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Germany is the largest European economy and the third largest economy in the world in real terms, placed behind the United States and Japan, and fifth behind China and India counted by purchasing power parity. According to the World Trade Organization, Germany is also the world's top exporter, ahead of the United States and number two in the world regarding to imports. It currently (2005) has the largest trade surplus of all countries in the world. While it has positive trade balances with most of its EU-partners or the United States, it runs trade deficits with China and Japan. A major issue of concern remains the persistently high unemployment rate and weak domestic demand which slows down economic growth. Eastern Germany in particular suffers from a lack a solid base of small and medium-sized companies, which provided the foundation for the Federal Republic's economic prosperity and is responsible in great measure for Germany's lag in economic growth. Domestic demand has stagnated for many years due to wage stagnation and zealous cost-cutting by the federal state. Lack of consumer demand might have caused many of the prevalent economic problems. Germany's government runs a restrictive fiscal policy and has cut numerous regular jobs in the public sector. Since reunification there has been a net loss of estimated 1 million such jobs. But while regular employment in the public sector shrank, "irregular" government employment like so called 1-Euro-Jobs, government supported self-employment (ICH-AG) and job training increased. Despite the tense situation in eastern Germany, total government employment in Germany remains lower than in other states such as the United Kingdom or Canada. Economical and political discussion in Germany today concentrates on whether Germany needs more "market reforms" such as deregulation of the labor market, more low income jobs, lower social security feeds, lower taxes for enterprises and employers, etc., or already passed too many reforms. In view of shifting socioeconomic trends, more and more people in Germany distrust the sense and direction of the reforms over the last years, although Conservatives insist that they are necessary to make Germany competitive on the global stage. |
Germany is a leading nation in scientific research and the production of innovative technological products. Some of the most important industrial contributions include rocketry, material science, and chemical products. As in physics and chemistry, Germans are a leading nation in the Nobel Prizes for physiology or medicine.
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As mentioned above the exporting of goods is an essential part of the German economy and one of the most relevant reasons for Germany's wealth. Like many other export oriented countries, Germany itself does not have the climate or the natural resources necessary to support a high living standard. Overtaking the United States in 2003, Germany is now the world's largest exporter of goods with $1.016 trillion exported in 2005. |
Germany Information: Inside |
