| GERMANY |
Economy:
The German economy - the fifth largest economy in the world in PPP terms and Europe's
largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment
and benefits from a highly skilled labor force. Like its western European neighbors,
Germany faces significant demographic challenges to sustained long-term growth. Low
fertility rates and declining net immigration are increasing pressure on the country's social
welfare system and necessitate structural reforms. The modernization and integration of
the eastern German economy - where unemployment can exceed 20% in some
municipalities - continues to be a costly long-term process, with annual transfers from west
to east amounting in 2008 alone to roughly $12 billion. Reforms launched by the
government of Chancellor Gerhard SCHROEDER (1998-2005), deemed necessary to
address chronically high unemployment and low average growth, contributed to strong
growth in 2006 and 2007 and falling unemployment. These advances, as well as a
government subsidized, reduced working hour scheme, help explain the relatively modest
increase in unemployment during the 2008-09 recession - the deepest since World War II -
and its decrease to 7.4%in 2010. GDP contracted 4.7% in 2009 but grew by 3.6% in 2010.
In its annual projection for 2011, the Federal Government expects the upswing to continue,
with GDP forecast to grow this year at a real rate of 2.3%. The recovery was attributable
primarily to rebounding manufacturing orders and exports - increasingly outside the Euro
Zone. Domestic demand, however, is becoming more significant driver of Germany's
economic expansion. Stimulus and stabilization efforts initiated in 2008 and 2009 and tax
cuts introduced in Chancellor Angela MERKEL's second term increased Germany's budget
deficit to 3.5% in 2010. The Bundesbank expects the deficit to drop to about 2.5% in 2011,
below the EU's 3% limit. A constitutional amendment approved in 2009 likewise limits the
federal government to structural deficits of no more than 0.35% of GDP per annum as of
2016.
GDP (purchasing power parity):
$2.94 trillion (2010 est.)
country comparison to the world: 6
$2.841 trillion (2009 est.)
$2.98 trillion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$3.316 trillion (2010 est.)
GDP - real growth rate:
3.5% (2010 est.)
country comparison to the world: 111
-4.7% (2009 est.)
0.7% (2008 est.)
GDP - per capita (PPP):
$35,700 (2010 est.)
country comparison to the world: 33
$34,500 (2009 est.)
$36,200 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 0.8%
industry: 27.9%
services: 71.3% (2010 est.)
Exports - commodities:
machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles
Exports - partners:
France 10.2%, US 6.7%, Netherlands 6.7%, UK 6.6%, Italy 6.3%, Austria 6%, China 4.5%,
Switzerland 4.4% (2009 est.)
Imports - commodities:
machinery, vehicles, chemicals, foodstuffs, textiles, metals
Imports - partners:
Netherlands 8.5%, China 8.2%, France 8.2%, US 5.9%, Italy 5.9%, UK 4.9%, Belgium
4.3%, Austria 4.3%, Switzerland 4.2% (2009 est.)
Click here to view IMF Report - GERMANY Report on Observance of
Standards and Codes (June 2011)
Banking
Germany has a non-discriminatory, well developed financial services infrastructure.
Germany’s universal banking system allows the country’s more than 39,000 bank offices
not only to take deposits and make loans to customers but also to trade in securities.
The traditional German system of cross-shareholding among banks and industry, as well
as a high rate of bank borrowing relative to equity financing, allowed German banks to
exert substantial influence on industry in the past.
Private banks control roughly 30% of the market, while publicly owned savings banks
partially linked to state and local governments account for 50% of banking transactions,
and cooperative banks make up the balance. All three types of banks offer a full range of
services to their customers. A state-owned bank, KfW, provides special credit services,
including the financing of homeowner mortgages, guarantees to small and medium-sized
businesses, financing for projects in disadvantaged regions in Germany and export
financing for projects in developing countries.
Regional state-owned banks ("Landesbanken") were among the hardest hit by the
economic crisis and their future is uncertain. The financial crisis also triggered a major
consolidation of the German banking sector with Commerzbank buying up Dresdner
Bank, Deutsche Bank taking over Postbank and UniCredit Bank buying up
Hypovereinsbank. This has effectively reduced the number of top German banks to just
two (Deutsche Bank and Commerzbank).
