Economy of Germany
Encyclopedia
Germany is the largest national economy in Europe
, the fourth-largest by nominal GDP in the world, and fifth by GDP (PPP) in 2008. Since the age of industrialisation
, the country has been a driver, innovator, and beneficiary of an ever more globalised economy. Germany
is the world's second largest exporter with $1.120 trillion, €750 billion exported in 2009 (Eurozone
countries are included). Exports account for more than one-third of national output.
Germany is relatively poor in raw materials. Only lignite
and potash
salt are available in economically significant quantities. Power plants burning lignite are one of the main sources of electricity in Germany. Oil
, natural gas
and other resources are, for the most part, imported from other countries. Germany imports about two thirds of its energy.
The service sector
contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Most of the country's products are in engineering, especially in automobiles, machinery, metals, and chemical goods. Germany is the leading producer of wind turbines and solar power technology in the world. The largest annual international trade fairs and congresses are held in several German cities such as Hanover
, Frankfurt
, and Berlin
.
Of the world's 500 largest stock market listed companies measured by revenue
, the Fortune Global 500
, 37 are headquartered in Germany. In 2010 the ten largest were Volkswagen
, Allianz
, E.ON
, Daimler, Siemens
, Metro
, Deutsche Telekom
, Munich Re
, BASF
, and BMW
. Other large German companies include: Robert Bosch
, ThyssenKrupp
, and MAN (diversified industrials); Bayer
and Merck
(pharmaceuticals); Adidas
and Puma
(clothing and footwear); Commerzbank
and Deutsche Bank
(banking and finance); Aldi
, Lidl
and Edeka
(retail); SAP
(computer software); Infineon (semiconductors); Henkel
(household and personal consumer products); Deutsche Post
(logistics); and Hugo Boss
(luxury goods). Well known global brands are Mercedes Benz, BMW
, Adidas
, Audi
, Porsche
, Volkswagen
, DHL
, T-Mobile
, Lufthansa
, SAP
, and Nivea
.
Between 1991 and 2010, 40'301 mergers & acquisitions
with an involvement of German firms with a total known value of 2'422 bil. EUR have been announced. The largest transactions since 1991 are: the acquisition of Mannesmann
by Vodafone
for 204.8 bil. EUR in 1999, the merger of Daimler-Benz
with Chrysler
to form DaimlerChrysler
in 1998 valued at 36.3 bil. EUR, Deutsche Telekom
acquired VoiceStream Wireless Corp
for 30.8 bil. EUR in 2000, the sale of T-Mobile USA Inc
by Deutsche Telekom
to AT&T Inc for 27.6 bil. EUR in 2011.
, as measured by ILO
standards the German unemployment rate was 6.1 percent (compared with 7.2 percent as measured by German standards).
military power and economic autarky
, that is, economic independence from the global economy
.
Adolf Hitler
, believing that "the economy is something of secondary importance", left the details of the economic National Socialist Program
me out of Mein Kampf
. The Nazis rose to power while unemployment was very high, but achieved full employment
later thanks to massive rearmament. Their pre-war economic policies, resembling Keynesianism, were in the beginning the brainchildren of their non-Nazi Minister of Economics, Hjalmar Schacht
, who was later made to focus more on war production (cf: Military Keynesianism
), and was eventually replaced by a Nazi, Hermann Göring
.
The trading policies of the Third Reich aimed at discouraging trade with countries outside the German sphere of influence
, while making southern Europe largely dependent on Germany. Eventually, the Nazi party developed strong relationships with big business
and abolished trade union
s while real wages dropped by a fourth, and employees could not easily change employer. Taxes, though, were still low well into the war. Already before the war, people undesirable to the regime were used as slave labour
, and in 1944 they reached one quarter of the workers. Some like the British Marxist historian Timothy Mason
have argued that the Second World War was a direct effect of the German economic system, which made expansionism
necessary for domestic prosperity, indeed, survival; and which made Jingoism
necessary for the quelling of class conflict
s. Mason called the outbreak of World War II in 1939 a "flight into war" imposed on Hitler by an economic crisis.
of the Reichsmark
with the Deutsche Mark as legal tender, a lasting period of low inflation and rapid industrial growth was overseen by the government led by German Chancellor Konrad Adenauer
and his minister of economics, Ludwig Erhard
, raising West Germany from total wartime devastation to one of the most developed nations in modern Europe
.
Contrary to popular belief, the Marshall Plan, which was extended to also include Western Germany after it was realized that the suppression of the Western German economy was holding back the recovery of the rest of Europe, was not the main force behind the Wirtschaftswunder
. The amount of monetary aid (which was in the form of loans) received by Germany through the Marshall Plan (about $1.65 billion in total) was far overshadowed by the amount the Germans had to pay back as war reparations
and by the charges the Allies made on the Germans for the ongoing cost of occupation (about $2.4 billion per year). In 1953 it was decided that Germany was to repay $1.1 billion of the aid it had received. The last repayment was made in June 1971. It is arguable, however, that recovery would have been possible without the initial economic boost as well as the modernization of infrastructure provided by the economic recovery plan.
Apart from these factors, hard work and long hours at full capacity among the population in the 1950s, 1960s and early 1970s and extra labor supplied by thousands of Gastarbeiter
("guest workers") provided a vital base for the economic upturn.
By the early 1950s the Soviet Union had seized reparations in the form of agricultural and industrial products and demanded further heavy reparation payments. Lower Silesia
, which contained coal mines, and Stettin, a prominent natural port, were lost to Poland
.
Exports from West Germany exceeded $323 billion in 1988. In the same year, East Germany exported $30.7 billion worth of goods; 65% to other communist states. East Germany had zero unemployment.
In 1976 the average annual GDP growth was roughly 5.9%.
, the welfare system came under a lot of strain. This led the government to push through a wide-ranging programme of belt-tightening reforms, Agenda 2010
, including the labour market reforms known as Hartz I - IV
. In the latter part of the first decade of 2000 the world economy experienced high growth, from which Germany as a leading exporter also profited. Some attribute the Hartz reforms to the high German growth and declining unemployment, while others contend that it resulted in a massive decrease in standards of living, and that its effects are limited and temporary.
The nominal GDP of Germany contracted in the second and third quarters of 2008, putting the country in a technical recession following a global and European recession
cycle. German industrial output dropped to 3.6% in September vis-a-vis August. In January 2009 the German government under Angela Merkel approved a €50 billion ($70 billion) economic stimulus plan to protect several sectors from a downturn and a subsequent rise in unemployment rates. Germany exited the recession in the second and third quarters of 2009, mostly due to rebounding manufacturing orders and exports - primarily from outside the Euro Zone - and relatively steady consumer demand.
The following table lists the non-seasonally adjusted GDP growth in 1992-2009.
and France
, the capital city dominates the national economy. Germany - a federation -, on the other hand, does not have a single economic center: it is a polycentric country. Only 3 of Germany's 100 largest companies are headquartered in the capital Berlin. For example, the stock exchange is located in Frankfurt am Main, the largest Media company (Bertelsmann AG) is headquartered in Gütersloh
; the most important car manufacturers are in Wolfsburg
, Stuttgart
and München.
in the west, between Bonn
and Dortmund
. 27 of the country's 100 largest companies are located there. In recent years, however, the area, whose economy is based on natural resources and heavy industry, has seen a substantial rise in unemployment (2010: 8.7%). The economy of Bayern and Baden-Württemberg
, the states with the lowest number of unemployed people (2010: 4.5%, 4.9%), on the other hand, is based on high-value products. Important sectors are automobiles, electronics, aerospace and biomedicine, among others. Baden-Württemberg is an industrial center especially for automobile and machine building industry and the home of brands like Mercedes-Benz (Daimler), Porsche and Bosch. One reason for the low unemployment in Bayern with brands like BMW, Audi and Siemens is that the state started its economic rise later, after the Second World War, and does not have as many traditional industries, which are presently encountering problems due to competition from countries such as China
and India
, as well as the exhaustion of natural resources.
