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Germany
After World War II, Germany was separated into the western Federal
Republic of Germany (FRG) and the eastern German Democratic Republic
(GDR). While FRG pursued Western strategies, the GDR was aligned
with the USSR and the Warsaw Pact. FRG and GDR united when the Cold
War ended in 1990, and efforts have since been made to increase
Eastern productivity and wages. In 1999, Germany, the country with
the largest European economy and population, implemented the euro.
Lately, Germany has been experiencing a decline in its unemployment
rate; this happens at a time when, the economic demand is
increasing, German enterprises want to fill more open positions.
Capital City: Berlin (+1 GMT)
Chief of State: President Horst KOEHLER
Head of Govt.: Chancellor Angela MERKEL
Currency: Euro
Main Cities: Hamburg, Munich, Cologne
Major Languages: German
Calling Code: 49
Voltage: 110/220V
Stock Exchanges: Borse Berlin-Bremen
Primary Religions: Protestant, Roman Catholic
Main Airports
Berlin-Tegel (TXL), Frankfurt/M (FRA), Munich (MUC)
U.S. Embassy
Neustaedtische Kirchstrasse 4-5 10117 Berlin
tel: (49 30) 238-5174
Statistics
- GDP: purchasing power parity:
- $2.504 trillion (2005 est.)
- GDP - real growth rate:
- 0.9% (2005 est.)
- GDP - per capita: purchasing power parity:
- 30,400 (2005 est.)
- Inflation rate (consumer prices):
- 2% (2005 est.)
- Labor force:
- 43.32 million (2005 est.)
- Exports:
- $1.016 trillion f.o.b. (2005 est.)
- Exports - partners:
- France 10.1%, US 8.8%, UK 7.9%, Italy 6.9%, Netherlands
6.1%, Belgium 5.6%, Austria 5.4%, Spain 5.1% (2005)
- Imports:
- $801 billion f.o.b. (2005 est.)
- Imports - partners:
- France 8.7%, Netherlands 8.5%, US 6.6%, China 6.4%, UK 6.3%,
Italy 5.7%, Belgium 5%, Austria 4% (2005)
- Population:
- 82,422,299 (July 2006 est.)
- Population growth rate:
- -0.02% (2006 est.)
- Population Below Poverty Line:
- NA%
- Major Industries:
- among the world's largest and most technologically advanced
producers of iron, steel, coal, cement, chemicals, machinery,
vehicles, machine tools, electronics, food and beverages,
shipbuilding, textiles
- Employing Workers: 129*
- Registering Property: 42*
- Enforcing Contracts: 29*
- Closing a Business: 28*
- *2006 World Bank rank out of 175 countries
- Starting a Business
The table below shows the number of steps and the amount of
time needed to start a business, on average
| Indicator |
Germany |
Region |
| Procedures (number) |
9 |
|
| Time (days) |
24 |
|
Germany Risk Assessment
Country Rating
Rating: A1
The political and
economic situation is very good. A quality business environment has
a positive influence on corporate payment behaviour. Corporate
default probability is very low on average.
Risk Assessment
Exports and productive investment
were the main economic engines again in 2007 with exports holding up
well in the face of the euro appreciation against the dollar. They
comprise mostly capital goods, high-end cars, and chemical and
pharmaceutical products relatively insensitive to price variations.
Moreover, 60 per cent go to the European Union with a good
proportion of the balance representing sales to emerging countries
in Asia and Central and Eastern Europe where demand has remained
strong. Expiration of advantageous amortisation rules late last year
spurred productive investment. Household consumption and residential
construction suffered conversely from the increase in VAT.
A slowdown is expected in 2008 with a
smaller positive contribution from foreign trade not offset by the
recovery of private consumption. The growth of exports will be
slower due to the still unfavourable exchange-rate effect on
price-competitiveness and to the economic slowdowns in Europe and
the United States. Import growth will remain strong meanwhile
reflecting the revival of household demand, buoyed by the continuing
decline of unemployment and the concomitant decline in the
unemployment-insurance contribution rate as well as by increases in
civil service wages, pensions, and aid for the education of
children. The revival of private consumption will nonetheless be
modest due to the unfavourable effect of the rising cost of credit
as well as of energy, and food. Faced with weaker foreign demand,
industry will slow the pace of its investments.
Corporate payment behaviour has remained
good as evidenced by the excellent level of the Coface payment
incident index for Germany and the eight per cent decline in
bankruptcies in the first nine months of 2007. The reduction of
corporate income tax this year in a context of balanced public
finances will have a positive influence on that trend. The
residential construction sector will remain mired in difficulty,
however, particularly in the eastern regions. And the kitchen
furniture sector also presents a high risk profile at this juncture.
The automotive sub-contracting sector, meanwhile, has suffered from
the increasing pace of relocations to the eastern part of the
continent.
STRENGTHS
- Good geographic and sectoral
specialisation allied with high competitiveness has generated an
ample trade surplus.
- Smaller —
mittelstand
— companies play a pivotal role in the German economy as regards
employment, innovation and competitiveness.
- "Co-determination" of
joint-stock companies, mandatory with over 500 employees, has
fostered consensus on strategic decisions, particularly
involving restructuring.
- Restoring equilibrium to public
and social security accounts has given the government more room
for manoeuvre.
- The presence of Central and East
European countries in the European Union and their geographic
proximity have provided companies with sales and production
opportunities.
WEAKNESSES
- Marked regional disparities
between the traditional economic fabric in the North and the
growth-sector focus in the South compound the persistent problem
posed by the lagging economies of the eastern Länder (federal
states).
- The familial character of
mittelstand
companies tends to complicate
matters in obtaining bank financing that must comply with Basle
II transparency rules.
- Despite mergers the banking
landscape is still fragmented, which tends to undermine bank
profitability.
- The inadequacy of facilities for
small children has contributed to the low birth rate and the
ageing of the population, which, in turn, have affected
consumption.
- The inadequate general education
of many youth has led companies to reduce their involvement in
the apprenticeship programmes that concern two-thirds of a given
age group and has also contributed to a lack of engineers.
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