About Germany
Political System
Since its reunification in1990, the Federal Republic of Germany consists of sixteen federal states (Länder), with a total population of 83 million. Certain competencies, such as foreign affairs and defence, customs, currency, air transport and telecommunications, are wholly under the purview of the federal government. In other fields, such as civil and criminal law, refugee matters, public welfare, nuclear regulation and labour law, the state governments share concurrent legislative powers with the federation.
The Federal President is Germany’s head of state, and has a five-year term in office. The Federal President represents Germany abroad, and appoints members of government, judges and high-ranking civil servants. Since July 2004 , this position has been held by Horst Köhler, formerly Managing Director of the International Monetary Fund.
The lower house of Parliament, or Bundestag, is elected every four years through universal suffrage. In addition to electing the head of government, or Chancellor, the Bundestag passes laws and acts as a check on the government. The upper house of Parliament, or Bundesrat, comprises representatives of the state governments and participates in the federal legislative and administrative process. Currently, more than 50 percent of all laws passed require the consent of the Bundesrat.
The federal government consists of the Chancellor and the ministers appointed upon his/her recommendation. It is rare for a party to have a clear majority in the Bundestag. For this reason, Germany has a tradition of coalition governments. Currently, the Christian Democratic Union/Christian Social Union (CDU/CSU) and the Social Democratic Party (SPD), - the two major forces in the German party system - are in a “grand coalition” government led by Chancellor Angela Merkel (CDU). The opposition is made up of the Free Democratic Party, the Greens and the Left Party.
Economy
Germany has the third-largest economy in the world, after the US and Japan and was the world’s number one exporter for the 3rd time in 2005. After growth of 1.6% in 2004, economic expansion slowed to 0.9% last year. Recent forecasts for 2006 by major institutes and banks stand at between 1.5% and 2.2%. There is currently a wide-spread optimism regarding the economy, resting on strong foreign demand and signs that both businesses and consumers have finally started to spend money again. For 2007 however, expectations are much more reserved due to expected negative effects of the 3% VAT increase.
Another major concern has been the budget deficit. Reaching 3.3% of the GDP in 2005, Germany exceeded the EU’s 3% limit under the Stability and Growth Pact (SGP) for the fourth year in a row. While government officials claim that Germany will violate the regulations of the SGP with a deficit of 3.1% for the 5th straight time, economic experts predict a deficit rate of just below 3% of GDP for this year. As a result of additional tax revenues generated by the VAT increase, next year’s budget will be in line with the European Stability and Growth Pact.
Unemployment has been at historically high levels for the past few years, with some areas of East Germany at 20% or more. Latest data (April) showed unemployment at 11.5%, or 4.8 million. To address this, the government is continuing the general course of social and labour market reforms in line “Agenda 2010" reform package launched in 2003 under the previous SPD-Green Government. Agreement was recently reached in Cabinet to gradually raise the official retirement age to 67. Moreover, Chancellor Merkel has also started to tackle more contentious issues, establishing processes to propose health and taxation reforms.
Foreign Policy
The prime objective of German foreign policy is to preserve peace and security in the world, through the promotion of democracy, human rights and cross-cultural dialogue. An integrated Europe and a strong transatlantic partnership form the cornerstones of this policy, flanked by a commitment to achieving a broad consensus and a balancing of interests on foreign policy issues. Germany is a member of the G8, and deeply embedded in multilateral institutions such as the United Nations (UN), the North Atlantic Treaty Organization (NATO), the Organization for Security and Cooperation in Europe (OSCE), the World Bank and the International Monetary Fund (IMF).
Germany has increasingly assumed greater responsibility on the international stage. It plays an active role in international conflict prevention and peacekeeping missions, contributing troops, police officers and qualified civilian personnel. Germany has troops and civilians deployed worldwide, notably in the Balkans and Afghanistan.
Germany is at the geographic and political heart of Europe, and is the EU member state with the largest economy and population. Accordingly, Germany has an overriding interest in promoting a Europe that is united and capable of acting. In the first half of 2007, Germany will hold the Presidency of the Council of the European Union. Priorities for Germany’s presidency will include reducing of bureaucracy, renewing efforts to adopt a EU constitution, and articulating the benefit of the EU to its citizens.
Useful Links about Germany
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see also: Canada & Germany, Come to Germany, Trade with Germany, News From Germany
Last updated: RRN/BRLIN May 2006
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