, which resulted in a temporary but significant drop of the standard of living of its citizens; interventionist economic planning ensured a quick return of the standard of living and a gradual increase up to the level of that of western Germany. Since reunification, hundreds of thousands of former East Germans have migrated into western Germany to find work. Drastic changes in the socioeconomic landscape brought about by reunification have resulted in troubling social problems. Economic uncertainty in eastern Germany is often cited as one factor contributing to extremist violence, primarily from the political right. Confusion about the causes of the current hardships and a need to place blame have found expression in harassment and violence by some Germans directed toward foreigners, particularly non-European
Even after the German reunification
in 1990, the standard of living
and annual income remains significantly higher in the former West German states. The modernisation and integration of the eastern German economy continues to be a long-term process scheduled to last until the year 2019, with annual transfers from west to east amounting to roughly $80 billion. The overall unemployment rate has consistently fallen since 2005 and reached a 15-year low in June 2008 with 7.5%. The percentage ranges from 6.2% in former West Germany to 12.7% in former East Germany.
(brown coal) and potash
salt (Kalisalz) are available in significant quantities. Oil, natural gas and other resources are, for the most part, imported from other countries.
The potash salt deposits are a result of the drying up of the Zechstein
sea, which 250 million years ago covered large parts of North and Central Europe. Potash salt is mined in the center of the country (Niedersachsen, Sachsen-Anhalt and Thüringen
). The most important producer is K+S AG (formerly Kali und Salz AG).
Germany's bituminous coal deposits were created more than 300 million years ago from swamps which extended from the present-day South England, over the Ruhr area
to Poland
. Lignite deposits developed in a similar way, but during a later period, about 65 million years ago. Because the wood is not yet completely transformed into coal, brown coal contains less energy than bituminous coal.
Lignite is extracted in the extreme western and eastern pars of the country, mainly in Nordrhein-Westfalen, Sachsen and Brandenburg
. Considerable amounts are burned in coal plants near to the mining areas, to produce electricity. Transporting lignite over far distances is not economically feasible, therefore the plants are located practically next to the extraction sites. Bituminous coal
is mined in Nordrhein-Westfalen and Saarland. Most power plants burning bituminous coal operate on imported material, therefore the plants are located not only near to the mining sites, but throughout the country.
, forestry
, and mining
accounted for only 0.9% of Germany’s gross domestic product (GDP) and employed only 2.4% of the population, down from 4% in 1991. Much of the reduction in employment occurred in the eastern states, where the number of agricultural workers declined by as much as 75% following reunification. However, agriculture is extremely productive, and Germany is able to cover 90% of its nutritional needs with domestic production. In fact, Germany is the third largest agricultural producer in the European Union after France and Italy. Germany’s principal agricultural products are potatoes, wheat, barley, sugar beets, fruit, and cabbages. Despite Germany’s high level of industrialization, almost one-third of its territory is covered by forest. The forestry industry provides for about two-thirds of domestic consumption of wood and wood products, so Germany is a net importer of these items.
Industry and construction accounted for 29% of gross domestic product in 2008, and employed 29.7% of the workforce. Germany excels in the production of automobiles, machinery, electrical equipment and chemicals. With the manufacture of 5.2 million vehicles in 2009, Germany was the world’s fourth largest producer and largest exporter of automobiles. German automotive companies enjoy a extremely strong position in the so called premium segment, with a combined world market share of about 90 %. Of vital importance is the role of small- to medium-sized manufacturing firms (Mittelstand
companies), which specialize in technologically advanced niche products and are often family-owned. It is estimated, that about 1500 German companies occupy a top three position in their respective market segment worldwide. In about two thirds of all industry sectors German companies belong to the top three competitors.
sources, such as solar, wind
, biomass
, hydroelectric, and geothermal
energy. As a result of energy-saving measures, energy efficiency
has been improving since the beginning of the 1970s. The government has set the goal of meeting half the country's energy demands from renewable sources by 2050.
In 2000, the government and the German nuclear power industry
agreed to phase out all nuclear power plant
s by 2021. The government reversed this decision in January 2010, electing to keep plants open. The crash of the Japanese nuclear plant Fukushima
in March 2011 however, changed the political climate fundamentally: Older nuclear plants have been shut down. And a general phase out until 2020 or 2022 is now probable. Renewable energy yet still plays a more modest role in energy consumption, though German solar and windpower industries play a leading role worldwide.
In 2009, Germany consumed energy from the following sources:
Renewable energy is far more present in the domestically produced energy, since Germany imports about two thirds of its energy.
There are 3 major entry points for oil pipelines: in the northeast (the Druzhba pipeline
, coming from Gdańsk
), west (coming from Rotterdam
) and southeast (coming from Nelahozeves
). The oil pipelines of Germany do not constitute a proper network, and sometimes only connect two different locations. Major oil refineries are located in or near the following cities: Schwedt
, Spergau
, Vohburg
, Burghausen
, Karlsruhe
, Cologne
, Gelsenkirchen
, Lingen
, Wilhelmshaven
, Hamburg
and Heide
.
Germany's network of natural gas
pipelines, on the other hand, is dense and well-connected. Imported pipeline gas comes mostly from Russia
, the Netherlands
and the United Kingdom
. Although gas imports from Russia have been historically reliable, even during the cold war
, recent price disputes between Gazprom
and the former Soviet states, such as Ukraine
, have also affected Germany. As a result, high political importance is placed on the construction of the Nord Stream pipeline, running from Vyborg
in Russia along the Baltic sea to Greifswald
in Germany. This direct connection avoids third-party transit countries.
With its central position in Europe, Germany is an important transportation hub. This is reflected in its dense and modern transportation networks. The extensive motorway (Autobahn) network that ranks worldwide third largest in its total length and features a lack of blanket speed limits on the majority of routes.
Germany has established a polycentric network of high-speed trains
. The InterCityExpress
or ICE is the most advanced service category of the Deutsche Bahn
and serves major German cities as well as destinations in neighbouring countries. The train maximum speed varies between 160 km/h and 300 km/h (100-185 mph). Connections are offered at either 30-minute, hourly, or two-hourly intervals.
Germany's achievements in sciences have been significant, and research and development
efforts form an integral part of the economy.
Germany is also one of the leading countries in developing and using green technologies. Companies specializing in green technology have an estimated turnover of 200€ billion
. Especially the expertise in engineering, science and research of Germany is eminently respectable.
The lead markets of Germany's green technology industry are power generation, sustainable mobility, material efficiency, energy efficiency, waste management and recycling
, sustainable water management
.
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
, the fourth-largest by nominal GDP in the world, and fifth by GDP (PPP) in 2008. Since the age of industrialisation
Industrialisation
Industrialization is the process of social and economic change that transforms a human group from an agrarian society into an industrial one...
, the country has been a driver, innovator, and beneficiary of an ever more globalised economy. Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
is the world's second largest exporter with $1.120 trillion, €750 billion exported in 2009 (Eurozone
Eurozone
The eurozone , officially called the euro area, is an economic and monetary union of seventeen European Union member states that have adopted the euro as their common currency and sole legal tender...
countries are included). Exports account for more than one-third of national output.
