Economy of Germany

Even though Germany is the third most powerful country in the world economically, its unification brought a number of problems. After the initial production boom in the western federal states and a large decline in production in the eastern part of the country accompanied by high unemployment, the entire country was hit by a crisis from which Germany is currently recovering. The differences between the two parts of the country are still significant in the sphere of labor productivity and infrastructural facilities (housing, communication and connections, services).

Agriculture and industry

Agriculture is very intensive and the most mechanized in the world, but it employs only 3% of the economically active population and generates a negligible value of gross domestic product. A large volume of food must be imported, especially from France. Arable land occupies a third of the country’s surface, and another 15% is meadows and pastures.

Mainly cereals (wheat, barley and rye), potatoes, sugar beet (on Börde loess soils) and vegetables (mainly cabbage) are grown. Germany is first in the world in the production of hops (Danube) and produces more than 500 brands of beer. The Rhine and Moselle valleys provide world-famous wines. 3/4 of production is provided by animal production focused on pig breeding (mostly in Europe) and cattle, especially in the northern parts of the country. Sheep breeding is expanding. Fishing, mainly in more distant seas, is not enough to cover consumption.

Forestry is also very advanced and the forests are excellently maintained, but East Germany, which has extensive forests that are severely damaged, had to import part of the wood until 1990.

According to, the country’s mineral resources are one-sided and relatively limited. Germany ranks 1st in the world in brown coal mining (2/3 in the eastern part of the country), 2nd in the production of potassium salts. Mining of hard coal in the Ruhr, natural gas in the north of the country and rock salt in Thuringia and the vicinity of Hanover is still significant. Oil production is low. Mining of various non-ferrous metal ores from depleted deposits is generally negligible.

More than 2/3 of electricity is produced by burning fossil fuels, but the share of nuclear power plants is already close to 30%. German industry is the most powerful in Europe and is increasingly oriented towards the most progressive sectors. The most important is the production of automobiles(3rd place in the world) and other means of transport, which make up 20% of exports. The production of machine tools, products of precision mechanics and optics, electrical engineering and electronics (computing, reproduction and printing technology) is significant. The importance of metallurgy (Ruhr, Saarland) is declining. The chemical industry is globally significant, with a full range of products and large-scale production of medicines. In third place in terms of value is the food industry (brewing, milling and sugar industries), followed by wood processing and the production of paper, building materials, clothing, glass and ceramics. The Ruhr conurbation together with the Cologne region represent the largest industrial base in Europe. Industry in the eastern Länder was hardly competitive when comparable wages were introduced, but is now developing considerably faster than in the west.

Although Germany derives significant income from tourism, German tourists’ spending abroad is three times higher. The eastern part of the country offers untapped possibilities with numerous spas and historical monuments.

Transport and connections

The old federal states have an excellent and very dense network of railways and roads and the longest motorway network in Europe. However, the highways in the east have hardly changed since the pre-WWII era when they were built. The state of the railways is similar. The road transport route connecting the Dutch ports with the Ruhr and the middle and upper Rhine region represents the busiest communication axis in Europe. A high-speed rail system is being built.

Water transport is important and the Rhine is the busiest waterway in Europe. It is connected by canals to the North Sea, the Elbe, the Oder, and now via the Main and the Danube. Duisburg is the largest river port in Europe. The most important seaport is Hamburg, followed by Bremen, Wilhelmshaven, Lůbeck and Rostock. Kiel near the Baltic has a connection with the North Sea through the North Sea Canal.

Frankfurt am Main is one of the largest aviation hubs not only in Europe, but also in the world. Other major international airports are Cologne-Bonn, Munich and Berlin. A total of 40 cities have regular air connections. The Lufthansa airline is one of the largest carriers in the world.

Telecommunications especially in the East need extensive financial investments. The West German press is in private hands and operates without government interference. Radio and television are state-owned, but mostly independent.

Social care and education

The level of healthcare and medical care in Germany is very good.

The welfare system is excellent in both parts of the country and provides extensive benefits. In the eastern part, where the system was closely tied to employment and provided such benefits as free pre-school care, women are unhappy about their loss, which has also contributed to a radical drop in the birth rate. High unemployment in the east is a big burden on the state budget.

School attendance is free and compulsory even at the second level, and the level of education is generally high. German universities have an excellent standard and tradition, the most famous being in Heidelberg (founded 1386) and Tübingen (1477). Marburg has the oldest Protestant university, founded in 1527.

Economy of Germany

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