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Germany (Deutschland)

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Title: Germany (Deutschland)


1
Germany (Deutschland)
  • Christopher Schmidt
  • Darci Child
  • James Cordell
  • Amir De la Vega

2
The Plan
  • History Demographics
  • Current Situation
  • International Aspects
  • Special Problems
  • The Future

3
History Demographicsby Christopher Schmidt
4
World War I (1914-1919)
  • Germany part of unsuccessful Central Powers
  • Treaty of Versailles (1919)
  • The War Guild Clause Article 231
  • Germany held solely responsible for all loss and
    damage suffered by Allies
  • Large portions of Germany divided among Allies
  • Reparations of 6.6 billion pounds

5
German Revolution Weimar Republic (1918-1933)
  • November 1918 German Revolution breaks out
    Republic proclaimed
  • August 11, 1919 Weimar Constitution in effect
  • German Communist Party established same year

6
German Revolution Weimar Republic (1918-1933)
  • January 1919 German Workers Party (Nazis)
    created
  • 1920s Political unrest caused by world-wide
    depression harsh peace conditions dictated by
    Treaty of Versailles
  • January 29, 1933 Adolf Hitler named Chancellor
    of Germany

7
World War II (1939-1945)
  • Sept. 1, 1939 Germany launches blitzkrieg on
    Poland
  • Sept. 3, 1939 Britain France declare war on
    Germany
  • June 22, 1941 Germany breaks pact with Soviet
    Union
  • Dec. 11, 1941 Germany declares war on the US
  • May 8, 1945 Germany surrenders

8
Division Reunification (1945-1990)
  • Germany Berlin divided into 4 military
    occupation zones

9
Division Reunification (1945-1990)
  • May 23, 1949 Federal Republic of Germany (West
    Germany) created
  • October 7, 1949 German Democratic Republic
    created by the Soviet Zone

10
Division Reunification (1945-1990)
  • Nov. 1989 Border restrictions unexpectedly eased
  • Oct. 3, 1990 Germany reunified

11
Today
  • Germany is a democratic parliamentary federal
    republic made of 16 states
  • Capital is Berlin
  • Land Area of 357,000 km2

12
Demographics
  • Population 82.4 million
  • Ethnic Groups Germans Turks
  • Religions Protestant Roman Catholic
  • Language Standard German English
  • Literacy over 99

13
Current Economic Situationby Darci Child
14
Historic Development of Germanys Economic System
  • Following WWII, Germanys land, homes, and
    property were ruined. Millions of people didnt
    have anything to eat or wear
  • Economic and political leaders wanted to position
    Germany on a new path. They wanted a new
    economic system that would give everyone equal
    opportunities as well as economic prosperity.

15
  • Ludwig Erhard took control over Germanys
    postwar opportunity. He was given his chance by
    the United States officials.
  • Ludwig Erhards first step was to create a new
    currency on June 21, 1948
  • the currency reform established the foundations
    of the Western German economy
  • Erhard put an end to most Nazi and occupation
    rules and regulations in order to establish a
    free economy
  • The Germans started calling their new economy a
    social market economy

16
  • The West German boom began in 1950.
  • by 1960 industrial production had more than
    doubled the levels in 1950
  • GDP rose by two thirds during the same decade.
  • The number of people employed rose from 13.8
    million in 1950 to 19.8 million in 1960 and
    unemployment fell

17
  • During the 1960s economic growth slowed down.
  • In 1967 the Bundestag passed the Law for
    Promoting Stability and Growth, known as the
    Magna Carter of medium-term economic management.
  • This law provided for coordination of federal,
    land, and local budget plans in order to give
    fiscal policy a stronger impact.
  • During the next fifteen years, Germany faced
    fluctuations in growth

18
  • In 1982, the government began to implement new
    policies to reduce the government role in the
    economy
  • The governments objectives were
  • 1) to reduce the federal deficit
  • 2) to reduce government regulations
  • 3) improve the flexibility and performance
    of the labor market.
  • Finally during the late 1980s West Germanys
    economy began to grow more rapidly.