Germany is relatively poor in raw materials. Only lignite
Lignite
Lignite, often referred to as brown coal, or Rosebud coal by Northern Pacific Railroad,is a soft brown fuel with characteristics that put it somewhere between coal and peat...
and potash
Potash
Potash is the common name for various mined and manufactured salts that contain potassium in water-soluble form. In some rare cases, potash can be formed with traces of organic materials such as plant remains, and this was the major historical source for it before the industrial era...
salt are available in economically significant quantities. Power plants burning lignite are one of the main sources of electricity in Germany. Oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
, natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
and other resources are, for the most part, imported from other countries. Germany imports about two thirds of its energy.
The service sector
Tertiary sector of industry
The tertiary sector of the economy is one of the three economic sectors, the others being the secondary sector and the primary sector .The service sector consists of the "soft" parts of the economy, i.e...
contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Most of the country's products are in engineering, especially in automobiles, machinery, metals, and chemical goods. Germany is the leading producer of wind turbines and solar power technology in the world. The largest annual international trade fairs and congresses are held in several German cities such as Hanover
Hanover
Hanover or Hannover, on the river Leine, is the capital of the federal state of Lower Saxony , Germany and was once by personal union the family seat of the Hanoverian Kings of Great Britain, under their title as the dukes of Brunswick-Lüneburg...
, Frankfurt
Frankfurt
Frankfurt am Main , commonly known simply as Frankfurt, is the largest city in the German state of Hesse and the fifth-largest city in Germany, with a 2010 population of 688,249. The urban area had an estimated population of 2,300,000 in 2010...
, and Berlin
Berlin
Berlin is the capital city of Germany and is one of the 16 states of Germany. With a population of 3.45 million people, Berlin is Germany's largest city. It is the second most populous city proper and the seventh most populous urban area in the European Union...
.
Of the world's 500 largest stock market listed companies measured by revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
, the Fortune Global 500
Fortune Global 500
The Fortune Global 500 is a ranking of the top 500 corporations worldwide as measured by revenue. The list is compiled and published annually by Fortune magazine....
, 37 are headquartered in Germany. In 2010 the ten largest were Volkswagen
Volkswagen
Volkswagen is a German automobile manufacturer and is the original and biggest-selling marque of the Volkswagen Group, which now also owns the Audi, Bentley, Bugatti, Lamborghini, SEAT, and Škoda marques and the truck manufacturer Scania.Volkswagen means "people's car" in German, where it is...
, Allianz
Allianz
SE is a global financial services company headquartered in Munich, Germany. Its core business and focus is insurance. As of 2010, it was the world's 12th-largest financial services group and 23rd-largest company according to a composite measure by Forbes magazine.Its Allianz Global Investors...
, E.ON
E.ON
E.ON AG, marketed with an interpunct as E•ON, is the holding company of the world's largest investor-owned energy service provider based in Düsseldorf, Germany. The name comes from the Greek word aeon which means eternity....
, Daimler, Siemens
Siemens AG
Siemens AG is a German multinational conglomerate company headquartered in Munich, Germany. It is the largest Europe-based electronics and electrical engineering company....
, Metro
Metro AG
Metro AG is a diversified retail and wholesale/cash and carry group based in Düsseldorf, Germany. It has the largest market share in its home market, and is one of the most globalised retail and wholesale corporations. It is the fourth-largest retailer in the world measured by revenues . In English...
, Deutsche Telekom
Deutsche Telekom
Deutsche Telekom AG is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Europe....
, Munich Re
Munich Re
Munich Re Group is a reinsurance company based in Munich, Germany. It is one of the world’s leading reinsurers. ERGO, a Munich Re subsidiary, is the Group’s primary insurance arm....
, BASF
BASF
BASF SE is the largest chemical company in the world and is headquartered in Germany. BASF originally stood for Badische Anilin- und Soda-Fabrik . Today, the four letters are a registered trademark and the company is listed on the Frankfurt Stock Exchange, London Stock Exchange, and Zurich Stock...
, and BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
. Other large German companies include: Robert Bosch
Robert Bosch GmbH
Robert Bosch GmbH is a multinational engineering and electronics company headquartered in Gerlingen, near Stuttgart, Germany. It is the world's largest supplier of automotive components...
, ThyssenKrupp
ThyssenKrupp
ThyssenKrupp AG is a German multinational conglomerate corporation headquartered in Duisburg Essen, Germany. The corporation consists of 670 companies worldwide. While ThyssenKrupp is one of the world's largest steel producers, the company also provides components and systems for the automotive...
, and MAN (diversified industrials); Bayer
Bayer
Bayer AG is a chemical and pharmaceutical company founded in Barmen , Germany in 1863. It is headquartered in Leverkusen, North Rhine-Westphalia, Germany and well known for its original brand of aspirin.-History:...
and Merck
Merck KGaA
Merck KGaA is a German chemical and pharmaceutical company. Merck, also known as “German Merck” and “Merck Darmstadt”, was founded in Darmstadt, Germany, in 1668, making it the world's oldest operating chemical and pharmaceutical company. The company was privately owned until going public in 1995...
(pharmaceuticals); Adidas
Adidas
Adidas AG is a German sports apparel manufacturer and parent company of the Adidas Group, which consists of the Reebok sportswear company, TaylorMade-Adidas golf company , and Rockport...
and Puma
PUMA AG
Puma SE, officially branded as PUMA, is a major German multinational company that produces high-end athletic shoes, lifestyle footwear and other sportswear. Formed in 1924 as Gebrüder Dassler Schuhfabrik by Adolf and Rudolf Dassler, relationships between the two brothers deteriorated until the two...
(clothing and footwear); Commerzbank
Commerzbank
Commerzbank AG is the second-largest bank in Germany, after Deutsche Bank, headquartered in Frankfurt am Main.-Activities:Commerzbank is mainly active in commercial bank, retail banking and mortgaging. It suffered reversals in investment banking in early 2000s and scaled back its Securities unit...
and Deutsche Bank
Deutsche Bank
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
(banking and finance); Aldi
ALDI
ALDI Einkauf GmbH & Co. oHG, doing business as ', short for "Albrecht Discount", is a discount supermarket chain based in Germany...
, Lidl
Lidl
Lidl is a discount supermarket chain based in Germany that operates over 7,200 stores across Europe. The company's full name is Lidl Stiftung & Co. KG...
and Edeka
EDEKA
The Edeka Group is the largest German supermarket corporation, currently holding a market share of 26%. Founded in 1898, it consists today of several cooperatives of independent supermarkets all operating under the umbrella organisation Edeka Zentrale AG & Co KG, with headquarters in Hamburg...
(retail); SAP
SAP AG
SAP AG is a German software corporation that makes enterprise software to manage business operations and customer relations. Headquartered in Walldorf, Baden-Württemberg, with regional offices around the world, SAP is the market leader in enterprise application software...
(computer software); Infineon (semiconductors); Henkel
Henkel
Henkel AG & Co. KGaA is an multinational company headquartered in Düsseldorf, Germany.The company operates in three business areas: Home Care , Personal Care ,...
(household and personal consumer products); Deutsche Post
Deutsche Post
Deutsche Post AG, operating under the trade name Deutsche Post DHL, is the world's largest logistics group. With its headquarters in Bonn, the corporation has 467,088 employees in more than 220 countries and territories worldwide and generated revenue of € 51.48 billion in 2010...
(logistics); and Hugo Boss
Hugo Boss
Hugo Ferdinand Boss was the founder of clothing company Hugo Boss.-Early life:Boss was born in Metzingen, Germany. After completing his apprenticeship and one year of employment, he founded his own company in Metzingen in 1923.-Support of Nazism:Boss joined the Nazi Party in 1931, two years before...
