Region(s): Europe/Middle East
Field(s): Germany
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Bio: Alan and Valerie Demos began their missionary career as members of the Germany-based European Impact Team in 1973. They received their appointment to Greece in 1974 and pioneered a thriving UPC work there from 1975 to 1989. Obeying the Lord, they settled in Bonn in 1991. Since August 1997, they have intensified efforts to reach the 26 million Germans in their three target states in west and northwestern Germany. As a result of both personal and crusade evangelism, they have started new congregations in Bonn, Cologne, Paderborn, and Northeim, along with two regular preaching points. Demos continues to serve as German literature coordinator and has published many thousands of new tracts, Bible studies, and other books in the past term of service. He states, “The greatest need in Germany is for more laborers to help in the harvest and reach large, unevangelized cities such as Berlin, Hamburg, Munich, and Hannover.”
Germany
Federal Republic of Germany/Bundesrepublic Deutschland
Area Coordinator: Michael L. Tuttle
Superintendent/President: Charles Robinette
Population: 82,400,000
Area: 137,830 sq. mi.
Capital: Berlin
Languages: German
Religions: Catholic, Lutheran
From its sandy Baltic beaches in the north to its majestic Alps in the south, the Federal Republic of Germany is a land of eclectic enchantment. It is Europe’s land of merry fairy tales, medieval castles, and modern industry. It is the land of Black Forest cuckoo clocks, Dresden china, and Bavarian Alps. It is the land of inspiring cathedrals, speeding autobahns, and breathtaking natural beauty. With German unification on October 3, 1990, the Federal Republic of Germany became Europe’s second largest nation. It is approximately the size of Montana. The seeds of the United Pentecostal Church of Germany were planted in the 1960s through the ministries of Robert Roh and Bill Glaser. Numerous other missionaries have plowed the fallow ground. According to the 2006 Annual Field Report, the United Pentecostal Church of Germany has ten churches and preaching points, 11 licensed national ministers, and 400 constituents.
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Introduction:
As Europe's largest economy and second most populous nation (after Russia), Germany is a key member of the continent's economic, political, and defense organizations. European power struggles immersed Germany in two devastating World Wars in the first half of the 20th century and left the country occupied by the victorious Allied powers of the US, UK, France, and the Soviet Union in 1945. With the advent of the Cold War, two German states were formed in 1949: the western Federal Republic of Germany (FRG) and the eastern German Democratic Republic (GDR). The democratic FRG embedded itself in key Western economic and security organizations, the EC, which became the EU, and NATO, while the Communist GDR was on the front line of the Soviet-led Warsaw Pact. The decline of the USSR and the end of the Cold War allowed for German unification in 1990. Since then, Germany has expended considerable funds to bring Eastern productivity and wages up to Western standards. In January 1999, Germany and 10 other EU countries introduced a common European exchange currency, the euro. In January 2011, Germany assumed a nonpermanent seat on the UN Security Council for the 2011-12 term.
Economy:
The German economy - the fifth largest economy in the world in PPP terms and Europe's largest - is a leading exporter of machinery, vehicles, chemicals, and household equipment and benefits from a highly skilled labor force. Like its western European neighbors, Germany faces significant demographic challenges to sustained long-term growth. Low fertility rates and declining net immigration are increasing pressure on the country's social welfare system and necessitate structural reforms. The modernization and integration of the eastern German economy - where unemployment can exceed 20% in some municipalities - continues to be a costly long-term process, with annual transfers from west to east amounting in 2008 alone to roughly $12 billion. Reforms launched by the government of Chancellor Gerhard SCHROEDER (1998-2005), deemed necessary to address chronically high unemployment and low average growth, contributed to strong growth in 2006 and 2007 and falling unemployment, which in 2008 reached a new post-reunification low of 7.8%. These advances, as well as a government subsidized, reduced working hour scheme, help explain the relatively modest increase in unemployment during the 2008-09 recession - the deepest since World War II - and its decrease to 7.4%in 2010. GDP contracted 4.7% in 2009 but grew by 3.6% in 2010. In its annual projection for 2011, the Federal Government expects the upswing to continue, with GDP forecast to grow this year at a real rate of 2.3%. The recovery was attributable primarily to rebounding manufacturing orders and exports - increasingly outside the Euro Zone. Domestic demand, however, is becoming more significant driver of Germany's economic expansion. Stimulus and stabilization efforts initiated in 2008 and 2009 and tax cuts introduced in Chancellor Angela MERKEL's second term increased Germany's budget deficit to 3.5% in 2010. The Bundesbank expects the deficit to drop to about 2.5% in 2011, below the EU's 3% limit. A constitutional amendment approved in 2009 likewise limits the federal government to structural deficits of no more than 0.35% of GDP per annum as of 2016.
