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West Germany agreed Monday to give East Germans a bigger share of Western wealth as their struggling nation is merged with its rich neighbor.

In a surprising concession, West Germany said it would exchange each virtually worthless East German mark paid to workers and pensioners for one strong West German mark.The 1-1 rate would apply to wages and pensions and to savings accounts of up to 4,000 marks ($2,300), said Dieter Vogel, spokesman for West German Chancellor Helmut Kohl. Savings of more than 4,000 marks would be traded at a 2-1 rate, as would East German private and corporate debts, Vogel said.

The East German government had demanded a 1-1 rate to protect workers from higher living costs in a unified Germany and the loss of huge subsidies that existed in the former socialist system.

East German political factions applauded the wage concession but criticized the limit on savings accounts.

West Germany opposition parties said the plan would cost billions and lead to inflation. Prices on the Frankfurt Stock Exchange plunged 2.5 percent, the sharpest decline in three months, after the announcement.

Anticipating the money merger, the East German state bank began moving sacks of out-of-circulation East marks out of storage in the East Berlin treasury Monday to make way for shipments of the West German mark.

An estimated 100 tons of currency was loaded onto trucks to be burned to make space for the West German currency, likely to become East Germany's official currency July 2. It already is used heavily in the country, being demanded by some restaurants and hotels.

In another step toward creating a single Germany, government sources in Bonn said Monday the four World War II Allies - the Soviet Union, United States, France and Britain - will meet with the two Germanys for the first ``two-plus-four' talks May 5 on the international implications of German unification.

Kohl made the proposal the day before he was to meet with East German Prime Minister Lothar de Maiziere in Bonn to discuss their differences on reunification.

It came amid reports that the number of East Germans fleeing their crumbling economy for West Germany is continuing at more than 4,000 a week.

The West German government's proposal is an ``important contribution' to ending the disagreements between the nations, East German government spokesman Mathias Gehler said.

But Wolfgang Ullmann, vice president of the East German Parliament, said: ``If this is the final decision, there should be sharp protest because a large part of savings will not be considered here.'

Both governments say they will merge their economies completely July 1 as a prelude to full unification, expected next year.

The East German mark is officially valued at 3-1 against the West mark but is worth almost nothing outside East Germany.

West Germany's central bank had proposed a 2-1 swap, saying a 1-1 exchange would dilute the value of the West German mark and possibly cause high inflation and rising interest rates.

But Vogel said the Bundesbank ``has fully accepted that this is a decision made by the federal government.'

``The Bundesbank has also accepted that the economically prettiest solution cannot always be taken,' he said.

Many West Germans, who vote in national elections Dec. 2, are worried they will bear the brunt of absorbing the crumbling East German economy.

Social Democrat Oskar Lafontaine, Kohl's likely opponent, accused the chancellor Monday of caving in to pressure from the East Germans.

But the left-leaning East German Social Democrats, who are allied with their Western namesakes, called the wage exchange ``a step in the right direction.'

East Germany's economy is in shambles after four decades of socialist central planning. The poor economy was one of the reasons why more than 500,000 East Germans migrated to West Germany last year.

The exodus helped cause the October revolt that brought down the former hard-line regime and led to the opening of the Berlin Wall.

The new democratic government elected March 18 has not been able to halt mass migration. The East German government news agency ADN said Monday that nearly 20,000 East Germans have migrated in April alone, giving a total of 167,093 since the beginning of the year.


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