(luxury goods). Well known global brands are Mercedes Benz, BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
, Adidas
Adidas
Adidas AG is a German sports apparel manufacturer and parent company of the Adidas Group, which consists of the Reebok sportswear company, TaylorMade-Adidas golf company , and Rockport...
, Audi
Audi
Audi AG is a German automobile manufacturer, from supermini to crossover SUVs in various body styles and price ranges that are marketed under the Audi brand , positioned as the premium brand within the Volkswagen Group....
, Porsche
Porsche
Porsche Automobil Holding SE, usually shortened to Porsche SE a Societas Europaea or European Public Company, is a German based holding company with investments in the automotive industry....
, Volkswagen
Volkswagen
Volkswagen is a German automobile manufacturer and is the original and biggest-selling marque of the Volkswagen Group, which now also owns the Audi, Bentley, Bugatti, Lamborghini, SEAT, and Škoda marques and the truck manufacturer Scania.Volkswagen means "people's car" in German, where it is...
, DHL
DHL Express
DHL Express is a division of the German logistics company Deutsche Post providing international express mail services. DHL is a world market leader in sea and air mail....
, T-Mobile
T-Mobile
T-Mobile International AG is a German-based holding company for Deutsche Telekom AG's various mobile communications subsidiaries outside Germany. Based in Bonn, Germany, its subsidiaries operate GSM and UMTS-based cellular networks in Europe, the United States, Puerto Rico and the US Virgin Islands...
, Lufthansa
Lufthansa
Deutsche Lufthansa AG is the flag carrier of Germany and the largest airline in Europe in terms of overall passengers carried. The name of the company is derived from Luft , and Hansa .The airline is the world's fourth-largest airline in terms of overall passengers carried, operating...
, SAP
SAP AG
SAP AG is a German software corporation that makes enterprise software to manage business operations and customer relations. Headquartered in Walldorf, Baden-Württemberg, with regional offices around the world, SAP is the market leader in enterprise application software...
, and Nivea
Nivea
Nivea is a global skin- and body-care brand that is owned by the German company Beiersdorf. The company was founded on March 28 1882 by pharmacist Carl Paul Beiersdorf. In 1900, the new owner Oskar Troplowitz developed a water-in-oil emulsion as a skin cream with Eucerit, the first stable emulsion...
.
Between 1991 and 2010, 40'301 mergers & acquisitions
Mergers and acquisitions
Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...
with an involvement of German firms with a total known value of 2'422 bil. EUR have been announced. The largest transactions since 1991 are: the acquisition of Mannesmann
Mannesmann
Mannesmann AG was a German corporation with headquarters in Düsseldorf. The company was founded in 1890 originally to produce seamless steel tubes. It was traded on the Frankfurt Stock Exchange. The company had 130,860 employees worldwide and revenues of €23.27 billion.Over time, Mannesmann...
by Vodafone
Vodafone
Vodafone Group Plc is a global telecommunications company headquartered in London, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers , with around 341 million proportionate subscribers as of...
for 204.8 bil. EUR in 1999, the merger of Daimler-Benz
Daimler-Benz
Daimler-Benz AG was a German manufacturer of automobiles, motor vehicles, and internal combustion engines; founded in 1926. An Agreement of Mutual Interest - which was valid until year 2000 - was signed on 1 May 1924 between Karl Benz's Benz & Cie., and Daimler Motoren Gesellschaft, which had...
with Chrysler
Chrysler
Chrysler Group LLC is a multinational automaker headquartered in Auburn Hills, Michigan, USA. Chrysler was first organized as the Chrysler Corporation in 1925....
to form DaimlerChrysler
Daimler
- Daimler with reference to motor vehicles :refers to:* Gottlieb Daimler , German automobile inventor- Business co-founded by Gottlieb Daimler :...
in 1998 valued at 36.3 bil. EUR, Deutsche Telekom
Deutsche Telekom
Deutsche Telekom AG is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Europe....
acquired VoiceStream Wireless Corp
T-Mobile USA
T-Mobile USA, Inc. is an American mobile-network operator, headquartered in Bellevue, Washington, that provides wireless voice, messaging and data services in the United States, Puerto Rico and the U.S. Virgin Islands. The company is the fourth-largest wireless carrier in the U.S. market with 33.73...
for 30.8 bil. EUR in 2000, the sale of T-Mobile USA Inc
T-Mobile USA
T-Mobile USA, Inc. is an American mobile-network operator, headquartered in Bellevue, Washington, that provides wireless voice, messaging and data services in the United States, Puerto Rico and the U.S. Virgin Islands. The company is the fourth-largest wireless carrier in the U.S. market with 33.73...
by Deutsche Telekom
Deutsche Telekom
Deutsche Telekom AG is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Europe....
to AT&T Inc for 27.6 bil. EUR in 2011.
, as measured by ILO
International Labour Organization
The International Labour Organization is a specialized agency of the United Nations that deals with labour issues pertaining to international labour standards. Its headquarters are in Geneva, Switzerland. Its secretariat — the people who are employed by it throughout the world — is known as the...
standards the German unemployment rate was 6.1 percent (compared with 7.2 percent as measured by German standards).
Nazi Era
The economy of Germany during the Hitler era (1933 – 1945) developed a hothouse prosperity, supported with high government subsidies to those sectors that Hitler favored because they gave Nazi GermanyNazi Germany
Nazi Germany , also known as the Third Reich , but officially called German Reich from 1933 to 1943 and Greater German Reich from 26 June 1943 onward, is the name commonly used to refer to the state of Germany from 1933 to 1945, when it was a totalitarian dictatorship ruled by...
military power and economic autarky
Autarky
Autarky is the quality of being self-sufficient. Usually the term is applied to political states or their economic policies. Autarky exists whenever an entity can survive or continue its activities without external assistance. Autarky is not necessarily economic. For example, a military autarky...
, that is, economic independence from the global economy
Economic globalization
Economic globalization refers to increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology and capital...
.
Adolf Hitler
Adolf Hitler
Adolf Hitler was an Austrian-born German politician and the leader of the National Socialist German Workers Party , commonly referred to as the Nazi Party). He was Chancellor of Germany from 1933 to 1945, and head of state from 1934 to 1945...
, believing that "the economy is something of secondary importance", left the details of the economic National Socialist Program
National Socialist Program
The National Socialist Programme , was first, the political program of the German National Socialist Party in 1918, and later, in the 1920s, of the National Socialist German Workers' Party headed by Adolf...
me out of Mein Kampf
Mein Kampf
Mein Kampf is a book written by Nazi leader Adolf Hitler. It combines elements of autobiography with an exposition of Hitler's political ideology. Volume 1 of Mein Kampf was published in 1925 and Volume 2 in 1926...
. The Nazis rose to power while unemployment was very high, but achieved full employment
Full employment
In macroeconomics, full employment is a condition of the national economy, where all or nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so....
later thanks to massive rearmament. Their pre-war economic policies, resembling Keynesianism, were in the beginning the brainchildren of their non-Nazi Minister of Economics, Hjalmar Schacht
Hjalmar Schacht
Dr. Hjalmar Horace Greeley Schacht was a German economist, banker, liberal politician, and co-founder of the German Democratic Party. He served as the Currency Commissioner and President of the Reichsbank under the Weimar Republic...
, who was later made to focus more on war production (cf: Military Keynesianism
Military Keynesianism
Military Keynesianism is the accusation that John Maynard Keynes advocated government economic policy in which the government devotes large amounts of spending to the military in an effort to increase economic growth. In fact, the English economist John Maynard Keynes advocated that government...