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GERMANY WAS UNITED on October 3, 1990. Unification brought together a people separated for more than four decades by the division of Europe into two hostile blocs in the aftermath of World War II. The line that divided the continent ran through a defeated and occupied Germany. By late 1949, two states had emerged in divided Germany: the Federal Republic of Germany (FRG, or West Germany), a member of the Western bloc under the leadership of the United States; and the German Democratic Republic (GDR, or East Germany), part of the Eastern bloc led by the Soviet Union. Although the two German states were composed of a people speaking one language and sharing the same traditions, they came to have the political systems of their respective blocs. West Germany developed into a democratic capitalist state like its Western neighbors; East Germany had imposed on it the Soviet Union’s communist dictatorship and command economy.
Although the leaders of each state were committed to the eventual unification of Germany and often invoked its necessity, with the passage of time the likely realization of unification receded into the distant future. Relations between the two states worsened during the 1950s as several million East Germans, unwilling to live in an increasingly Stalinized society, fled to the West. August 1961 saw the sealing of the common German border with the construction of the Berlin Wall. In the early 1970s, however, diplomatic relations between the two states were regularized by the Basic Treaty, signed in 1972. During the remainder of the decade and during the 1980s, relations improved, and contacts between the citizens of the two states increased greatly. In 1987 Erich Honecker became the first East German leader to make a state visit to West Germany.
As of the late 1980s, however, no well-informed observer foresaw German unification as being likely in the near future. In fact, its prospect seemed so remote that some politicians advocated abandoning unification as a long-term goal. Those who remained committed to Germany’s ultimate unification frankly admitted that decades would probably pass before it happened.
The events leading to unification in October 1990 were unexpected, and they occurred at a frantic pace. In the eleven months between the opening of the Berlin Wall in November 1989 and unification, the forty-year-old East German dictatorship collapsed, Western political and economic systems were introduced in the East, new treaties altered long-standing diplomatic relationships between Germany and neighboring states, and two radically different societies began to grow together.
The rapid collapse of the East German regime surprised everyone. East Germany appeared to be the most economically successful of all Eastern-bloc countries. Its citizens enjoyed a modest yet decent standard of living and cradle-to-grave security provided by a government-run welfare system. They traveled to other East European countries for their summer vacations, watched West German television, and hoped for better living conditions and more freedom in the future. Most East Germans acquiesced in the communist regime’s restrictions, having fashioned areas of personal freedom in their private lives. A small opposition movement operated within the shelter of the Protestant church, the country’s sole relatively independent social institution. When opposition figures became too troublesome, the regime dealt with them by depriving them of their livelihood, sending them to prison, or expelling them to West Germany.
The regime’s elderly, hard-line leadership opposed the reforms of Soviet leader Mikhail Gorbachev, who sought to make socialism more efficient by introducing capitalist incentives and reducing central control. Encouraged by this liberalization and the application of Gorbachev’s reforms in neighboring Poland and Hungary, the regime’s opponents became bolder during the summer and fall of 1989 and mounted mass demonstrations that doubled and doubled again in size from week to week.
Soviet officials advised the Honecker regime not to expect outside support. Without foreign military assistance for the first time, the GDR leadership decided against the use of force to quell the burgeoning demonstrations. Honecker was ousted in mid-October, and more realistic leaders sought to save the regime by making concessions. In November travel abroad became possible, and East Germans swarmed into West Germany, many intending to remain there. Reforms could no longer satisfy East Germans, however, who wanted the freedoms and living standard of West Germany.
West German chancellor Helmut Kohl (1982- ) seized the political initiative in late November with his Ten-Point Plan for unification. Yet, even he thought several years and an intervening stage, such as a confederational structure, would be necessary before unification of the two Germanys could occur. By early 1990, however, the need to stop the massive flow of East Germans westward made speedy unification imperative. In addition, revolutionary change in other Eastern-bloc counties made solutions that a short time earlier had appeared out of the question suddenly seem feasible. The Treaty on Monetary, Economic, and Social Union between the two German states was signed in May and went into effect in July. The two Germanys signed the Unification Treaty in August. The Treaty on the Final Settlement with Respect to Germany, the so-called Two-Plus-Four Treaty, was signed in September by the two Germanys and the four victors of World War II--Britain, France, the Soviet Union, and the United States. The treaty restored full sovereignty to Germany and ended the Cold War era.