Stock Exchange
The Frankfurt Stock Exchange is one of the world‘s largest trading centers for
securities. The most stock trading is conducted via the Frankfurt Stock Exchange
and Xetra (as of March 2008, they accounted for 98% of trading in German
shares and 84 percent in foreign shares). Deutsche Börse AG operates the
Frankfurt Stock Exchange, an entity under public law. The Frankfurt Stock
Exchange facilitates advanced electronic trading, settlement and information systems.
Today, the Frankfurt Stock Exchange is an international trading centre. This is also
reflected in the structure of its participants. Some 160 of around 330 market participants
come from abroad. There are six other regional stock exchanges based in: Stuttgart,
Munich, Hamburg, Düsseldorf, Hannover, and Berlin. In addition, the derivatives
exchange Eurex is based in Frankfurt, the European Energy Exchange in Leipzig, and
the Risk Management Exchange in Hanover.
The German economy - the fifth largest economy in the world in PPP terms and Europe's
largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment
and benefits from a highly skilled labor force. Like its western European neighbors,
Germany faces significant demographic challenges to sustained long-term growth. Low
fertility rates and declining net immigration are increasing pressure on the country's social
welfare system and necessitate structural reforms. The modernization and integration of
the eastern German economy - where unemployment can exceed 20% in some
municipalities - continues to be a costly long-term process, with annual transfers from west
to east amounting in 2008 alone to roughly $12 billion. Reforms launched by the
government of Chancellor Gerhard SCHROEDER (1998-2005), deemed necessary to
address chronically high unemployment and low average growth, contributed to strong
growth in 2006 and 2007 and falling unemployment. These advances, as well as a
government subsidized, reduced working hour scheme, help explain the relatively modest
increase in unemployment during the 2008-09 recession - the deepest since World War II -
and its decrease to 7.4%in 2010. GDP contracted 4.7% in 2009 but grew by 3.6% in 2010.
In its annual projection for 2011, the Federal Government expects the upswing to continue,
with GDP forecast to grow this year at a real rate of 2.3%. The recovery was attributable
primarily to rebounding manufacturing orders and exports - increasingly outside the Euro
Zone. Domestic demand, however, is becoming more significant driver of Germany's
economic expansion. Stimulus and stabilization efforts initiated in 2008 and 2009 and tax
cuts introduced in Chancellor Angela MERKEL's second term increased Germany's budget
deficit to 3.5% in 2010. The Bundesbank expects the deficit to drop to about 2.5% in 2011,
below the EU's 3% limit. A constitutional amendment approved in 2009 likewise limits the
federal government to structural deficits of no more than 0.35% of GDP per annum as of
2016.
GDP (purchasing power parity):
$2.94 trillion (2010 est.)
country comparison to the world: 6
$2.841 trillion (2009 est.)
$2.98 trillion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$3.316 trillion (2010 est.)
GDP - real growth rate:
3.5% (2010 est.)
country comparison to the world: 111
-4.7% (2009 est.)
0.7% (2008 est.)
GDP - per capita (PPP):
$35,700 (2010 est.)
country comparison to the world: 33
$34,500 (2009 est.)
$36,200 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 0.8%
industry: 27.9%
services: 71.3% (2010 est.)
Exports - commodities:
machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles
Exports - partners:
France 10.2%, US 6.7%, Netherlands 6.7%, UK 6.6%, Italy 6.3%, Austria 6%, China 4.5%,
Switzerland 4.4% (2009 est.)
Imports - commodities:
machinery, vehicles, chemicals, foodstuffs, textiles, metals
Imports - partners:
Netherlands 8.5%, China 8.2%, France 8.2%, US 5.9%, Italy 5.9%, UK 4.9%, Belgium
4.3%, Austria 4.3%, Switzerland 4.2% (2009 est.)
Click here to view IMF Report - GERMANY Report on Observance of
Standards and Codes (June 2011)
Banking
Germany has a non-discriminatory, well developed financial services infrastructure.