), and was eventually replaced by a Nazi, Hermann Göring
Hermann Göring
Hermann Wilhelm Göring, was a German politician, military leader, and a leading member of the Nazi Party. He was a veteran of World War I as an ace fighter pilot, and a recipient of the coveted Pour le Mérite, also known as "The Blue Max"...
.
The trading policies of the Third Reich aimed at discouraging trade with countries outside the German sphere of influence
Sphere of influence
In the field of international relations, a sphere of influence is a spatial region or conceptual division over which a state or organization has significant cultural, economic, military or political influence....
, while making southern Europe largely dependent on Germany. Eventually, the Nazi party developed strong relationships with big business
Big Business
Big business is a term used to describe large corporations, in either an individual or collective sense. The term first came into use in a symbolic sense subsequent to the American Civil War, particularly after 1880, in connection with the combination movement that began in American business at...
and abolished trade union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
s while real wages dropped by a fourth, and employees could not easily change employer. Taxes, though, were still low well into the war. Already before the war, people undesirable to the regime were used as slave labour
Forced labor in Germany during World War II
The use of forced labour in Nazi Germany and throughout German-occupied Europe during World War II took place on an unprecedented scale. It was a vital part of the German economic exploitation of conquered territories. It also contributed to the mass extermination of populations in German-occupied...
, and in 1944 they reached one quarter of the workers. Some like the British Marxist historian Timothy Mason
Timothy Mason
Timothy Wright Mason was a British Marxist historian of Nazi Germany.-Life and work:He was born in Birkenhead, the child of school-teachers and was educated at Birkenhead School and Oxford University. He taught at Oxford from 1971–1984 and was twice married. He helped to found the...
have argued that the Second World War was a direct effect of the German economic system, which made expansionism
Expansionism
In general, expansionism consists of expansionist policies of governments and states. While some have linked the term to promoting economic growth , more commonly expansionism refers to the doctrine of a state expanding its territorial base usually, though not necessarily, by means of military...
necessary for domestic prosperity, indeed, survival; and which made Jingoism
Jingoism
Jingoism is defined in the Oxford English Dictionary as extreme patriotism in the form of aggressive foreign policy. In practice, it is a country's advocation of the use of threats or actual force against other countries in order to safeguard what it perceives as its national interests...
necessary for the quelling of class conflict
Class conflict
Class conflict is the tension or antagonism which exists in society due to competing socioeconomic interests between people of different classes....
s. Mason called the outbreak of World War II in 1939 a "flight into war" imposed on Hitler by an economic crisis.
Wirtschaftswunder of the West
Beginning with the replacementMonetary reform
Monetary reform describes any movement or theory that proposes a different system of supplying money and financing the economy from the current system.Monetary reformers may advocate any of the following, among other proposals:...
of the Reichsmark
German reichsmark
The Reichsmark was the currency in Germany from 1924 until June 20, 1948. The Reichsmark was subdivided into 100 Reichspfennig.-History:...
with the Deutsche Mark as legal tender, a lasting period of low inflation and rapid industrial growth was overseen by the government led by German Chancellor Konrad Adenauer
Konrad Adenauer
Konrad Hermann Joseph Adenauer was a German statesman. He was the chancellor of the West Germany from 1949 to 1963. He is widely recognised as a person who led his country from the ruins of World War II to a powerful and prosperous nation that had forged close relations with old enemies France,...
and his minister of economics, Ludwig Erhard
Ludwig Erhard
Ludwig Wilhelm Erhard was a German politician affiliated with the CDU and Chancellor of West Germany from 1963 until 1966. He is notable for his leading role in German postwar economic reform and economic recovery , particularly in his role as Minister of Economics under Chancellor Konrad Adenauer...
, raising West Germany from total wartime devastation to one of the most developed nations in modern Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
.
Contrary to popular belief, the Marshall Plan, which was extended to also include Western Germany after it was realized that the suppression of the Western German economy was holding back the recovery of the rest of Europe, was not the main force behind the Wirtschaftswunder
Wirtschaftswunder
The term describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II . The expression was used by The Times in 1950...
. The amount of monetary aid (which was in the form of loans) received by Germany through the Marshall Plan (about $1.65 billion in total) was far overshadowed by the amount the Germans had to pay back as war reparations
War reparations
War reparations are payments intended to cover damage or injury during a war. Generally, the term war reparations refers to money or goods changing hands, rather than such property transfers as the annexation of land.- History :...
and by the charges the Allies made on the Germans for the ongoing cost of occupation (about $2.4 billion per year). In 1953 it was decided that Germany was to repay $1.1 billion of the aid it had received. The last repayment was made in June 1971. It is arguable, however, that recovery would have been possible without the initial economic boost as well as the modernization of infrastructure provided by the economic recovery plan.
Apart from these factors, hard work and long hours at full capacity among the population in the 1950s, 1960s and early 1970s and extra labor supplied by thousands of Gastarbeiter
Gastarbeiter
Gastarbeiter is German for "guest worker." It refers to migrant workers who had moved to West Germany mainly in the 1960s and 70s, seeking work as part of a formal guest worker programme...
("guest workers") provided a vital base for the economic upturn.
East Germany
Lower Silesia
Lower Silesia ; is the northwestern part of the historical and geographical region of Silesia; Upper Silesia is to the southeast.Throughout its history Lower Silesia has been under the control of the medieval Kingdom of Poland, the Kingdom of Bohemia and the Austrian Habsburg Monarchy from 1526...
, which contained coal mines, and Stettin, a prominent natural port, were lost to Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
.
Exports from West Germany exceeded $323 billion in 1988. In the same year, East Germany exported $30.7 billion worth of goods; 65% to other communist states. East Germany had zero unemployment.
In 1976 the average annual GDP growth was roughly 5.9%.
Post-reunification
The German economy practically stagnated in the beginning of the 2000s. The worst growth figures were achieved in 2002 (+1.4%), in 2003 (+1.0%) and in 2005 (+1.4%). Unemployment was also chronically high. Due to these problems, together with Germany's aging populationDemographics of Germany
The Demographics of Germany were determined also by a series of full Census in Germany, with the most recent held in 1987. Since reunification, German authorities rely on a micro census....
, the welfare system came under a lot of strain. This led the government to push through a wide-ranging programme of belt-tightening reforms, Agenda 2010
Agenda 2010
The Agenda 2010 is a series of reforms planned and executed by the German government which are aimed at reforming the German social system and labour market. The declared aim of Agenda 2010 is to improve economic growth and thus reduce unemployment....
, including the labour market reforms known as Hartz I - IV
Hartz concept
The Hartz concept is a set of recommendations that resulted from a commission on reforms to the German labour market in 2002. Named after the head of the commission, Peter Hartz, it went on to become part of the German government's Agenda 2010 series of reforms, known as Hartz I - Hartz IV...
. In the latter part of the first decade of 2000 the world economy experienced high growth, from which Germany as a leading exporter also profited. Some attribute the Hartz reforms to the high German growth and declining unemployment, while others contend that it resulted in a massive decrease in standards of living, and that its effects are limited and temporary.
The nominal GDP of Germany contracted in the second and third quarters of 2008, putting the country in a technical recession following a global and European recession
Late 2000s recession in Europe
While the recession of the late 2000s began in the United States, the crisis spread to Europe rapidly and has affected much of the region with several countries already in recession as of February 2009, and most others suffering marked economic setbacks...
cycle. German industrial output dropped to 3.6% in September vis-a-vis August. In January 2009 the German government under Angela Merkel approved a €50 billion ($70 billion) economic stimulus plan to protect several sectors from a downturn and a subsequent rise in unemployment rates. Germany exited the recession in the second and third quarters of 2009, mostly due to rebounding manufacturing orders and exports - primarily from outside the Euro Zone - and relatively steady consumer demand.
