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Achtung…

Achtung…. A Brief History of Germany. 1400 years in four slides. Retrieved from Wikipedia on 11-24-2006: http://en.wikipedia.org/wiki/History_of_Germany . Photos retrieved from Google images on 11-27-2006. 600-1700. 600-800 A.D. Centralized Germanic tribal control Spread of Christianity

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Achtung…

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  1. Achtung…

  2. A Brief History of Germany 1400 years in four slides Retrieved from Wikipedia on 11-24-2006: http://en.wikipedia.org/wiki/History_of_Germany. Photos retrieved from Google images on 11-27-2006.

  3. 600-1700 • 600-800 A.D. • Centralized Germanic tribal control • Spread of Christianity • Charlemagne • 800: Holy Roman Empire • 800-1300 A.D. • Expansion of the Empire • Vast colonization ensues • 1300-1700 • The Black Death • Papal authority challenged • Money-based economy--Mercantilism emerges • 1500s: Luther, the Reformation, and Counter-Reformation • 1600s: The Thirty-Years’ War • The Holy Roman Empire stumbles Retrieved on 11-27-2006 from http://corndancer.com/vox/aer/aer_art/map01_1648.jpg

  4. 1700-1900 • 1700-1900 • Revolution and war divide Europe • 1806: Holy Roman Empire dissolves • 1814: The German Confederation • Political controls • Customs unions begin to lower trade barriers • 1848: The national German constitution is written • 1867: The German Confederation is dissolved • 1871: The German Empire is founded • Discrimination and suppression • Socialist Workers’ Party opposed • 1870s: Initial alliances between nations Retrieved on 11-27-2006 from http://en.wikipedia.org/wiki/Image:Flag_of_the_Holy_Roman_Empire_(1200-1350).svg

  5. 1900-1945 • 1900-1940 • The alliances change • German expansionist threats • 1914: World War I begins • 1919: Treaty of Versailles • German Communist Party and German Workers’ Party gain traction • Early 1920s: Hyperinflation • 1925: Hindenburg elected President, Hitler emerges • 1929-1932: The Great Depression • 1933: Hitler is appointed as Chancellor • Totalitarian state is enacted • 1940-1945 • World War II sees the rise and fall of Hitler’s regime and the effects of the Holocaust Retrieved on 11-27-2006 from http://todaysseniorsnetwork.com/World%20War%20II%20soldiers%20training.jpg

  6. 1945-Present • 1945-Present • Germany nearly collapses • East and West Germany are created • U.S. aids reconstruction • East Germany joins Soviet Union • 1950s: Currency reform, NATO, EEC • 1970s: East and West Germany join the U.N. • 1989: The Berlin wall falls, and Germany is reunited • 1990s: Germany becomes a leader in the cause of the European Union

  7. Germany’s Current Situation Retrieved on 11-27-2006 from http://www.calvin.edu/academic/german/images/scenic/cliff.jpg

  8. The European Union • Along with Belgium, France, Italy, Luxembourg and the Netherlands, Germany founded the European Union in 1957. • As it stands today, if the countries of the European Union were combined, they would account for the largest GDP in the world. • Germany is the most powerful country in the EU in terms of economic viability.

  9. World Economic Standing • Germany, alone, is the third largest country in terms of USD exchange rate, fifth largest in terms of purchasing power. • Only the United States and Japan have more powerful economies than Germany. Retrieved on 11-27-2006 from http://www.piperreport.com/archives/Images/Dollar%20Squeezed.jpg

  10. Domestic Markets and Policy • Germany is a self-proclaimed social market society. • They enjoy the benefits of a free market and competition, but it is regulated by government policy. • Various social services are provided as well as many subsidies to selected sectors of the economy. • Heavily oriented towards exporting • More than 1/3 of Germany’s GDP is from exports** • France and the US • Since 2003, Germany exports more than an other country in the world. • German policy makers encourage further economic integration. Retrieved on 11-27-2006 from http://www.phillips-export-training.co.uk/images/world.jpg

  11. Primary Sectors • Energy: • Fifth largest consumer of energy. However, they import more than 2/3 of the energy they use.** • Industry: • Accounts for 25% of GDP • Employs 26.4% of the German workforce • Services: • Tourism, Financial Services, and Media/Advertising accounts for around 70% of Germany’s GDP. • Instead of having a financial economy dominated by the stock market, Germany is a bank oriented system.

