers of ING will be able to deposit up to €500,000 in their account without being charged for it, while existing customers will automatically have the fee-free amount raised to €500,000 from the current €50,000. 

Now, it seems a number of other German banks are planning similar moves. 

Why is ING Deutschland ending the holding fee?

Not entirely out of the goodness of its own heart – though that doesn’t stop it being good news for customers.

The European Central Bank (ECB) is set to make a decision on interest rates in the bloc this July, and most people expect that the bank is poised to increase interest rates from minus 0.5 percent to zero. 

Since banks have basically been passing on the ECB’s fees to their own customers, a hike in the ECB’s interest rate would spell the end of most negative interest-rate accounts in any case. But ING Deutschland said it wanted to pass on the positive interest rate trend to its customers even earlier.

READ ALSO: EXPLAINED: How to save money on your taxes in Germany

“With the increase in the fee-free allowance for credit balances on the current and extra accounts, the deposit fee is no longer applicable for 99.9 percent of our customers,” said Nick Jue, chief executive officer of ING in Germany. “We were one of the last banks to introduce a deposit holding fee and one of the first to virtually abolish it.”

He added that the bank had already kept its promise to abolish the holding fee for almost all customers before the European Central Bank made its decision.

Does this have anything to do with that court decision on bank charges?

That’s definitely a factor. According to a decision in Germany’s Federal Supreme Court last year, credit institutions have to obtain the consent of their customers when making changes to their fees and conditions.

That means that financial institutions have to ask for consent to current fees retrospectively if they don’t want hoards of people trying to claim their money back.

If a customer doesn’t consent to the fees, the bank will usually close that customer’s account.

Man signs a contract

A man in a suit fills in an official form. Photo: picture alliance/dpa/Pixabay | hnw-Gruppe

According to ING Deutschland, the scrapping of negative interest rates on balances up to €500,000 may help to sway those customers who have not yet agreed to the latest terms and conditions – including the deposit holding fee.

Anyone who agrees to the Ts&Cs will automatically be given the higher allowance as of July 1st.

“ING Deutschland expects that the increase in the allowances will convince in particular those customers who have not yet agreed to the General Terms and Conditions including the holding fee, and that the bank will thus terminate fewer customers than last planned,” ING said in a press release. 

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What other banks are planning to do this?

According to reports in Bild and Bialo, the other banks planning on ending negative interest rates (or raising the threshold for fee-free balances like ING Deutschland has done) include:

  • Deutsche Bank
  • Commerzbank
  • Deutsche Apotheker- und Ärztebank (Apobank)
  • Dortmunder Volksbank
  • Hamburger Sparkasse (Haspa
  • Frankfurter Sparkasse
  • Frankfurter Volksbank
  • Mittelbrandenburgische Sparkasse
  • Nassauische Sparkasse (Naspa)
  • Ostsächsische Sparkasse Dresden
  • Sparda-Bank München
  • Sparda-Bank Südwest
  • Sparda-Bank West
  • Sparkasse Hannover
  • Sparkasse Pforzheim Calw
  • Volksbank Stuttgart

What does this mean for my savings?

There’s good news and bad news.

The good news is that, from July, you’ll no longer have to pay exorbitant charges just to store your money in a safe place – and you won’t be penalised for saving more. The bad news, on the other hand, is that low interest rates aren’t going away anytime soon.

So while you won’t be losing money hand over fist, you won’t be earning much of a return on your savings either.

Banks in Frankfurt

Skyscrapers in the financial district of Frankfurt am Main. Photo: picture alliance/dpa/dpa-Zentralbild | Fernando Gutierrez-Juarez

“If the interest rate environment continues to develop positively, we will also let our customers participate in this development,” said ING Deutschland’s Nick Jue. “However, the low-interest phase will continue for the time being and broadly diversified investments will remain important.”

Getting a securities account where your money is invested is one way to try and grow your savings, as is investing in property.

Of course, people with mortgages and other loans benefit from the low interest rates – which could be why the German property market is currently booming. 

READ ALSO: Five ways Germany’s soaring inflation could affect your life

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