The following table lists the non-seasonally adjusted GDP growth in 1992-2009.
| 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | |
|---|---|---|---|---|---|---|---|---|
| GDP | €1646.62 bn | €1694.37 bn | €1780.78 bn | €1848.45 bn | €1878.18 bn | €1915.58 bn | €1965.38 bn | €2012.00 bn |
| Change | +7.3% | +2.9% | +5.1% | +3.8% | +1.5% | +2.1% | +2.6% | +2.4% |
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |
|---|---|---|---|---|---|---|---|---|---|---|
| GDP | €2062.50 bn | €2113.16 bn | €2143.18 bn | €2163.80 bn | €2210.90 bn | €2242.20 bn | €2325.10 bn | €2428.20 bn | €2495.80 bn | €2409.10 bn |
| Change | +2.5% | +2.5% | +1.4% | +1.0% | +2.2% | +1.4% | +3.7% | +4.4% | +2.8% | -3.5% |
Economic regions
In several unitary European countries, such as United KingdomUnited Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, the capital city dominates the national economy. Germany - a federation -, on the other hand, does not have a single economic center: it is a polycentric country. Only 3 of Germany's 100 largest companies are headquartered in the capital Berlin. For example, the stock exchange is located in Frankfurt am Main, the largest Media company (Bertelsmann AG) is headquartered in Gütersloh
Gütersloh
Gütersloh is a city in North Rhine-Westphalia, in the area of Westphalia and the administrative region of Detmold. Gütersloh is the administrative centre for a district of the same name and has a population of 96,320 people.- Geography :...
; the most important car manufacturers are in Wolfsburg
Wolfsburg
Wolfsburg is a town in Lower Saxony, Germany. It is located on the River Aller northeast of Braunschweig , and is mainly notable as the headquarters of Volkswagen AG...
, Stuttgart
Stuttgart
Stuttgart is the capital of the state of Baden-Württemberg in southern Germany. The sixth-largest city in Germany, Stuttgart has a population of 600,038 while the metropolitan area has a population of 5.3 million ....
and München.
Old Bundesländer
Generally the southern states ("Bundesländer"), especially Bayern, Baden-Württemberg and Hessen, are economically stronger than the northern states. One of Germany's traditionally strongest (and at the same time oldest) economic regions is the Ruhr areaRuhr Area
The Ruhr, by German-speaking geographers and historians more accurately called Ruhr district or Ruhr region , is an urban area in North Rhine-Westphalia, Germany. With 4435 km² and a population of some 5.2 million , it is the largest urban agglomeration in Germany...
in the west, between Bonn
Bonn
Bonn is the 19th largest city in Germany. Located in the Cologne/Bonn Region, about 25 kilometres south of Cologne on the river Rhine in the State of North Rhine-Westphalia, it was the capital of West Germany from 1949 to 1990 and the official seat of government of united Germany from 1990 to 1999....
and Dortmund
Dortmund
Dortmund is a city in Germany. It is located in the Bundesland of North Rhine-Westphalia, in the Ruhr area. Its population of 585,045 makes it the 7th largest city in Germany and the 34th largest in the European Union....
. 27 of the country's 100 largest companies are located there. In recent years, however, the area, whose economy is based on natural resources and heavy industry, has seen a substantial rise in unemployment (2010: 8.7%). The economy of Bayern and Baden-Württemberg
Baden-Württemberg
Baden-Württemberg is one of the 16 states of Germany. Baden-Württemberg is in the southwestern part of the country to the east of the Upper Rhine, and is the third largest in both area and population of Germany's sixteen states, with an area of and 10.7 million inhabitants...
, the states with the lowest number of unemployed people (2010: 4.5%, 4.9%), on the other hand, is based on high-value products. Important sectors are automobiles, electronics, aerospace and biomedicine, among others. Baden-Württemberg is an industrial center especially for automobile and machine building industry and the home of brands like Mercedes-Benz (Daimler), Porsche and Bosch. One reason for the low unemployment in Bayern with brands like BMW, Audi and Siemens is that the state started its economic rise later, after the Second World War, and does not have as many traditional industries, which are presently encountering problems due to competition from countries such as China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
, as well as the exhaustion of natural resources.
New Bundesländer
With unification on October 3, 1990, Germany began the major task of reconciling the economic systems of the two former republics. Its task was complicated by the dismantling of the extensive welfare system of the former German Democratic RepublicGerman Democratic Republic
The German Democratic Republic , informally called East Germany by West Germany and other countries, was a socialist state established in 1949 in the Soviet zone of occupied Germany, including East Berlin of the Allied-occupied capital city...
, which resulted in a temporary but significant drop of the standard of living of its citizens; interventionist economic planning ensured a quick return of the standard of living and a gradual increase up to the level of that of western Germany. Since reunification, hundreds of thousands of former East Germans have migrated into western Germany to find work. Drastic changes in the socioeconomic landscape brought about by reunification have resulted in troubling social problems. Economic uncertainty in eastern Germany is often cited as one factor contributing to extremist violence, primarily from the political right. Confusion about the causes of the current hardships and a need to place blame have found expression in harassment and violence by some Germans directed toward foreigners, particularly non-European
Even after the German reunification
German reunification
German reunification was the process in 1990 in which the German Democratic Republic joined the Federal Republic of Germany , and when Berlin reunited into a single city, as provided by its then Grundgesetz constitution Article 23. The start of this process is commonly referred by Germans as die...
in 1990, the standard of living
Standard of living
Standard of living is generally measured by standards such as real income per person and poverty rate. Other measures such as access and quality of health care, income growth inequality and educational standards are also used. Examples are access to certain goods , or measures of health such as...
and annual income remains significantly higher in the former West German states. The modernisation and integration of the eastern German economy continues to be a long-term process scheduled to last until the year 2019, with annual transfers from west to east amounting to roughly $80 billion. The overall unemployment rate has consistently fallen since 2005 and reached a 15-year low in June 2008 with 7.5%. The percentage ranges from 6.2% in former West Germany to 12.7% in former East Germany.
Natural resources
The German soil is relatively poor in raw materials. Only ligniteLignite
Lignite, often referred to as brown coal, or Rosebud coal by Northern Pacific Railroad,is a soft brown fuel with characteristics that put it somewhere between coal and peat...
(brown coal) and potash
Potash
Potash is the common name for various mined and manufactured salts that contain potassium in water-soluble form. In some rare cases, potash can be formed with traces of organic materials such as plant remains, and this was the major historical source for it before the industrial era...
salt (Kalisalz) are available in significant quantities. Oil, natural gas and other resources are, for the most part, imported from other countries.
The potash salt deposits are a result of the drying up of the Zechstein
Zechstein
The Zechstein is a unit of sedimentary rock layers of Middle to Late Permian age located in the European Permian Basin which stretches from the east coast of England to northern Poland...
sea, which 250 million years ago covered large parts of North and Central Europe. Potash salt is mined in the center of the country (Niedersachsen, Sachsen-Anhalt and Thüringen
Thuringia
The Free State of Thuringia is a state of Germany, located in the central part of the country.It has an area of and 2.29 million inhabitants, making it the sixth smallest by area and the fifth smallest by population of Germany's sixteen states....
). The most important producer is K+S AG (formerly Kali und Salz AG).