Germany’s universal banking system allows the country’s more than 39,000 bank offices
not only to take deposits and make loans to customers but also to trade in securities.
The traditional German system of cross-shareholding among banks and industry, as well
as a high rate of bank borrowing relative to equity financing, allowed German banks to
exert substantial influence on industry in the past.
Private banks control roughly 30% of the market, while publicly owned savings banks
partially linked to state and local governments account for 50% of banking transactions,
and cooperative banks make up the balance. All three types of banks offer a full range of
services to their customers. A state-owned bank, KfW, provides special credit services,
including the financing of homeowner mortgages, guarantees to small and medium-sized
businesses, financing for projects in disadvantaged regions in Germany and export
financing for projects in developing countries.
Regional state-owned banks ("Landesbanken") were among the hardest hit by the
economic crisis and their future is uncertain. The financial crisis also triggered a major
consolidation of the German banking sector with Commerzbank buying up Dresdner
Bank, Deutsche Bank taking over Postbank and UniCredit Bank buying up
Hypovereinsbank. This has effectively reduced the number of top German banks to just
two (Deutsche Bank and Commerzbank).
Stock Exchange
The Frankfurt Stock Exchange is one of the world‘s largest trading centers for
securities. The most stock trading is conducted via the Frankfurt Stock Exchange
and Xetra (as of March 2008, they accounted for 98% of trading in German
shares and 84 percent in foreign shares). Deutsche Börse AG operates the
Frankfurt Stock Exchange, an entity under public law. The Frankfurt Stock
Exchange facilitates advanced electronic trading, settlement and information systems.
Today, the Frankfurt Stock Exchange is an international trading centre. This is also
reflected in the structure of its participants. Some 160 of around 330 market participants
come from abroad. There are six other regional stock exchanges based in: Stuttgart,
Munich, Hamburg, Düsseldorf, Hannover, and Berlin. In addition, the derivatives
exchange Eurex is based in Frankfurt, the European Energy Exchange in Leipzig, and
the Risk Management Exchange in Hanover.
Background:
As Europe's largest economy and second most
populous nation (after Russia), Germany is a
key member of the continent's economic,
political, and defense organizations. European
power struggles immersed Germany in two
devastating World Wars in the first half of the
20th century and left the country occupied by
the victorious Allied powers of the US, UK,
France, and the Soviet Union in 1945. With the
advent of the Cold War, two German states
were formed in 1949: the western Federal
Republic of Germany (FRG) and the eastern
German Democratic Republic (GDR). The
democratic FRG embedded itself in key
Western economic and security organizations,
the EC, which became the EU, and NATO,
while the Communist GDR was on the front line
of the Soviet-led Warsaw Pact. The decline of
the USSR and the end of the Cold War allowed
for German unification in 1990. Since then,
Germany has expended considerable funds to
bring Eastern productivity and wages up to
Western standards. In January 1999, Germany
and 10 other EU countries introduced a
common European exchange currency, the
euro. In January 2011, Germany assumed a
nonpermanent seat on the UN Security Council
for the 2011-12 term.
Government type:
federal republicCapital:
name: Berlin
time difference: UTC+1
Independence:
18 January 1871 (German Empire unification);
divided into four zones of occupation (UK, US,
USSR, and later, France) in 1945 following
World
War II; Federal Republic of Germany (FRG or
West Germany) proclaimed 23 May 1949 and
included the former UK, US, and French zones;
German Democratic Republic (GDR or East
Germany) proclaimed 7 October 1949 and
included the former USSR zone; unification of
West Germany and East Germany took place 3
October 1990; all four powers formally
relinquished rights 15 March 1991
National holiday:
Unity Day, 3 October (1990)
Constitution:
23 May 1949, known as Basic Law; became
constitution of the united Germany 3 October
1990
Legal system:
civil law system with indigenous concepts;
judicial review of legislative acts in the Federal
Constitutional Court; has not accepted
compulsory ICJ jurisdiction
Suffrage:
18 years of age; universal
Government:
Chief of state: President Joachim GAUCK
(since 23 March 2012)
head of government: Chancellor Angela
MERKEL (since 22 November 2005)
cabinet: Cabinet or Bundesminister (Federal
Ministers) appointed by the president on the
recommendation of the chancellor
elections: president elected for a five-year term
(eligible for a second term) by a Federal
Convention, including all members of the
Federal Diet (Bundestag) and an equal number
of delegates elected by the state parliaments;
election last held on 19 February 2012 (next to
be held by June 2017); chancellor elected by
an absolute majority of the Federal Diet for a
four-year term; Federal Diet vote for Chancellor
last held after 27 September 2009 (next to be
held 18 March 2012)
election results: Joachim GAUCK elected
president; received 991 votes of the Federal
Convention against 126 for Beate KLARSFELD
and 3 for Olaf ROSE; Angela MERKEL
reelected chancellor; vote by Federal Diet 323
to 285 with four abstentions
For names of current Ministers, click here.
