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Background Note:
Germany PROFILE
OFFICIAL NAME: Geography People Government Economy PEOPLE Germany has one of the world's highest levels of education, technological development, and economic productivity. Since the end of World War II, the number of youths entering universities has more than tripled, and the trade and technical schools of the Federal Republic of Germany (FRG) are among the world's best. With a per capita income level of more than $22,900, Germany is a broadly middle class society. A generous social welfare system provides for universal medical care, unemployment compensation, and other social needs. Millions of Germans travel abroad each year.
With unification on October 3, 1990, Germany began the major task of bringing the standard of living of Germans in the former German Democratic Republic (GDR) up to that of western Germany. This has been a lengthy and difficult process due to the relative inefficiency of industrial enterprises in the former GDR, difficulties in resolving property ownership in eastern Germany, and the inadequate infrastructure and environmental damage that resulted from years of mismanagement under communist rule.
Economic uncertainty in eastern Germany is often cited as one factor contributing to extremist violence, primarily from the political right. Confusion about the causes of the current hardships and a need to place blame has found expression in harassment and violence by some Germans directed toward foreigners, particularly non-Europeans. The vast majority of Germans condemn such violence.
HISTORY However, Emperor William II's dynamic expansion of military power contributed to tensions on the continent. The fragile European balance of power, which Bismarck had helped to create, broke down in 1914. World War I and its aftermath, including the Treaty of Versailles, ended the German Empire.
Fascism's Rise and Defeat The National Socialist (Nazi) Party, led by Adolf Hitler, stressed nationalist and racist themes while promising to put the unemployed back to work. The party blamed many of Germany's ills on the alleged influence of Jewish and non-German ethnic groups. The party also gained support in response to fears of growing communist strength. In the 1932 elections, the Nazis won a third of the vote. In a fragmented party structure, this gave the Nazis a powerful parliamentary caucus, and Hitler was asked to form a government. He quickly declined. The Republic eroded and Hitler had himself nominated as Reich Chancellor January 1933. After President Paul von Hindenburg died in 1934, Hitler assumed that office as well. Once in power, Hitler and his party first undermined and then abolished democratic institutions and opposition parties. The Nazi leadership immediately jailed Jewish opposition and other figures and withdrew their political rights. The Nazis implemented a program of genocide, at first through incarceration and forced labor and then by establishing death camps. Nazi revanchism and expansionism led to World War II, which resulted in the destruction of Germany's political and economic infrastructures and led to its division.
After Germany's unconditional surrender on May 8, 1945, the United States, the United Kingdom, the U.S.S.R. and, later, France occupied the country and assumed responsibility for its administration. The commanders in chief exercised supreme authority in their respective zones and acted in concert on questions affecting the whole country.
The United States, the United Kingdom, and the Soviet Union agreed at Potsdam in August 1945 to treat Germany as a single economic unit with some central administrative departments in a decentralized framework. However, Soviet policy turned increasingly toward dominating that part of Europe where their armies were present, including eastern Germany. In 1948, the Soviets, in an attempt to abrogate agreements for Four Power control of the city, blockaded Berlin. Until May 1949, the Allied-occupied part of Berlin was kept supplied only by an Allied airlift. The Berlin airlift succeeded in forcing the Soviets to accept, for the time being, the Allied role and the continuation of freedom in a portion of the city, West Berlin.
Political Developments in West Germany On May 23, 1949, the Basic Law, which came to be known as the constitution of the Federal Republic of Germany, was promulgated. Conrad Adenauer became the first federal Chancellor on September 20, 1949. The next day, the occupation statute came into force, granting powers of self-government with certain exceptions.
The FRG quickly progressed toward fuller sovereignty and association with its European neighbors and the Atlantic community. The London and Paris agreements of 1954 restored full sovereignty (with some exceptions) to the FRG in May 1955 and opened the way for German membership in the North Atlantic Treaty Organization (NATO) and the Western European Union (WEU).
The three Western Allies retained occupation powers in Berlin and certain responsibilities for Germany as a whole, including responsibility for the determination of Germany's eastern borders. Under the new arrangements, the Allies stationed troops within the FRG for NATO defense, pursuant to stationing and status-of-forces agreements. With the exception of 45,000 French troops, Allied forces were under NATO's joint defense command. (France withdrew from NATO's military command structure in 1966.)