Germany's bituminous coal deposits were created more than 300 million years ago from swamps which extended from the present-day South England, over the Ruhr area
Ruhr Area
The Ruhr, by German-speaking geographers and historians more accurately called Ruhr district or Ruhr region , is an urban area in North Rhine-Westphalia, Germany. With 4435 km² and a population of some 5.2 million , it is the largest urban agglomeration in Germany...
to Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
. Lignite deposits developed in a similar way, but during a later period, about 65 million years ago. Because the wood is not yet completely transformed into coal, brown coal contains less energy than bituminous coal.
Lignite is extracted in the extreme western and eastern pars of the country, mainly in Nordrhein-Westfalen, Sachsen and Brandenburg
Brandenburg
Brandenburg is one of the sixteen federal-states of Germany. It lies in the east of the country and is one of the new federal states that were re-created in 1990 upon the reunification of the former West Germany and East Germany. The capital is Potsdam...
. Considerable amounts are burned in coal plants near to the mining areas, to produce electricity. Transporting lignite over far distances is not economically feasible, therefore the plants are located practically next to the extraction sites. Bituminous coal
Bituminous coal
Bituminous coal or black coal is a relatively soft coal containing a tarlike substance called bitumen. It is of higher quality than lignite coal but of poorer quality than Anthracite...
is mined in Nordrhein-Westfalen and Saarland. Most power plants burning bituminous coal operate on imported material, therefore the plants are located not only near to the mining sites, but throughout the country.
Primary
In 2008 agricultureAgriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
, forestry
Forestry
Forestry is the interdisciplinary profession embracing the science, art, and craft of creating, managing, using, and conserving forests and associated resources in a sustainable manner to meet desired goals, needs, and values for human benefit. Forestry is practiced in plantations and natural stands...
, and mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...
accounted for only 0.9% of Germany’s gross domestic product (GDP) and employed only 2.4% of the population, down from 4% in 1991. Much of the reduction in employment occurred in the eastern states, where the number of agricultural workers declined by as much as 75% following reunification. However, agriculture is extremely productive, and Germany is able to cover 90% of its nutritional needs with domestic production. In fact, Germany is the third largest agricultural producer in the European Union after France and Italy. Germany’s principal agricultural products are potatoes, wheat, barley, sugar beets, fruit, and cabbages. Despite Germany’s high level of industrialization, almost one-third of its territory is covered by forest. The forestry industry provides for about two-thirds of domestic consumption of wood and wood products, so Germany is a net importer of these items.
Industry
Industry and construction accounted for 29% of gross domestic product in 2008, and employed 29.7% of the workforce. Germany excels in the production of automobiles, machinery, electrical equipment and chemicals. With the manufacture of 5.2 million vehicles in 2009, Germany was the world’s fourth largest producer and largest exporter of automobiles. German automotive companies enjoy a extremely strong position in the so called premium segment, with a combined world market share of about 90 %. Of vital importance is the role of small- to medium-sized manufacturing firms (Mittelstand
Mittelstand
Mittelstand refers to small and medium-sized enterprises in German-speaking countries, especially in Germany, Austria and Switzerland. Economic and business historians have been increasingly giving Mittelstand companies more and more credit for Germany's economic growth in the beginning of the 20th...
companies), which specialize in technologically advanced niche products and are often family-owned. It is estimated, that about 1500 German companies occupy a top three position in their respective market segment worldwide. In about two thirds of all industry sectors German companies belong to the top three competitors.
Tertiary sector
In 2008 services constituted 69% of gross domestic product (GDP), and the sector employed 67.5% of the workforce. The subcomponents of services are financial, renting, and business activities (30.5%); trade, hotels and restaurants, and transport (18%); and other service activities (21.7%).Energy
Germany is the world's fifth largest consumer of energy, and two-thirds of its primary energy was imported in 2002. In the same year, Germany was Europe's largest consumer of electricity, totaling 512.9 terawatt-hours. Government policy promotes energy conservation and the development of renewable energyRenewable energy
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable . About 16% of global final energy consumption comes from renewables, with 10% coming from traditional biomass, which is mainly used for heating, and 3.4% from...
sources, such as solar, wind
Wind power
Wind power is the conversion of wind energy into a useful form of energy, such as using wind turbines to make electricity, windmills for mechanical power, windpumps for water pumping or drainage, or sails to propel ships....
, biomass
Biomass
Biomass, as a renewable energy source, is biological material from living, or recently living organisms. As an energy source, biomass can either be used directly, or converted into other energy products such as biofuel....
, hydroelectric, and geothermal
Geothermal power
Geothermal energy is thermal energy generated and stored in the Earth. Thermal energy is the energy that determines the temperature of matter. Earth's geothermal energy originates from the original formation of the planet and from radioactive decay of minerals...
energy. As a result of energy-saving measures, energy efficiency
Efficient energy use
Efficient energy use, sometimes simply called energy efficiency, is the goal of efforts to reduce the amount of energy required to provide products and services. For example, insulating a home allows a building to use less heating and cooling energy to achieve and maintain a comfortable temperature...
has been improving since the beginning of the 1970s. The government has set the goal of meeting half the country's energy demands from renewable sources by 2050.
In 2000, the government and the German nuclear power industry
Nuclear power in Germany
Nuclear power in Germany accounted for 23% of national electricity consumption, before the permanent shutdown of 8 plants in March 2011. German nuclear power began with research reactors in the 1950s and 1960s with the first commercial plant coming online in 1969...
agreed to phase out all nuclear power plant
Nuclear power plant
A nuclear power plant is a thermal power station in which the heat source is one or more nuclear reactors. As in a conventional thermal power station the heat is used to generate steam which drives a steam turbine connected to a generator which produces electricity.Nuclear power plants are usually...
s by 2021. The government reversed this decision in January 2010, electing to keep plants open. The crash of the Japanese nuclear plant Fukushima
Fukushima
may refer to:*Fukushima City – the capital city of Fukushima Prefecture, Japan*Fukushima Prefecture – a Japanese prefecture*Two nuclear power plants located in Fukushima Prefecture:**Fukushima Daiichi Nuclear Power Plant...
in March 2011 however, changed the political climate fundamentally: Older nuclear plants have been shut down. And a general phase out until 2020 or 2022 is now probable. Renewable energy yet still plays a more modest role in energy consumption, though German solar and windpower industries play a leading role worldwide.
In 2009, Germany consumed energy from the following sources:
- Oil 34.6%
- Natural gas 21.7%
- Lignite 11.4%
- Bituminous coal 11.1%
- Nuclear power 11.0%
- Hydro and wind power 1.5%
- Others 9.0%
Renewable energy is far more present in the domestically produced energy, since Germany imports about two thirds of its energy.
There are 3 major entry points for oil pipelines: in the northeast (the Druzhba pipeline
Druzhba pipeline
The Druzhba pipeline is the world's longest oil pipeline and in fact one of the biggest oil pipeline networks in the world. It carries oil some from the eastern part of the European Russia to points in Ukraine, Belarus, Poland, Hungary, Slovakia, Czech Republic, and Germany...
, coming from Gdańsk
Gdansk
Gdańsk is a Polish city on the Baltic coast, at the centre of the country's fourth-largest metropolitan area.The city lies on the southern edge of Gdańsk Bay , in a conurbation with the city of Gdynia, spa town of Sopot, and suburban communities, which together form a metropolitan area called the...
), west (coming from Rotterdam
Rotterdam
Rotterdam is the second-largest city in the Netherlands and one of the largest ports in the world. Starting as a dam on the Rotte river, Rotterdam has grown into a major international commercial centre...
