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The country today

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The country today

Germany is a highly decentralized federal state whose human, political and administrative facets reflect very individual traits that are rooted in its history. This brief, factual portrait highlights some of the aspects peculiar to the German nation and to life in Germany today.


After World War II, the economy of West Germany made a spectacular recovery, generally referred to as an “economic miracle” (Wirtschaftwunder) . Indeed, the considerable reconstruction effort coupled with judicious fiscal and monetary policy propelled the West German economy to third place worldwide, behind the United States and Japan. Good relations between employers and trade unions and a powerful banking system helped maintain this growth. The “social market economy” (state intervention to correct the perverse market effects) long provided the context of this development, which was also stimulated by a favorable economic climate.

Despite the strong development of service-sector activities, industry remains the cornerstone of Germany’s economic strength.

The industrial sector, which represents around one third of Gross Domestic Product GDP), consists of large international groups with varied activities (Thyssen-Krupp, Bayer, Hoechst, Siemens, Bosch, BMW, Volkswagen, etc.) and countless small but dynamic companies.

The reunification of the two Germanies in 1990 was an enormous challenge; the high cost of the economic integration of the former German Democratic Republic severely impacted the competitiveness of the Federal Republic. The modernization of the new Länder and social support for employees in the East put a great strain on the federal budget. However, the massive investments made by the Federal Government, increased taxation, and structural aid from Europe finally allowed the East to make the transition from a planned economy to a market economy. Today, Germany is the world‘s largest exporter (mostly car, machinery and metals) and has the third-largest economy globally. After a long period of stagnation with an average growth rate of 0.7% between 2001–05 and chronically high unemployment, stronger growth led to a major drop in unemployment to about 7.7% in late 2007 (vs 11.7% in 2005) and a concurrent economic growth of 2.6%. In 2008 a fall in growth rate to below 2% was anticipated as the strong euro, high oil prices, tighter credit markets and slowing growth abroad take their toll.

Government and Administration

The Bipartite System

Since 1949, two parties—the CDU and the SPD—have dominated political life in the Federal Republic. A rare alliance between these two groups arose in 1966 with the formation of the “great coalition” (Große Koalition). One of the most significant recent developments in German politics is the rise of the ecology party, Die Grünen ( The Greens ).

The conservative Christian Democratic Union (CDU) and their Bavarian counterpart, the CSU, joined with liberal allies from the FDP in 1949 to elect Adenauer as chancellor. The party returned to power under the aegis of Helmut Kohl , who was elected Chancellor four times (1983, 1987, 1991 and 1994).

The Social Democrat Party (SPD) came to power for the first time in 1969 led by Willy Brandt . The SPD allied with the liberals again in 1974 under Helmut Schmidt . They also claimed victory in the 1998 elections under the leadership of Gerhard Schröder .

Recent Developments

Schröder governed in a coalition with the Green Party was re-elected in 2002. The Free Democratic Party (FDP) , capable of making alliances with either of the two main parties, has for a long time acted as referee on the political chessboard. Chairman of the party (and Leader of the Opposition), Guido Westerwelle , is the archetypal dynamic politician. Successor of the SED, East Germany’s former communist party, the Party of Democratic Socialism (PDS) has a considerable followingin the new Länder.

In 2005, the PDS entered an electoral alliance with the western Germany-based Labor and Social Justice—The Electoral Alternative (WASG) and won 8.7 percent of the vote in Germany’s September 2005 federal elections (more than double the PDS’ 4% share in the 2002 election).

On June 16, 2007, the two groupings merged to form a unified party called The Left (Die Linke).

In 1983, Die Grünen entered the Bundestag. As part of the 1998 coalition with the SPD their leader, Joschka Fischer , took up office as Foreign Secretary in Schröder’s government.

Continued frustration with high unemployment, high taxes and slow economic growth (due in part to Germany’s reunification in 1990, and in part to the economic globalization that has affected Western industrial nations worldwide) led to an impatience with the liberal SPD -Green coalition in federal elections in 2005. The more conservative CDU/CSU regained majority status in the Bundestag, resulting in the naming of Angela Merkel as German Chancellor.

Merkel serves as Germany’s first female chancellor; its first East German chancellor since reunification; and its youngest chancellor since World War II.

A Federal State

Subdivided throughout history into largely autonomous regions, owing allegiance to no single capital (prior to 1945 Berlin was only capital of the Reich for just over 70 years), Germany has naturally gravitated towards a federal governmental structure. Today it is a highly decentralized state whose Länder, or regions enjoy considerable powers.

The Basic Law established in 1949 guarantees individual liberties and defines the institutions of a republic founded on democratic principles. The Federal Parliament is composed of two chambers: the Bundestag , a national assembly of 656 members elected by universal suffrage, is invested with legislative power, chooses the chancellor, and controls the government; the Bundesrat , a federal council comprising members drawn from the local governments administering the Länder, is concerned with certain aspects of legislative power, particularly when they affect the Länder. The Bundesrat also exercises certain control over the government, with the government being required to submit all bills to it.

The Chancellor holds executive power and is elected by the Bundestag, to whom she is accountable. He is invested with wide-ranging powers and defines the broad lines of government policy. The government introduces laws (adopted by the Bundestag) and is responsible for their implementation. The role of the Federal President ( Bundespräsident ) is essentially representative: it is he/she who concludes treaties with foreign states, and appoints or removes judges, federal functionaries and federal ministers suggested by the Chancellor. Lastly, the supreme judicial authority of the Federal Republic is the Constitutional Court ,based in Karlsruhe. It ensures compliance with the Basic Law, guards constitutional principles, and acts as arbitrator in disputes between the Federal Government and the Länder.


With over 82 million inhabitants, Germany is the most highly populated country in the European Union and the second most populous in Europe after Russia. It has been in demographic decline for about 25 years and is experiencing an accelerated ageing of the population (the average age—over 43.4—is the highest in Europe).

Nearly 90% of Germans live in towns with more than 2 000 inhabitants, and the western part of the country has by far the highest population densities. Although immigration has, since the 1960s, provided a significant additional source of labor, the tightening of legislation has considerably reduced the influx of people from abroad. About 7.2 million foreigners live in Germany, including about 2 million Turks, 700 000 people from the former Yugoslavia, 600 000 Italians, 360 000 Greeks and 280 000 Poles.

Traditions and Customs

Germany is a completely modern nation but one with strong traditions and links with its past.

It can be completely “en vogue” (Berlin, Hamburg) or somewhat conservative (Munich). In southern Germany especially, folkloric garments such as Lederhosen and Dirndl dresses, are worn regularly by people of all ages and from all walks of life.

You can almost never go wrong with using the formal ‘Sie’ instead of the informal ‘Du’ when addressing someone. ‘Kaffee und Kuchen’ (coffee and cake) on Sunday afternoons is as time-honored as popping down to a beer garden with friends or screaming your lungs out at soccer games. Children and the elderly are well respected, as are dogs and the rights of bicyclists on their dedicated paths. The automobile is a bit of a sacred cow where even so much as a fingerprint may well elicit scorn.

Food and Drink

Although there is some regional variation, German food is generally rather rich and hearty. Typical dishes pair potatoes with a piece of meat (most likely pork—often sausages) and a cooked vegetable (e.g. sauerkraut or red cabbage).

Of late, though, a new generation of energetic chefs has been busy modernizing traditional menus by using fresh, locally sourced and seasonal ingredients and making dishes lighter and healthier. Thanks to Germany’s large immigrant population, especially in the cities, you are never far from pizza, doner kebab, or Chinese food!

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