Germany Economy and Demographics UA-4944458-2

Germany’s Economy

Germany is the world’s third largest economy and the label “Made in Germany” stands for innovation, quality and technological expertise.

The most important economic sectors in Germany are the automobile industry, electrical and mechanical engineering and the chemical industry.

The German automotive industry is the third largest in the world and its car producers Porsche, Opel (the German subsidiary of GM), VW, Audi BMW and Daimler / Mercedes Benz have a high reputation all over the world.

The chemical industry is a major contributor to the German economy, and BASF, the world’s largest chemical group, is based in Germany.

The largest economic sector is the service sector which includes the banking and insurance industries. Germany is also home to the European Central Bank, which is located in Frankfurt/Main and sets the European monetary policy.

Science and research are the driving forces of the German economy. The government allocates about 2.5% of the GDP for science and research, which makes Germany the leading country in terms of funds available for research in Europe.

Society and Demographics

With about 83 million people, Germany is the most populous country in Europe. About 15 million people with an immigrant background live in Germany today, this is about 18% of the population.

During the post – World War II economic boom, Germany recruited numerous “guest workers” from southern and south-eastern European countries. Many of them have stayed in Germany and contribute to its diverse ethnic and cultural composition.

A second group of immigrants is made up by ethnic German immigrants, who lived in the former states of the USSR and Poland for many generations. After the collapse of the Soviet Union they returned to Germany.

Turkish immigrants form the largest immigrant group (about 1.7 million) along with Italians (about 530,000).

There have been huge efforts to achieve integration of immigrants and to foster contact and understanding with the German population.

These measures include linguistic integration, education and creating job opportunities for immigrants.

There are three demographic challenges German society faces today: an increased life expectancy, a very low birth rate and an aging society. These phenomena are a threat to the social systems, as there is an increasingly smaller number of young people who will pay for the older retirees as part of the “generations contract”.

Germany in Europe and the World

The basic principles of German foreign politics are “never again” and “never alone”. “Never again” refers to the National Socialist past of the country. Germany has turned away from authoritarian and expansion politics. “Never alone” stands for the integration into the community of western democracies and European consolidation.

Germany is one of the founding members of the European Union. It has been striving to reach European integration, to guarantee peace, prosperity, and security in Europe, and to foster EU expansion in Eastern and Southern European countries.

German foreign policy is envolved in handling catastrophes, implementing democracy and human rights in regions of conflict, and in the war against terrorism.