  12. Economic Trends GDP growth rate from 2002 – 2005** • 2002: +.2% • 2003: -.3% • 2004: +1.6% • 2005: +.9% ** Variability is in large part due to the effort to fuel the formerly Communist East Germany** • Balance of payments and currency • Trade balance: positive $54.9 billion. • By recently changing from the Deutschemark to the Euro, the Bundesbank gave up much of its power to the European Central Bank which now conducts monetary policy for the entire EU. ** Retrieved on 11-27-2006 from http://www.beuermann.de/agency/ezb/ezb_04.jpg

  13. Tale of Two Cities • Since the 1990’s, East and West Germany have been trying to successfully integrate. However, the predicament is much like it was before the union. • Unemployment Rate: For West Germany it is approximately 12%. For East Germany it is closer to 20%. • Gross Domestic Product: West Germany produces around 70% of the nation’s output, while East Germany produces only 30%. ** As a result of the disparity of wealth between West and East Germany, many East Germans migrate to the west looking for work. Retrieved on 11-27-2006 from http://www.maps-of-germany.co.uk/images/east-west-Germany-small.gif

  14. International Aspects

  15. Brief Overview • International Organizations - Germany is a member of the EU, WTO, and the OECD. • U.S. Relations - The United States is Germany's second-largest trading partner, and U.S.-German trade continues to grow. • International Trade - Germany is the world’s leading merchandise exporter. They are also committed to reducing trade restrictions. • Foreign Investment - Germany follows a liberal policy toward foreign investment.

  16. European Union • In 2003, Germany conducted slightly more than half of its trade within the then 15-member EU. • Germany’s currency is the euro. (The European Central Bank is located in Frankfurt, Germany.)

  17. German-U.S. Relations • Two-way trade in goods and services totaled $88 billion in 2000. (U.S. exports to Germany were $29.2 billion while U.S. imports from Germany were twice as high, $58.7 billion.) • At $29.5 billion, the U.S. trade deficit with Germany is the United States' fourth-largest

  18. International Trade Facts • German companies derive one-third of their revenues from foreign trade to compensate for reduced domestic demand. • In 2003, Germany imported $601.4 billion of merchandise, while imports of goods and services totaled $773.4 billion. • Also in 2003, Germany exported $748.4 billion of merchandise, while exports of goods and services totaled $873.3 billion.

  19. Germany's main exports (Totaled $1.016 trillion in 2005) - • Machinery • Vehicles • Chemicals • Metals and Manufactures • Foodstuffs • Consumer electronics • Textiles • Beer • Germany's main imports are (Totaled $801 billion in 2005) - • Machinery • Vehicles • Chemicals • Foodstuffs • Textiles • Metals

  20. Foreign Investment • In 2003, net foreign direct investment was $11 billion. • From 1995 to 1999, annual average flows of U.S. direct investment in Germany were $3.4 billion, while those of German investors in the United States reached $21 billion. • Americans accounted for 18% of all foreign direct investment in Germany during 1998-99, the third-largest source after France and the UK.

  21. Challenges and Obstacles

  22. Unemployment • Current unemployment is at about 8 percent. • Inflexible labor market is the main cause. • Increased cost of hiring makes reducing unemployment difficult • Little to no incentive for unemployed Germans to find a job. Retrieved on 11-27-2006 from http://newsimg.bbc.co.uk/media/images/40758000/gif/_40758670_germany_unemploy_gra203.gif

  23. National Trade Deficit • GDP declined earlier this decade • EU set a deficit limit at 3 percent which Germany is fast approaching • Interest rates and money supply growth are determined by the European Central Bank rather than German banks.

  24. An Aging Population • Because of the increased number of retirees, German government must spend more on social welfare programs. • This will result in higher taxes and fewer benefits for the retired.

  25. Special Problems • Decreasing Quality of Education • Free education • University administrations share decision-making with businesses that are connected with the university. This results in inflexible decision-making.

  26. Germany and the Future Retrieved on 11-27-2006 from http://www.lsus.edu/ba/germany/photos/schloss_lg.jpg

  27. Domestic Future • This year Germany's economy is expected to grow by less than 1%. Next year it might manage about 1.5% • Needs to decrease high unemployment rate and increase the weak domestic demand • As they tighten their belts, Germany's savings rate has reached a staggering 11%. • Germany’s seasonally adjusted national unemployment rate increased to 12% (March 2005)

  28. Ways to Improve the Domestic Future • Reforms of product market regulation would boost consumer confidence • By making regulation of domestic goods and service markets more competition-friendly • Increasing real wages, employment and productivity growth • Supporting small and medium-sized enterprises that are the backbone of Germany's economy • Government sector involvement in business sector activities needs to be scaled down further • Privatization of public sector enterprises should be accelerated • Telecom, energy and railway industries provides an opportunity to accelerate the pace at which genuine competition develops

  29. Ways to Improve International Competitiveness   • The complex tax system; restrictive labor laws; rampant bureaucracy; and high social security and healthcare costs make an entrepreneur's life very difficult • Lessen administrative burden on foreign market entrants • Keep its export-oriented economy • Do something with its stagnating wages

  30. Questions?

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