Germany

GERMANY

A brief history...

The country we know as Germany today was throughout history mostly an association of states

Following the French revolution, the German states fought against Napoleon’s army

After the revolutions of 1848, the first German Parliament was created

After a victory in the French-Prussian war in 1871, a unification of the German states was attained, which initiated a period of great advances in various areas, the economy, the political area and the military. This is the time when Germany becomes one of the great world powers alongside the United Kingdom.

During the next two decades, the Bismarckian systems, which dominate the European politics, were established.

William II was crowned as Kaiser, which caused a confrontation with Bismarck. This was the source of the fall of the Chancellor.

In 1914, when World War broke out, the fall of the Hohenzollern dynasty started as Germany was defeated. The winning nations impose the Versailles Treaty and the German territory splits in two once more.

After the defeat, the Weimar Republic was initiated. There was an economic crisis and the German National Socialist Workers’ Party (Nazi) obtains the power doing away with democracy.

Nazi Germany lasted 12 years (1933-1945). Hitler got the full control succeeding also the head of state.

At first Germany had great military successes gaining control over countries in Europe Belgium, France, Denmark, The Netherlands, Luxemburg, Greece, The Balkans and Norway, Tunes and Libya in North Africa. But its attack on Russia in 1941 failed.

In spite of being one of the defeated countries, its economic recovery was quick after 1950 and it becomes the third economic world power.

Built in 1961, the Berlin Wall became known as a symbol of communism. It physically divided the Communist West Germany and Democratic East Germany.

In 1990 the four allied powers and the 2 federal states signed an agreement in Moscow to end the rights of the allied powers in Germany.

As a founding country, Germany had a main role in the constructions of the European Union.

Germany’s economy...

Germany has the largest population in the European Union with 81.8 inhabitants in January, 2010

3rd largest country in terms of immigrants from around the world

Has a land area of around 357,021 square kilometers and has maintained a high standard of living.

Germany is known for its well established social security system which stems from the flourishing German economy.

It ranks 4th in terms of nominal GDP and 5th in terms of purchasing power in the world.

Germany is the world’s second largest trader both in terms of imports and exports.

Germany is also the hub of global scientific and technological developments.

It is this strong and productive work force that enabled Germany to face recession with a resilient face and the Germany economy could manage to have a GDP (purchasing power parity) of $2.182 trillion in 2009

Even in the recession marred years, the German economy managed to stay stable as the world sixth largest country in terms of GDP (2009.)

However as is the case with recession, the economy did constrict and stood at -5% in 2009. The graph below shows how the real growth rate has performed since 2007 till 2009. (in percentage)

•The graph below shows how the German economy performed since 2007 till 2009.

The GDP per capita has been strong as well. In 2009, the per capita GDP was $34,200. In 2008, the per capita GDP was slightly higher at $35,900 and $35,500 in 2007.

However, the unemployment rate grew from 7.8% to 8.2% in 2009. This may be attributed to factors ranging from an industrial slow down to lesser imports for productivity.

G7, G8, G20Germany is part of the G-7, Group of Seven, G-8, Group of Eight, and G-20, Group of Twenty.

The economy’s success...

--THE DEUTSCHE MARK--

At the core of Germany's success and influence lies its currency.

The deutsche mark gave concrete expression to West Germany's international financial and economic success and also contributed to it.

Since unification, it has become even more important as a symbol as well as an instrument of Germany's new central role in Europe.

The success of the deutsche mark has been anchored in the success of West German exports.

The deutsche mark is not used as widely for transactions as it is to supply central-bank reserves. Global commodity prices are still largely denominated in United States dollars. Whatever the deutsche mark's strengths may be, it does not offer the kind of liquidity that the dollar does.

Invoicing in deutsche marks is concentrated on Germany's own commerce, but almost 15 percent of world trade is conducted on a deutsche mark basis.

Trade, import and export...

Germany has been one of the most active trading countries in the world.

Its trading relationship spans almost all the major trading countries in Europe and around the world.

