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Overview Political environment Economic environment Social environment Technological environment Summary

Overview Political environment Economic environment Social environment Technological environment Summary. Agenda. Germany in figures. Area: 356,970 km 2 Population: 82.4m (i.e. 231/km 2 ) Main Cities: Berlin (3.4m) , Hamburg (1.7m) , Munich (1.2m) GDP: 1,984bn EUR (2002)

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Overview Political environment Economic environment Social environment Technological environment Summary

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  1. Country ReportGERMANY

  2. Overview • Political environment • Economic environment • Social environment • Technological environment • Summary Agenda 21 May 2003

  3. Germany in figures • Area: 356,970 km2 • Population: 82.4m (i.e. 231/km2) • Main Cities: Berlin (3.4m), Hamburg (1.7m), Munich (1.2m) • GDP: 1,984bn EUR (2002) • Inflation: 1.0% (April 2003) • Unemployment rate: 10.8% (April 2003) Overview 21 May 2003

  4. Overview • Political environment • Economic environment • Social environment • Technological environment • Summary Agenda 21 May 2003

  5. System of government • Federal Republic of Germany (constituted of the united Germany on 3 October 1990) • 3 levels of government: • Federal: bicameral with the Bundestag (Federal Assembly) and the Bundesrat (Federal Council) both responsible for national laws, e.g. taxation • States (Laender): own constitutions, governments and parliaments - running of own facilities, e.g. education and hospital • Local: relatively large power (e.g. levy business tax) Political environment 21 May 2003

  6. Political parties • Main parties: SPD, CDU/CSU, Greens, FDP and PDS • Social democratic-Greens Party coalition since October 1998 led by chancellor Gerhard Schroeder (small majority since 2002) • Great influence of the opposition in the Bundesrat Political environment Bundestag 21 May 2003

  7. Outlook • Budget deficit (Maastricht treaty reference) • Tax outfall (126bn EUR till 2006) • Rising of taxes, e.g. tobacco tax by 1 EUR • Unemployment • Social system costs (Health, pension and unemployment insurance) • "Agenda 2010" introduced by Schroeder in March 2003: Broad reform package for the labour market, social system, economy, finance and education • Nevertheless likely that the current coalition remains in power till 2006 Political environment 21 May 2003

  8. Overview • Political environment • Economic environment • Social environment • Technological environment • Summary Agenda 21 May 2003

  9. GDP growth Economic environment Quarterly % change on the previous year (at prices from 1995) Source: Federal Statistical Office Germany. 21 May 2003

  10. Consumer price index Economic environment Change in % (Index 100 = 2000, seasonally adjusted value) Source: Federal Statistical Office Germany. 21 May 2003

  11. Unemployment • Unemployment rate (total): 10.8%, i.e. 4.5m(April 2003) • Old states: 8.6%, i.e. 2.8m (Trend: ) • New states: 19.1%, i.e. 1.7m (Trend: ) • Rising long-term unemployment (currently: 1.5m) Unemployed(in 1,000) Economic environment Source: Federal Statistical Office Germany. 21 May 2003

  12. Comparative economic indicators, 2001 Economic environment Sources: Economist Intelligence Unit, Country data. 21 May 2003

  13. EUR/USD Economic environment Source: Finanztreff.de. 21 May 2003

  14. "Mittelstand" • Companies with sales less than 50m EUR and employees less than 500 • Share of the Mitttelstand among the • Companies (2000): 99.7% • Turnover (2000): 43.2% • Employment (2000): 69.7% • Gross value added (1999): 48.8% • Great importance for the German economy Economic environment Source: IFM, Bonn. 21 May 2003

  15. Trends • 2nd largest export country in the world But • Remaining strong EUR reduces growth • Tax burden still high, e.g. non-wage labour costs of about 50%, and constrict investments • Large influence of labor unions • Tumbling world economy • 0.2% decrease of GDP of in Q1/2003 enforces speculation of a recession Economic environment 21 May 2003

  16. Overview • Political environment • Economic environment • Social environment • Technological environment • Summary Agenda 21 May 2003

  17. Demographic structure • Population: 82.2m • Shrinking to 78m (2030) and 70m (2050) • Ageing population • Falling fertility • Growth: 0.26% (2002 est.) • Immigration policies(currently 8.9% foreigners) Social environment Source: Federal Statistical Office Germany. 21 May 2003

  18. Social system costs Social environment Source: FAZ.net. 21 May 2003

  19. Overview • Political environment • Economic environment • Social environment • Technological environment • Summary Agenda 21 May 2003

  20. eCommerce and Technology • World's most technologically advanced telecommunications systems • Internet user: 32.1m (2002) • eCommerce growth held back by privacy issues and concerns about credit-card security • EIU e-readiness ranking (2003): 13th (out of 60) • R&D is well developed, but has a lack of competitiveness in high-tech Technological environment 21 May 2003

  21. Overview • Political environment • Economic environment • Social environment • Technological environment • Summary Agenda 21 May 2003

  22. Does Germany remain the sick man in Europe? • "Agenda 2010" is unlikely to pass without major changes under the pressure groups • Recessionary tendencies in 2003 • IMD World Competitiveness Ranking (2003): 5th(previous year ranked 4th) • Immediate sharp reforms and another attitude to our problems are needed Summary 21 May 2003

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