Political life in the FRG was remarkably stable and orderly. After Adenauer's chancellorship (1949-63), Ludwig Erhard (1963-66) and, Kurt Georg Kiesinger (1966-69) served as Chancellor. Between 1949 and 1966 the united caucus of the Christian Democratic Union (CDU) and Christian Social Union (CSU), either alone with the smaller Free Democratic Party (FDP), formed the government. Kiesinger's 1966-69 "Grand Coalition" included the FRG's two largest parties, CDU/CSU and the Social Democratic Party (SPD). After the 1969 election, the SPD, headed by Willy Brandt formed a coalition government with the FDP. Brandt resigned in May 1974, after a senior member of his staff was uncovered as an East German spy.
Helmut Schmidt (SPD) succeeded Brandt, serving as Chancellor from 1974 to 1982. Hans-Dietrich Genscher, a leading FDP official, became Vice Chancellor and Foreign Minister, a position he would hold until 1992.
In October 1982, the FDP joined forces with the CDU/CSU to make CDU Chairman Helmut Kohl the Chancellor. Following national elections in March 1983, Kohl emerged in firm control of both the government and the CDU. He served until the CDU's election defeat in 1997. In 1983, a new political party, the Greens, entered the Bundestag for the first time.
Political Developments in East Germany The GDR established the structures of a single-party, centralized, communist state. On July 23, 1952, the GDR abolished the traditional Laender and established 14 Bezirke (districts). Formally, there existed a "National Front"--an umbrella organization nominally consisting of the SED, four other political parties controlled and directed by the SED, and the four principal mass organizations (youth, trade unions, women, and culture). However, control was clearly and solely in the hands of the SED. Balloting in GDR elections was not secret. On July 17, 1953, East Germans revolted against totalitarian rule. The FRG marked the bloody revolt by making the date the West German National Day, which remained until reunification.
Inter-German Relations In 1969, Chancellor Brandt announced that the FRG would remain firmly rooted in the Atlantic Alliance but would intensify efforts to improve relations with Eastern Europe and the GDR. The FRG commenced this "Ostpolitik" by negotiating nonaggression treaties with the Soviet Union, Poland, Czechoslovakia, Bulgaria, and Hungary. Based upon Brandt's policies, in 1971 the Four Powers concluded a Quadripartite Agreement on Berlin to address practical questions the division posed, without prejudice to each party's view of the city's Four Power status.
The FRG's relations with the GDR posed particularly difficult questions. Though anxious to relieve serious hardships for divided families and to reduce friction, the FRG under Brandt was intent on holding to its concept of "two German states in one German nation." Relations improved, however, and in September 1973, the FRG and the GDR were admitted to the United Nations. The two Germanys exchanged permanent representatives in 1974, and, in 1987, GDR head of state Erich Honecker paid an official visit to the FRG.
German Unification On October 18, Erich Honecker resigned and was replaced by Egon Krenz. The exodus continued unabated, and pressure for political reform mounted. Finally, on November 9, the GDR allowed East Germans to travel freely. Thousands poured through the Berlin Wall into the western sectors of Berlin. The Wall was opened.
On November 28, FRG Chancellor Kohl outlined a 10-point plan for the peaceful unification of the two Germanys. In December, the GDR Volkskammer eliminated the SED's monopoly on power. The SED changed its name to the Party of Democratic Socialism (PDS), and numerous political groups and parties formed. The communist system had been eliminated. A new Prime Minister, Hans Modrow, headed a caretaker government that shared power with the new, democratically oriented parties.
In early February 1990, Chancellor Kohl rejected the Modrow government's proposal for a unified, neutral Germany. Kohl affirmed that a unified Germany must be a member of NATO. Finally, on March 18, the first free elections were held in the GDR, and Lothar de Maiziere (CDU) formed a government under a policy of expeditious unification with the FRG. The freely elected representatives of the Volkskammer held their first session on April 5, and the GDR peacefully evolved from a communist to a democratically elected government.
Four Power Control Ends Of key importance was overcoming Soviet objections to a united Germany's membership in NATO. The Alliance was already responding to the changing circumstances, and, in NATO, issued the London Declaration on a transformed NATO. On July 16, after a bilateral meeting, Gorbachev and Kohl announced an agreement in principle to permit a united Germany in NATO. This cleared the way for the signing of the "Treaty on the Final Settlement With Respect to Germany" in Moscow on September 12. In addition to terminating Four Power rights, the treaty mandated the withdrawal of all Soviet forces from Germany by the end of 1994. This made it clear that the current borders were final and definitive, and specified the right of a united Germany to belong to NATO. It also provided for the continued presence of British, French, and American troops in Berlin during the interim period of the Soviet withdrawal. In the treaty, the Germans renounced nuclear, biological, and chemical weapons and stated their intention to reduce German armed forces to 370,000 within 3 to 4 years after the Conventional Armed Forces in Europe (CFE) Treaty, signed in Paris on November 19, 1990, entered into force.