For these reasons, Germany trade remains the largest in European Union and in the top 5 countries in the world for its trade volumes.

Germany’s trade is further helped by its innovation in solar power research and development. In fact, Germany is the largest producer of wind turbines and solar power technology.

In 2009, Germany exports were $1.187 trillion. The amount was lower than the previous year’s figures of $1.498 trillion.

The country ranked 3rd in the world in exports and continues to prove its strength as the world top economy.

Germany imports amounted to $1.022 trillion in 2009 and ranked 3rd in the world. The figures, understandably, were low due to recession. In 2008, the figures amounted to $1.232 trillion. 

Germany’s main exported and imported commodities are:

Machinery Vehicles Chemicals Metals and manufactures Foodstuffs Textiles

The main export and import partners of Germany are: 

France US Netherlands UK Italy Spain etc. Russia

The real strength of Germany trade has been its productive workforce which according to 2009 figures amounted to 43.51 million.

The manufacturing industries employed almost 29.7% of the work force and the growth helped Germany trade in terms of automobiles and machinery.

Germany’s industry...

The Germany industry sectors employ as much as 29.7% of the total work force.

The workforce helped the economy to rebound after the recession hit years with better productivity helped by rebounded demands and orders.

The industries along with other sectors will help the government to recover to almost 1.5% of the growth in 2010.

Germany also has a wide variety of well developed industries such as:

Iron Steel Coal Cement Vehicles Machine tools Electronics Food and beverages Shipbuilding Textiles

Germany’s manufacturing...

Manufacturing laid the foundation for the German economy.

The country is a member of the G-7 group, which represents world’s seven richest countries.

The German industry is well spread in the country as well. It helps to create employment opportunities and benefits due to the proximity of raw materials.

Several factors contributed so that Germany could prosper and dominate in the manufacturing segment.

Indisputably, Germany produces some of the finest automobiles in the world besides ships and tools.

Some of the most popular German industries include:

Bayer BMW Daimler Chrysler Deutsche Bank Deutsche Telekom Henkel Lufthansa Group Metro

The German industry sectors are well developed and poised to offer greater value around the world, thereby fortifying the country’s economy even in financially turbulent times.

Best practices...

Economic stimulus package...

An Economic Stimulus package is an attempt by the government to boost economic growth and lead the economy out of a recession or economic slowdown.

This economic stimulus package to Germany very broadly includes infrastructural investments, social benefits, tax concessions and soft loans.

A substantial portion of this German economic stimulus package, of about 17 – 18 billion, is in form of investments to be made in highway construction, educational spending, and tax cuts for individuals and businesses.

To increase disposable income among consumers health insurance rates have been cut thereby releasing an additional sum of €9 billion in their hands.

A further amount of €9 billion would be realized by process of reducing corporate and personal income tax from 15 percent to 14 percent. 

German government has allocated 100 billion towards loan for sick and recovering industries. This credit and guarantee fund would inspire upgrading of old manufacturing processes with updated technologies.

A one time bonus of €100 per child is being provided to families.

Economic issues...

Unemployment... Germany, which is Europe’s biggest

economy, saw a fall in the number of people out of work in January to 3.135 million.

Last year, Germany’s unemployment rate plunged to 7.7% from 8.2% in 2009 as a result of the Government initiative.

However, figures will fuel concern that Germany is facing a skilled labour shortage which threatens economic growth.

Inflation rate...

0.3% (2009 est.)  2.6% (2008 est.)

Economic problems

The Weimar Republic had some of the most serious economic problems ever experienced by any Western democracy in history. Rampant hyperinflation, massive unemployment and a large drop in living standards were primary factors. In 1923-29 there was a short period of economic recovery, but the Great Depression of the 1930s led to a worldwide recession. Germany was particularly affected because it depended heavily on American loans. In 1932, about 5 million Germans were unemployed. Many blamed the Weimar Republic. This was made apparent when political parties on both right and left wanting to disband the Republic altogether made any democratic majority in Parliament impossible

Berlin now...

Munich...

After world war II

After the world war II…

Germany now...