Disputes - international:
None
All the information on this page sourced from
the CIA World Factbook, the US Commercial
Service and relevant FATF M.E.R.
As Europe's largest economy and second most
populous nation (after Russia), Germany is a
key member of the continent's economic,
political, and defense organizations. European
power struggles immersed Germany in two
devastating World Wars in the first half of the
20th century and left the country occupied by
the victorious Allied powers of the US, UK,
France, and the Soviet Union in 1945. With the
advent of the Cold War, two German states
were formed in 1949: the western Federal
Republic of Germany (FRG) and the eastern
German Democratic Republic (GDR). The
democratic FRG embedded itself in key
Western economic and security organizations,
the EC, which became the EU, and NATO,
while the Communist GDR was on the front line
of the Soviet-led Warsaw Pact. The decline of
the USSR and the end of the Cold War allowed
for German unification in 1990. Since then,
Germany has expended considerable funds to
bring Eastern productivity and wages up to
Western standards. In January 1999, Germany
and 10 other EU countries introduced a
common European exchange currency, the
euro. In January 2011, Germany assumed a
nonpermanent seat on the UN Security Council
for the 2011-12 term.
Government type:
federal republicCapital:
name: Berlin
time difference: UTC+1
Independence:
18 January 1871 (German Empire unification);
divided into four zones of occupation (UK, US,
USSR, and later, France) in 1945 following
World
War II; Federal Republic of Germany (FRG or
West Germany) proclaimed 23 May 1949 and
included the former UK, US, and French zones;
German Democratic Republic (GDR or East
Germany) proclaimed 7 October 1949 and
included the former USSR zone; unification of
West Germany and East Germany took place 3
October 1990; all four powers formally
relinquished rights 15 March 1991
National holiday:
Unity Day, 3 October (1990)
Constitution:
23 May 1949, known as Basic Law; became
constitution of the united Germany 3 October
1990
Legal system:
civil law system with indigenous concepts;
judicial review of legislative acts in the Federal
Constitutional Court; has not accepted
compulsory ICJ jurisdiction
Suffrage:
18 years of age; universal
Government:
Chief of state: President Joachim GAUCK
(since 23 March 2012)
head of government: Chancellor Angela
MERKEL (since 22 November 2005)
cabinet: Cabinet or Bundesminister (Federal
Ministers) appointed by the president on the
recommendation of the chancellor
elections: president elected for a five-year term
(eligible for a second term) by a Federal
Convention, including all members of the
Federal Diet (Bundestag) and an equal number
of delegates elected by the state parliaments;
election last held on 19 February 2012 (next to
be held by June 2017); chancellor elected by
an absolute majority of the Federal Diet for a
four-year term; Federal Diet vote for Chancellor
last held after 27 September 2009 (next to be
held 18 March 2012)
election results: Joachim GAUCK elected
president; received 991 votes of the Federal
Convention against 126 for Beate KLARSFELD
and 3 for Olaf ROSE; Angela MERKEL
reelected chancellor; vote by Federal Diet 323
to 285 with four abstentions
For names of current Ministers, click here.
Disputes - international:
None
All the information on this page sourced from
the CIA World Factbook, the US Commercial
Service and relevant FATF M.E.R.
| KnowYourCountry |
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| Last Updated: 17 September 2012 |