German unification could then proceed. In accordance with Article 23 of the FRG's Basic Law, the five Laender (which had been reestablished in the GDR) acceded to the FRG on October 3, 1990. The FRG proclaimed October 3 as its new national day. On December 2, 1990, all-German elections were held for the first time since 1933.
GOVERNMENT AND POLITICAL CONDITIONS The Bundestag, which serves a 4-year term, consists of at least twice the number of electoral districts in the country (299). When parties' directly elected seats exceed their proportional representation, they may receive more seats. The number of seats in the Bundestag will reduce to 598 for the 2002 elections. The Bundesrat (upper chamber or Federal Council) consists of 69 members who are delegates of the 16 Laender (states). The legislature has powers of exclusive jurisdiction and concurrent jurisdiction with the Laender in areas specified in the Basic Law. The Bundestag has primary legislative authority. The Bundesrat must concur on legislation concerning revenue shared by federal and state governments and those imposing responsibilities on the states.
Germany has an independent federal judiciary consisting of a constitutional court, a high court of justice, and courts with jurisdiction in administrative, financial, labor, and social matters. The highest court is the Bundesverfassungsgericht (Federal Constitutional Court), which ensures a uniform interpretation of constitutional provisions and protects the fundamental rights of the individual citizen as defined in the Basic Law.
Recent Election Issues Political Parties Christian Democratic Union/Christian Social Union (CDU/CSU). An important aspect of postwar German politics was the emergence of a moderate Christian party--the Christian Democratic Union (CDU)--operating in alliance with a related Bavarian party, the Christian Social Union (CSU). Although each party maintains its own structure, the two form a common caucus in the Bundestag and do not run opposing campaigns. The CDU/CSU has adherents among Catholics, Protestants, rural interests, and members of all economic classes. It is generally conservative on economic and social policy and more identified with the Roman Catholic and Protestant churches. Helmut Kohl served as chairman of the CDU from 1973 until the party's electoral defeat in 1998, when he was succeeded by Wolfgang Schaeuble. Schaeuble resigned in early 2000 as a result of a party financing scandal. Angela Merkel is now party leader. Edmund Stoiber took over the CSU chairmanship early in 1999. Stoiber, currently Minister-President of Bavaria, is the CDU/CSU Chancellor candidate for the September 2002 elections.
Alliance 90/Greens. In the late 1970s, environmentalists organized politically as the Greens. Opposition to nuclear power, military power, and certain aspects of highly industrialized society were principal campaign issues. In the December 1990 all-German elections, the Greens merged with the Eastern German Alliance 90, a loose grouping of civil rights activists with diverse political views. The Greens joined a federal government for the first time, forming a coalition with the SPD. Joschka Fischer became vice chancellor and foreign minister in the new government.
Free Democratic Party (FDP). The FDP has traditionally been composed mainly of middle and upper class Protestants, who consider themselves heirs to the European liberal tradition. The party has participated in all but three postwar federal governments and has spent only 8 years out of government in the 50-year history of the Federal Republic. In 2001, Guido Westerwelle replaced Wolfgang Gerhardt as party chairman.
Party of Democratic Socialism (PDS). The PDS was established in December 1989 as the successor party to the SED (the communist party of the GDR). It renounced most of the extreme aspects of SED policy but has retained much of its Marxist ideology.
Other parties. In addition to those parties that won representation in the Bundestag in 1998, a variety of minor parties won a cumulative total of 5.9% of the vote, up from 3.5% in 1994. Sixteen other parties were on the ballot in one or more states but not qualified for representation in the Bundestag. The right-wing parties remained fragmented and ineffectual at the national level.
Principal Government Officials Germany maintains an embassy in the United States at 4645 Reservoir Road NW, Washington, DC 20007 (tel. 202-298-4000). Consulates general are located in Atlanta, Boston, Chicago, Detroit, Houston, Los Angeles, Miami, New York, San Francisco, and Seattle. Germany has honorary consuls in more than 30 U.S. cities.