) and southeast (coming from Nelahozeves
Nelahozeves
Nelahozeves is a village on left bank of the Vltava river, 25 km north of Prague, Czech Republic. Population is 1,375 .The oldest surviving written document of Nelahozeves' existence dates back to 1352. The village has a three-winged Renaissance château of Italian castello type with arcades in...
). The oil pipelines of Germany do not constitute a proper network, and sometimes only connect two different locations. Major oil refineries are located in or near the following cities: Schwedt
Schwedt
Schwedt is a city in Brandenburg, Germany. It is the largest city of the district Uckermark near the Oder river on the border with Poland.-Overview:...
, Spergau
Spergau
Spergau is a village and a former municipality in the district Saalekreis, in Saxony-Anhalt, Germany. Since 31 December 2009, it is part of the town Leuna....
, Vohburg
Vohburg
Vohburg is a town in the district of Pfaffenhofen, in Bavaria, Germany. It is situated on the right bank of the Danube, 14 km east of Ingolstadt....
, Burghausen
Burghausen
Burghausen may refer to several places in Germany:*Burghausen, Altötting, a town in southeastern Bavaria*Burghausen bei Münnerstadt, part of Münnerstadt in northern Bavaria*Burghausen bei Freising, part of Kirchdorf an der Amper in central Bavaria...
, Karlsruhe
Karlsruhe
The City of Karlsruhe is a city in the southwest of Germany, in the state of Baden-Württemberg, located near the French-German border.Karlsruhe was founded in 1715 as Karlsruhe Palace, when Germany was a series of principalities and city states...
, Cologne
Cologne
Cologne is Germany's fourth-largest city , and is the largest city both in the Germany Federal State of North Rhine-Westphalia and within the Rhine-Ruhr Metropolitan Area, one of the major European metropolitan areas with more than ten million inhabitants.Cologne is located on both sides of the...
, Gelsenkirchen
Gelsenkirchen
Gelsenkirchen is a city in North Rhine-Westphalia, Germany. It is located in the northern part of the Ruhr area. Its population in 2006 was c. 267,000....
, Lingen
Lingen
Lingen is a town in Lower Saxony, Germany. In 2008 the population was 52,353, and in addition there are about 5,000 people who have registered the city as their secondary residence...
, Wilhelmshaven
Wilhelmshaven
Wilhelmshaven is a coastal town in Lower Saxony, Germany. It is situated on the western side of the Jade Bight, a bay of the North Sea.-History:...
, Hamburg
Hamburg
-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...
and Heide
Heide
Heide is a town in Schleswig-Holstein, Germany. It is the capital of the Kreis Dithmarschen. Population: 21,000.The German word Heide means "heath". In the 15th century four adjoining villages decided to build a church in the "middle of the heath". This remained the town's name to date...
.
Germany's network of natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
pipelines, on the other hand, is dense and well-connected. Imported pipeline gas comes mostly from Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
and the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. Although gas imports from Russia have been historically reliable, even during the cold war
Cold War
The Cold War was the continuing state from roughly 1946 to 1991 of political conflict, military tension, proxy wars, and economic competition between the Communist World—primarily the Soviet Union and its satellite states and allies—and the powers of the Western world, primarily the United States...
, recent price disputes between Gazprom
Gazprom
Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...
and the former Soviet states, such as Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
, have also affected Germany. As a result, high political importance is placed on the construction of the Nord Stream pipeline, running from Vyborg
Vyborg
Vyborg is a town in Leningrad Oblast, Russia, situated on the Karelian Isthmus near the head of the Bay of Vyborg, to the northwest of St. Petersburg and south from Russia's border with Finland, where the Saimaa Canal enters the Gulf of Finland...
in Russia along the Baltic sea to Greifswald
Greifswald
Greifswald , officially, the University and Hanseatic City of Greifswald is a town in northeastern Germany. It is situated in the state of Mecklenburg-Vorpommern, at an equal distance of about from Germany's two largest cities, Berlin and Hamburg. The town borders the Baltic Sea, and is crossed...
in Germany. This direct connection avoids third-party transit countries.
Transport
Germany has established a polycentric network of high-speed trains
High-speed rail
High-speed rail is a type of passenger rail transport that operates significantly faster than the normal speed of rail traffic. Specific definitions by the European Union include for upgraded track and or faster for new track, whilst in the United States, the U.S...
. The InterCityExpress
InterCityExpress
The Intercity-Express or ICE is a system of high-speed trains predominantly running in Germany and neighbouring countries. It is the highest service category offered by DB Fernverkehr and is the flagship of Deutsche Bahn...
or ICE is the most advanced service category of the Deutsche Bahn
Deutsche Bahn
Deutsche Bahn AG is the German national railway company, a private joint stock company . Headquartered in Berlin, it came into existence in 1994 as the successor to the former state railways of Germany, the Deutsche Bundesbahn of West Germany and the Deutsche Reichsbahn of East Germany...
and serves major German cities as well as destinations in neighbouring countries. The train maximum speed varies between 160 km/h and 300 km/h (100-185 mph). Connections are offered at either 30-minute, hourly, or two-hourly intervals.
Technology
Research and development
The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of...
efforts form an integral part of the economy.
Germany is also one of the leading countries in developing and using green technologies. Companies specializing in green technology have an estimated turnover of 200€ billion
1000000000 (number)
1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....
. Especially the expertise in engineering, science and research of Germany is eminently respectable.
The lead markets of Germany's green technology industry are power generation, sustainable mobility, material efficiency, energy efficiency, waste management and recycling
Recycling
Recycling is processing used materials into new products to prevent waste of potentially useful materials, reduce the consumption of fresh raw materials, reduce energy usage, reduce air pollution and water pollution by reducing the need for "conventional" waste disposal, and lower greenhouse...
, sustainable water management
Water management
Water management is the activity of planning, developing, distributing and managing the optimum use of water resources. In an ideal world. water management planning has regard to all the competing demands for water and seeks to allocate water on an equitable basis to satisfy all uses and demands...
.
See also
- Deutsche BundesbankDeutsche BundesbankThe Deutsche Bundesbank is the central bank of the Federal Republic of Germany and as such part of the European System of Central Banks . Due to its strength and former size, the Bundesbank is the most influential member of the ESCB. Both the Deutsche Bundesbank and the European Central Bank are...
- German modelGerman modelThe term German model is most often used in economics to describe post-World War II West Germany's means of using innovative industrial relations, vocational training, and closer relationships between the financial and industrial sectors to cultivate economic prosperity.- Industrial relations...
- List of German states by GDP per capita
- Metropolitan regions in GermanyMetropolitan regions in GermanyThe Metropolitan regions in Germany are eleven densely populated areas in the Federal Republic of Germany. They comprise the major German cities and their surrounding catchment areas and form the political, commercial and cultural centers of the country...
- Taxation in GermanyTaxation in GermanyTaxes in Germany—being a Federal Republic—are levied by the Federation , the States as well as the Municipalities . Many direct and indirect taxes exist, whereof income tax and VAT are the most relevant. The German word for tax is die Steuer which originates from the Old High German word stiura...
- Trade unions in GermanyTrade unions in GermanyTrade unions have a long history in Germany, reaching back to the German revolution in 1848, and still play an important role in German economy and society...
External links
- OECD's Germany country Web site and OECD Economic Survey of Germany
- Federal Statistical Office Germany
- Looking for Skilled Labor in Eastern Germany - slideshow by Der SpiegelDer SpiegelDer Spiegel is a German weekly news magazine published in Hamburg. It is one of Europe's largest publications of its kind, with a weekly circulation of more than one million.-Overview:...
Germany’s growth performance in the 1990s - Published by the European CommissionEuropean CommissionThe European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....