Germany and its Economy
Known as the "fair" capital, Germany lies in the center of Europe and
in the center of the European home market. Approximately two thirds of
the top international fairs take place in Germany. Germany is
successful. A leader in world trade, Germany is the third largest
economy in the world and the biggest market in Europe. It wasn't
always this way though; European power struggles wounded the country
in two devastating World Wars in the first half of the 20th century
and left the country dominated by the victorious Allied powers of the
US, UK, France, and the Soviet Union in 1945.
Germany has been through all of the phases of the business cycle many
times. It even suffered immense depression after World War One in the
early 20th century. The Treaty of Versailles dug a deep hole in
Germany's economy because the Allies had gotten a little greedy with
their revenge. Payments made by Germany to the Allies represented a
drain of capital that would have otherwise been directed toward the
growth of German industry. In order to pay its debts for World War I,
Germany engaged in a huge "hyperinflation" of its currency, printing
paper marks until, in 1923, when they became worthless. The
destruction of the currency wiped out the people's savings, which
meant that there would be very little capital available within the
German economy for years to come. With Adolf Hitler rising to power in
1933, the German economy became increasingly socialized and
militarized, passing through recovery to prosperity, which scared
their foreign investors and made a healthy economic recovery
nonexistent.
Germany is referred to as a "social" market economy and remains a key
member of Europe's economic, polit...
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...Germany is doing well other than a few
scarcities. Because they are the third leading economy in the world,
they rank up there with the U.S.and France. Germany has a few
shortages in labor and energy, but overall they succeed in exports and
GDP growth. Germany is an economy not much different than our own.
Besides both being defined as market economies, Germany and the U.S.
also share the same periods of business cycle changes. They both
experienced the Great Depression in the 1920's and '30s and are even
witnessing a recession now. I would agree that an economy is just like
a business. An economy goes through the same downfalls and good times
just like a business, an economy experiences depressions, recessions,
recoveries and prosperities and the goal of an economy is to have a
surplus of money while supplying its citizens with needed goods and
services.
The United States and Germany have many similarities and differences. The United States has a higher population than Germany, but for some things they are very close to each other. Both germany and the United States have a very good GDP and it is rising every year. Neither countries are on their way to a recession. The most important thing for all countries is to stay away from a recession. The aspects that play into determining GDP is things like unemployment rate, imports and exports, and consumer spending.
World War II was a war of blood. Blood replaced water in the irrigated fields of the humble farmer and washed away the lives of so many of our own. Blood poured out of the pens which signed orders of transcription, the seals which signified trades of weapons, the lettered keys which broke a new heart with every passage of staccato taps. In World War II, we learned that out of every wound comes red blood, and that out of every weeping eye comes tears. The tears of companions, of wives, of mothers, mingled with the blood of the fallen, leaving a stain on the face of diplomacy which will fade only with time. And time is definitely crucial, as this world of blood and tears must be mopped back up before the reminders of purpose, of courage, of patriotism, are absorbed by the unforgiving ground of ignorance. Before they are forgotten.
Germany's Strong Economic Growth After 1871 In January of 1871 Wilhelm of Prussia was proclaimed Emperor of Germany. The many German states had been unified with Prussiaat their head, the second Reich began. This unification of Germany and the 'iron chancellor' Otto Von Bismarck then lead Germany through a period of huge economic growth. In the space of 50 years Germany grew from a feudal simplicity to the great power which terrorised Europe throughout the First World War.
Germany experienced a lot of economic changes after Germany was split into East Germany and West Germany. Initially, West Germany was established as a federal republic but was established as it’s own independent nation in 1955. Many events happened in West Germany from the 1950s to the 1980s before Germany became one nation again. There were events such as “oils price shocks, generous social programs, rising deficits and loss of control.” East Germany’s economy was strong due to the Soviet Union’s reliance on Eastern Germany’s production of machine tools, chemicals and electronics. It became appealing to reunite with West Germany when the value of East Germany’s currency became “worthless” outside of it’s country because Eastern Germany was relying on the Soviet Union’s demand (Marketline).
Until the second half of the nineteenth century Germany wasn’t the country we identify it to be nowadays, it was made up by a handful of states, each with different laws, currencies and trade barriers. The moment the Chancellor, Otto von Bismarck was in charge of policies, things started to change, he essentially created Germany. In 1948, unification started, and each state became part of a whole, with the same laws and currency, and most importantly, trade barriers were abolished. Consequently, trade between the states grew radically and boosted technological industrial growth. The government encouraged growth through adapted policies, in addition, German banks were created and were able to supply credit and investments to somehow stimulate the appearance of new businesses. Furthermore, as a consequence of the railway construction, coal extraction and iron manufacture reached their highest points in the nineteenth century. However Bismarck’s main aim was to protect the new Germany from wars with Russia and France, and the way he chose to achieve his goal was by engaging in a foreign policy manipulating game with the European powers: he tried to maintain good relations with Hungary and Russia and isolate France.