19
Unification
  • On July 1, 1990 the Western German economy and
    the eastern Germany economy unified and became
    one economic and political union
  • During the first phase of unification, eastern
    Germany went into a deep recession while Western
    Germany experienced a boom in their economy.

20
  • Many easterners started going to the work in the
    West.
  • By the end of 1990, about 250,000 people from the
    east were commuting to the west.
  • By the middle of 1991 this number grew to almost
    400,000
  • Western Germanys capital also increased
    significantly as eastern German deposits were
    placed in western German banks

21
  • This sudden boom in Western Germany brought about
    the following problems
  • 1) The financial shifts from eastern Germany to
    western Germany caused an over supply of money
  • 2) Government deficits grew from large
    expenditures in Eastern Germany
  • 3) Inflationary effects of the rapid growth rate

22
  • In response, the Bundesbank raised interest
    rates, and after time the western German economy
    slowed down
  • the 1992 depression continued into 1993 when the
    economy reached a negative growth rate of -1.2
  • By 1994 German growth resumed at an annual rate
    of about 2.4

23
  • In the last ten years, since the unification
    process, progress has been made in raising the
    standard of living in eastern Germany,
    introducing a market economy and improving
    infrastructure there.
  • Eastern Germany still lags behind Western
    Germany. Eastern Germanys unemployment is
    almost twice as high. Consumption and
    productivity levels are lower in eastern Germany.

24
Germanys Current Economic System Social Market
Economy
  • The model of the social market economy is
    designed to allow market forces to reign free
    within certain limits and to prevent unsocial
    outgrowths of market development. The supply of
    goods is increased and diversified the providers
    are motivated to be innovative
  • income and profits are distributed based on
    individual performance.
  • ensures participation by employees in basic
    economic decisions and their participation in
    social achievements.

25
  • Germany has the worlds third strongest national
    economy
  • leading position in terms of its total economic
    output
  • highest gross domestic product and the largest
    number of inhabitants in European Union
  • most important market in Europe.
  • Germany has qualified and motivated employees, an
    internationally recognized education system, a
    well developed infrastructure, and top
    achievements in Research and Development

26
Industry
  • Germany is one of the worlds leading industrial
    nations. In the last few years, Germanys
    industry has boomed. Germany now holds a leading
    position in the international markets.
  • The 49,000 German industrial undertakings employ
    nearly 6.4 million staff.

27
  • the services sector in Germany is growing and is
    almost as large as its industry
  • Germany is the worlds third largest automobile
    producer, with more than 70 percent of vehicles
    produced intended for export.

28
  • Germany is also a world leader in the chemical
    industry
  • The growth of information technology and
    bio-technology is above average

29
  • The trade fair business is one of the leading
    service sectors of the German economy.
  • Germany is the worlds number one venue in
    hosting international trade fairs
  • About two thirds of the worlds leading trade
    fairs for individual sectors take place in
    Germany
  • 1) Hanover Trade Fair (the worlds largest
    industrial trade fair)
  • 2) Frankfurt Book Fair
  • 3) Computer fair CeBIT
  • 4) International Motor Show (IAA)

30
International Aspectsby James Cordell
31
Exporting
  • Germany is the world leader in exporting goods
  • In 2003 Germanys foreign trade surplus totalled
    129 billion euros
  • Its closest trade relations are with members of
    the European Union
  • Nearly 72 percent of German exports remain within
    Europe

32
Exports
  • Export Partners
  • France 10.2
  • U.S. 8.8
  • U.K. 7.9
  • Italy 6.9
  • Netherlands 6.1
  • Belgium 5.6
  • Austria 5.4
  • Spain 5.1

33
Exports
Rank Country Exports Date of Information
1 World 10,330,000,000,000 2004 est.
2 European Union 1,318,000,000,000 2004
3 Germany 1,016,000,000,000 2005 est.
4 U.S. 927,500,000,000 2005 est.
5 China 752,200,000,000 2005 est.
6 Japan 550,500,000,000 2005 est.
7 France 443,400,000,000 2005 est.
8 United Kingdom 372,700,000,000 2005 est.
9 Italy 371,900,000,000 2005 est.
10 Netherlands 365,100,000,000 2005 est.
34
Exports
  • Main Exports
  • Machinery
  • Vehicles
  • Chemicals
  • Metals and Manufactures
  • Foodstuffs
  • Consumer Electronics
  • Textiles
  • Beer