ECONOMY From the 1948 currency reform until the early 1970s, West Germany experienced almost continuous economic expansion. Real GDP growth slowed down, and even declined, from the mid-1970s through the recession of the early 1980s. The economy then experienced 8 consecutive years of growth that ended with a downturn beginning in late 1992. Since unification, Germany has seen annual average real growth of only about 1.5% and stubbornly high unemployment. The best performance since unification was in 2000, when real growth reached 3.0%. Most forecasters expect growth of about 0.5% in 2002, while unemployment remains at an average of 9.1%.
Germans often describe their economic system as a "social market economy." The German Government provides an extensive array of social services. The state intervenes in the economy by providing subsidies to selected sectors and by owning some segments of the economy, while promoting competition and free enterprise. The government has restructured the railroad system on a corporate basis, privatized the national airline, and is privatizing telecommunications and postal services.
The German economy is heavily export-oriented, with exports accounting for over one-third of national output. As a result, exports traditionally have been a key element in German macroeconomic expansion. Germany is a strong advocate of closer European economic integration, and its economic and commercial policies are increasingly determined within the European Union (EU). Germany uses the common European currency, the Euro, and the European Central Bank sets monetary policy.
Despite this external vulnerability, most foreign and German experts consider domestic structural problems to be the main cause of recent sluggish performance. An inflexible labor market is the main cause of persistently high unemployment. Heavy bureaucratic regulations burden many businesses and the process of starting new businesses. German employers, even during periods of relatively fast growth, say they often prefer to invest overseas or install more machinery, rather than make job-creating investments at their domestic facilities.
Eleven years after unification, Germany has made great progress in raising the standard of living in eastern Germany, introducing a market economy and improving its infrastructure. At the same time, the process of convergence between east and west is taking longer than originally expected and, on some measures, has stagnated since the mid-1990s. Eastern economic growth rates have been lower than in the west in recent years, unemployment is twice as high, prompting many skilled easterners to seek work in the west, and productivity continues to lag. Eastern consumption levels are dependent on public net financial transfers from west to east totaling about $65 billion per year, or more than 4% of the GDP of western Germany. In addition to social assistance payments, the government plans to extend funds to promote eastern economic development through 2019.
The United States is Germany's second largest trading partner, and U.S.-German trade has continued to grow strongly. Two-way trade in goods and services totaled $88 billion in 2001. U.S. exports to Germany were $30.1 billion while U.S. imports from Germany were twice as high, $59.2 billion. At $29.1 billion, the United States' fifth largest trade deficit is with Germany. Major U.S. export categories include aircraft, electrical equipment, telecommunications equipment, data processing equipment, and motor vehicles and parts. German export sales are concentrated in motor vehicles, machinery, chemicals, and heavy electrical equipment. Much bilateral trade is intra-industry or intra-firm.
Germany has a liberal foreign investment policy. From 1997 to 2000, annual average flows of U.S. direct investment in Germany were $3.4 billion, while those of German investors in the United States reached $22.2 billion. U.S. firms employ about 800,000 people in Germany; German firms likewise employ about 800,000 people in the United States.
Despite persistence of structural rigidities in the labor market and extensive government regulation, the economy remains strong and internationally competitive. Although production costs are very high, Germany is still an export powerhouse. Additionally, Germany is strategically placed to take advantage of the rapidly growing central European countries. The current government has addressed some of the country's structural problems, with important tax, social security, and financial sector reforms.
FOREIGN RELATIONS During the postwar era, the FRG also sought to improve its relationship with the countries of eastern Europe, first establishing trade agreements and, subsequently, diplomatic relations. With unification, German relations with the new democracies in central and eastern Europe intensified. On November 14, 1990, Germany and Poland signed a treaty confirming the Oder-Neisse border. They also concluded a cooperation treaty on June 17, 1991. Germany concluded four treaties with the Soviet Union covering the overall bilateral relationship, economic relations, the withdrawal of Soviet troops from the territory of the former GDR, and German support for those troops. Russia accepted obligations under these treaties as successor to the Soviet Union. Germany continues to be active economically in the states of central and eastern Europe and to actively support the development of democratic institutions.
Berlin During the years of Berlin's isolation--176 kilometers (110 mi.) inside the former GDR--the Western Allies encouraged a close relationship between the Government of West Berlin and that of the FRG. Representatives of the city participated as nonvoting members in the FRG parliament; appropriate West German agencies, such as the supreme administrative court, had their permanent seats in the city; and the governing mayor of Berlin took his turn as President of the Bundesrat. In addition, the Allies carefully consulted with the FRG and Berlin Governments on foreign policy questions involving unification and the status of Berlin.