German Economy in the 1920s. 2014. German Economy in the 1920s. [ONLINE] Available at:http://www.history.ucsb.edu/faculty/marcuse/classes/33d/projects/1920s/Econ20s.htm. [Accessed 01 May 2014].
Following the Second World War, Germany was rebuilt out of practically nothing into one of the richest countries of the world. This well-known transformation is known as the "Wirtschaftswunder" (wonder of economics). Yet in the recent reunification of West and East Germany, German leadership has ignored crucial lessons from this successful period of transformation. Three problems highlight this claim:
The United States economy had become so co-dependent with other countries’ economies because there was so much overseas investment. It started overseas. The Germans had a period of speculation and were trying to reduce the changes of inflation. They were raising interest rates to make their currency more valuable...
From 1919 through 1924, Germany was a deeply troubled country due to massive social, political, and economic problems. The Weimar Republic that came to power in Germany after The Great War was widely unpopular, due to the leadership accepting the harsh terms of the Treaty of Versailles and introducing a new form of government after the Kaiser’s abdication. Unfortunately, the government also had to face attacks from both extreme Left and Right wing parties. The result of the country’s disunity was hyperinflation, strikes, and an ever worsening economy due to the Treaty of Versailles. It was not until 1923 that Gustav Stresemann, the newly appointed Chancellor, brought Germany into a new Golden era.
Severe economic problems arose in Germany essentially due to the punitive provisions of the Treaty of Versailles. “The German government began to print money to pay its bills.” (McKay, 872). In order to make up for the massive debt and reparations connected to the Treaty of Versailles, the government started to print loads of money. The influx of money across Germany due to newly printed bills caused prices to rise. Money became rather worthless with an abundance of it, which hurt many people’s incomes. Hyperinflation soon occurred, which put the economy in a weak position and further contributed to the downfall of the Weimar Republic.
Richard Bessel’s article stresses the political structure of Weimar Germany as the cause of its failure. Its structure was flawed in numerous ways, all of which contributed to its inevitable failure. First of all, the problems within Germany due to the First World War were massive. This caused economic, political and social problems which first had to be dealt with by the new Weimar government. The loss of the war had left Germany with huge reparations to pay, and massive destruction to repair. In order to gain the capital needed to finance efforts to rebuild, and repay the Allies, the economy had to be brought back to its prewar levels. This was not an easy task.
After years of trying to unify as one nation and countless failures, the German people now believed that they themselves were among the superior races of the world and it was Germany’s destiny to become the greatest nation the world had ever seen. Under Bismarck’s rule the economy boomed. The German Industrial Complex, powered by its heavy war production, made many men and the nation itself very wealthy. This wealth and prosperity led to an intoxicating feeling among its people, a feeling that they were the next great world
In my research project I will be talking about the history of Lithuanian economy and how it had changed since the country became independent and took a place as a member of a European Union. In my work you will be able to see different points of view of being a citizen of the EU and the problems the countries are facing to get this membership.
In 1947, the Western portion of Germany instituted a government under the watchful eyes of the Western Allies. The Soviet sector followed suit in 1949. During this period, the elaborate governance structure of greater Berlin broke under the strain of Cold War tensions. What emerged was West Berlin, which took up ties with West Germany, known as the Federal Republic of Germany. East Berlin, which comprised the ruins of the old and historic center of Berlin and outlying districts to the East, became the capital of the German Democratic Republic. After World War II, the Americans pumped capital into West Germany through the Marshall Plan, which resulted in one of the world's strongest economies, enormous prosperity and a stable democracy. Germany has been divided ever since and though at every opportunity, lip service was paid by all western nations to its eventual reunification, no one took the matter seriously.
Hyper- inflation in Germany 1923 was that of a huge blow to their economy and moreover, to their self-esteem. The value of the German mark became next to nothing, and people ended up having to trolley wheel-barrows full of money just to buy a loaf of bread. There are several causes for this happening in the first place, Germany had no goods to trade with the first place and they weren’t exactly on good terms with other countries to be in a position to do so. Then there was the severe impact of the treaty of Versailles that was “happily bestowed” upon them after the First World War. The French invasion of the Ruhr caused an uproar in the German government and it didn’t help in terms of Germany’s economy either. These were just a few main causes of the hyper-inflation in Germany, however, to find out what really happened what the real truth is we would have to accept the fact that real answer lies with inputs from all of these causes as they all played a part.