35
Imports
  • Import Partners
  • France 8.7
  • Netherlands 8.5
  • U.S. 6.6
  • China 6.4
  • U.K. 6.3
  • Italy 5.7
  • Belgium 5
  • Austria 4

36
Imports
Rank Country Imports Date of Information
1 World 10,330,000,000,000 2004 est.
2 United States 1,727,000,000,000 2005 est.
3 European Union 1,402,000,000,000 2004
4 Germany 801,000,000,000 2005 est.
5 China 631,800,000,000 2005 est.
6 United Kingdom 483,700,000,000 2005 est.
7 France 473,300,000,000 2005 est.
8 Japan 451,100,000,000 2005 est.
9 Italy 369,200,000,000 2005 est.
10 Netherlands 326,600,000,000 2005 est.
37
Imports
  • Main Imports
  • Machinery
  • Vehicles
  • Chemicals
  • Foodstuffs
  • Textiles
  • Metals

38
International Trade Organizations
  • G8
  • European Union

39
G8
  • Group of Eight
  • Consists of Canada, France, Germany, Italy,
    Japan, Russia, the United Kingdom and the United
    States
  • Represents about 65 of the world economy

40
G8
  • G8 Summit held once per year
  • Rotating yearly presidency
  • Discuss international trade and economics

41
European Union
  • Consists of 25 member nations
  • Germany a founding member
  • Germany helped found European Coal and Steel
    Community, a precursor to the EU, in 1951
  • Has total GDP of 13,539,374,000,000
  • Free trade among member states

42
Special Problems The Futureby Amir De la Vega
43
Special Problems
  • Socialist Labor/Consumer environment
  • Weak Domestic Demand causes sluggish growth
  • High Tax wedge on Labor Income
  • Low incentive to work
  • Extensive Social Protection
  • Rigid Employment Protection causes a lack of
    demand for labor
  • Protection incurs high non-wage Labor Costs (high
    unemployment rates)

44
Special Problems cont.
  • After reunification a system of wage negotiations
    was created
  • Compressed wage scales for lower paying jobs
  • The difference in pay for workers is narrower in
    Germany than in the US
  • Reduced demand for low-skilled workers due to
    their higher wages compared to worldwide wages

45
Unique Characteristics
  • Manufacturing and Services are at the heart of
    the German economy
  • Geographical Location
  • Germany serves as an interface to new markets
    such as
  • Southern Europe
  • Eastern Europe
  • The new boundaries beyond the new European Union

46
Unique Characteristics
  • Economic effect of leading the world in exports
  • 1 in 3 euros are generated through exports and
    their revenues
  • Almost 1 in 4 jobs depend on manufacturing and
    servicing exports

47
Considerations
  • Germany currently has closest trade relations
    with
  • Members of the EU (Germany generates over half
    of its turnover in foreign trade)
  • France (In 2003 Germanys strongest trade
    partner)
  • USA
  • Great Britain

48
Considerations
  • Mercantilism
  • Germany is a perfect example
  • They thrive on increasing exports
  • The decreasing domestic demand due to social
    markets reduces imports thus increasing the trade
    surplus

49
The Future
  • GDP growth is forecasted to decline from 2.2 in
    2006 to 1.4 in 2007
  • Part of this is due to an increase in value-added
    tax rates
  • 3 hike will start in 2007 to reduce Germanys
    budget deficit to under 3 of GDP (EU limit)
  • 1/3 of VAT revenue will go to reduce employer
    taxes hoping it will cause a reduction in the 11
    unemployment rate
  • Tax hike may reduce recent consumption increase
  • GDP may recover to 1.9 in 2008

50
The Future
  • Outcomes on issues such as healthcare financing
    will play a big role in Germanys economic future
    as well.

51
Germany (Deutschland)
  • Questions?
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