When unification occurred on October 3, 1990, it was a happy, yet subdued occasion. The many problems of joining such diverse societies were already apparent. The vaunted East German economy was coming to be seen as a Potemkin’s village, with many of its most prestigious firms uncompetitive in a market economy. East German environmental problems were also proving much more serious than anyone had foreseen; remedies would cost astronomical sums. West Germans had discovered also that their long-lost eastern cousins differed from them in many ways and that relations between them were often rife with misunderstandings. A complete melding of the two societies would take years, perhaps even a generation or two. The legal unification arranged by the treaties of 1990 was only the beginning of a long process toward a truly united Germany.
In its long history, Germany has rarely been united. For most of the two millennia that central Europe has been inhabited by German-speaking peoples, the area called Germany was divided into hundreds of states, many quite small, including duchies, principalities, free cities, and ecclesiastical states. Not even the Romans united Germany under one government; they managed to occupy only its southern and western portions. At the beginning of the ninth century, Charlemagne established an empire, but within a generation its existence was more symbolic than real.
Medieval Germany was marked by division. As France and England began their centuries-long evolution into united nation-states, Germany was racked by a ceaseless series of wars among local rulers. The Habsburg Dynasty’s long monopoly of the crown of the Holy Roman Empire provided only the semblance of German unity. Within the empire, German princes warred against one another as before. The Protestant Reformation deprived Germany of even its religious unity, leaving its population Roman Catholic, Lutheran, and Calvinist. These religious divisions gave military strife an added ferocity in the Thirty Years’ War (1618-48), during which Germany was ravaged to a degree not seen again until World War II.
The Peace of Westphalia of 1648 left Germany divided into hundreds of states. During the next two centuries, the two largest of these states--Prussia and Austria--jockeyed for dominance. The smaller states sought to retain their independence by allying themselves with one, then the other, depending on local conditions. From the mid-1790s until Prussia, Austria, and Russia defeated Napoleon at the Battle of Leipzig in 1813 and drove him out of Germany, much of the country was occupied by French troops. Napoleon’s officials abolished numerous small states, and, as a result, in 1815, after the Congress of Vienna, Germany consisted of about forty states.
During the next half-century, pressures for German unification grew. Scholars, bureaucrats, students, journalists, and businessmen agitated for a united Germany that would bring with it uniform laws and a single currency and that would replace the benighted absolutism of petty German states with democracy. The revolutions of 1848 seemed at first likely to realize this dream of unity and freedom, but the monarch who was offered the crown of a united Germany, King Friedrich Wilhelm IV of Prussia, rejected it. The king, like the other rulers of Germany’s kingdoms, opposed German unity because he saw it as a threat to his power.
Despite the opposition of conservative forces, German unification came just over two decades later, in 1871, when Germany was unified and transformed into an empire under Emperor Wilhelm I, king of Prussia. Unification was not brought about by revolutionary or liberal forces, but by a conservative Prussian aristocrat, Otto von Bismarck. Sensing the power of nationalism, Bismarck sought to use it for his own aims, the preservation of a feudal social order and the triumph of his country, Prussia, in the long contest with Austria for preeminence in Germany. By a series of masterful diplomatic maneuvers and three brief and dazzlingly successful military campaigns, Bismarck achieved a united Germany without Austria. He brought together the so-called "small Germany," consisting of Prussia and the remaining German states, some of which had been subdued by Prussian armies before they became part of a Germany ruled by a Prussian emperor.
Although united Germany had a parliament, the Reichstag, elected through universal male suffrage, supreme power rested with the emperor and his ministers, who were not responsible to the Reichstag. Although the Reichstag could contest the government’s decisions, in the end the emperor could largely govern as he saw fit. Supporting the emperor were the nobility, large rural landowners, business and financial elites, the civil service, the Protestant clergy, and the military. The military, which had made unification possible, enjoyed tremendous prestige. Led by an aristocratic officer corps sworn to feudal values and opposed to parliamentary democracy and the rights of a free citizenry, the military embodied the spirit of the German Empire.
Opposition to this authoritarian regime with its feudal structures was found mainly in the Roman Catholic Center Party, the Socialist Party, and in a variety of liberal and regional political groups opposed to Prussia’s hegemony over Germany. In the long term, Bismarck and his successors were not able to subjugate this opposition. By 1912 the Socialists had come to have the largest number of representatives in the Reichstag. They and the Center Party made governing increasingly difficult for the empire’s conservative leadership.