Between 1948 and 1990, major events such as fairs and festivals took place in West Berlin, and the FRG encouraged investment in commerce by special concessionary tax legislation. The results of such efforts, combined with effective city administration and the Berliners' energy and spirit, were encouraging. Berlin's morale remained high, and its industrial production considerably surpassed its prewar level.
The Final Settlement Treaty ended Berlin's special status as a separate area under Four Power control. Under the terms of the treaty between the FRG and the GDR, Berlin became the capital of a unified Germany. The Bundestag voted in June 1991 to make Berlin the seat of government. The Government of Germany asked the allies to maintain a military presence in Berlin until the complete withdrawal of the Western Group of Forces (ex-Soviet) from the territory of the former GDR. The Russian withdrawal was completed August 31, 1994. On September 8, 1994, ceremonies marked the final departure of Western Allied troops from Berlin.
In 1999, the formal seat of the federal government moved from Bonn to Berlin. Berlin also is one of the Federal Republic's 16 Laender.
U.S.-GERMAN RELATIONS German-American ties extend back to the colonial era. More than 7 million Germans have immigrated over the last three centuries, and today nearly 25% of U.S. citizens claim German ancestry. In recognition of this heritage and the importance of modern-day U.S.-German ties, the U.S. President annually has proclaimed October 6, the date the first German immigrants arrived in 1623, to be "German-American Day."
U.S. policy toward Germany remains the preservation and consolidation of a close and vital relationship with Germany, not only as friends and trading partners, but also as allies sharing common institutions. During the 45 years in which Germany was divided, the U.S. role in Berlin and the large American military presence in West Germany served as symbols of the U.S. commitment to the preservation of peace and security in Europe. Since German unification, the U.S. commitment to these goals has not changed. The U.S. made significant reductions in its troop levels in Germany after the Cold War ended, and, on July 12, 1994, President Clinton "cased the colors" at the Berlin Brigade's deactivation ceremony. The U.S., however, continues to recognize that the security and prosperity of the United States and Germany significantly depend on each other. More than 91,000 U.S. military personnel remain in Germany to protect these common interests.
As allies in NATO, the United States and Germany work side by side to maintain peace and freedom. This unity and resolve made possible the successful conclusion of the 1987 U.S.-USSR Intermediate-Range Nuclear Forces Treaty (INF), the Two-plus-Four process--which led to the Final Settlement Treaty--and the November 1990 Conventional Armed Forces in Europe (CFE) Treaty. More recently, the two allies have cooperated closely in peacekeeping efforts in the Balkans and have worked together to encourage the evolution of open and democratic states throughout central and eastern Europe.
Following the September 11, 2001 attacks on the World Trade Center in New York City and the Pentagon in Washington, D.C., Germany has been a reliable U.S. ally in the campaign against terrorism. As two of the world's leading trading nations, the United States and Germany share a common, deep-seated commitment to an open and expanding world economy. Personal ties between the United States and Germany extend beyond immigration to include intensive foreign exchange programs, booming tourism in both directions, and the presence in Germany of large numbers of American military personnel and their dependents.
The United States and Germany have built a solid foundation of bilateral cooperation in a relationship that has changed significantly over five decades. The historic unification of Germany and the role the United States played in that process have served to strengthen ties between the two countries.
German-American political, economic, and security relationships continue to be based on close consultation and coordination at the most senior levels. High-level visits take place frequently, and the United States and Germany cooperate actively in international forums.
Principal U.S. Embassy Officials The U.S. embassy in Germany is located at Neustaedtische Kirchstrasse 4-5, 10117 Berlin, Tel: (030) 238-5174. Consulates general are in Frankfurt, Hamburg, Munich, Leipzig, and Dusseldorf. Mission Germany maintains an informative web site at: http://www.usembassy.de.
TRAVEL AND BUSINESS INFORMATION Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647-5225. For after-hours emergencies, Sundays and holidays, call 202-647-4000. Passport information can be obtained by calling the National Passport Information Center's automated system ($.35 per minute) or live operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648). It also is available on the internet. Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled Health Information for International Travel (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800. Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a country's embassy and/or consulates in the U.S. (for this country, see "Principal Government Officials" listing in this publication). U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register at the U.S. embassy upon arrival in a country (see "Principal U.S. Embassy Officials" listing in this publication). This may help family members contact you in case of an emergency. Further Electronic Information National Trade Data Bank (NTDB). Operated by the U.S. Department of Commerce, the NTDB contains a wealth of trade-related information. It is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more information. |