Despite the presence of these opposition groups, however, a truly representative parliamentary democracy did not exist. As a result, Germans had little opportunity to learn the art of practical politics. With few exceptions, this had also been the case throughout German history. Although Germany’s states were usually well managed by an efficient and honest civil service, they were authoritarian. Government was seen as the business of the rulers; the ruled were to be obedient and silent.
Because they were inexperienced in democratic government, Germans in the nineteenth century were often viewed as political children, incapable of governing themselves. In addition, seeing the excesses of the French Revolution, many thoughtful Germans came to the conclusion that democracy was not suitable for Germany. The success of democratic political institutions in Britain and the United States did not convince these skeptics; they feared that the passions of the ignorant masses could too easily be inflamed. Even many German liberals found the idea that ordinary citizens ought to determine how public business should be conducted too radical a notion. Instead, they recommended that parliaments consisting of the educated and the prosperous should serve as advisory bodies to noble rulers.
Germany’s defeat in World War I in 1918 meant the end of the German Empire. The emperor was forced to abdicate, and a republic--the Weimar Republic--was established with a constitution that provided for a parliamentary democracy in which the government was ultimately responsible to the people. The new republic’s first president and prime minister were convinced democrats, and Germany seemed ready at last to join the community of democratic nations.
The Weimar Republic ultimately disappointed those who had hoped it would introduce democracy to Germany. By mid-1933 it had been destroyed by Adolf Hitler, its declared enemy since his first days in the public arena. Hitler was a political genius who sensed and exploited the worries and resentments of many Germans, knew when to act, and possessed a sure instinct for power. His greatest weapon in his quest for political power, however, was the disdain many Germans felt for the new republic.
Many Germans held the Weimar Republic responsible for Germany’s defeat. At the war’s end, no foreign troops stood on German soil, and military victory still seemed likely. Instead of victory, however, in the view of many, the republic’s Socialist politicians arranged a humiliating peace. Many Germans were also affronted by the spectacle of parliamentary politics. The republic’s numerous small parties made forming stable and coherent coalition governments very difficult. Frequent elections failed to yield effective governments. Government policies also often failed to solve pressing social and economic problems.
These shortcomings undermined the legitimacy of the Weimar Republic. The upper classes, the judiciary, the police, the civil service, educators, the military, and much of the middle class gave the republic only halfhearted support at best. Many members of these groups despised the republic and wanted it replaced with an authoritarian system of government. The early years of the Weimar Republic saw frequent attempts to destroy it by force, mostly from the right, but also from the left.
A modest economic recovery from 1924 to 1929 gave the Weimar Republic a brief respite. The severe social stress engendered by the Great Depression, however, swelled the vote received by extreme antidemocratic parties in the election of 1930 and the two elections of 1932. The government ruled by emergency decree. In January 1933, leading conservative politicians formed a new government with Hitler as chancellor. They intended to harness him and his party, now the country’s largest, to realize their own aim of replacing the republic with an authoritarian government. Within a few months, however, Hitler had outmaneuvered them and established a totalitarian regime. Only in 1945 did a military alliance of dozens of nations succeed in deposing him, and only after his regime and the nation it ruled had committed crimes of unparalleled enormity.
In the aftermath of World War II, Germany came to consist of two states. One, East Germany, never attained real legitimacy in the eyes of its citizens and had to use force to prevent them from fleeing to the West. The other, West Germany, was resoundingly successful. Within two decades of defeat, it had become one of the world’s richest nations, with a prosperity that extended to all segments of the population. The economy performed so successfully that eventually several million foreigners came to West Germany to work as well. West German and foreign workers alike were protected from need arising from sickness, accidents, and old age by an extensive, mostly nongovernment welfare system.
Along with this material success, a vigorous democracy developed. To avoid the Weimar Republic’s weak coalition governments, the West German constitution, the Basic Law, permitted only those parties with at least 5 percent of the vote to sit in the Bundestag, the lower house of its parliament. This provision meant that stable parliamentary governments could be formed fairly easily, and efficient government became possible. In contrast to the Weimar Republic, the Basic Law banned political parties opposed to democracy.
From the first national election in 1949, West German politics has been dominated by two large catchall parties (Volksparteien ; sing., Volkspartei ), whose support came from voters formerly allied to many smaller parties. The moderate Christian Democratic Union (Christlich Demokratische Union--CDU), allied with its small sister party active in Bavaria, the Christian Social Union (Christlich-Soziale Union--CSU), won the votes of a broad range of Roman Catholic and Protestant voters. For the first time in German history, members of the two religions worked together to attain their political goals. The CDU/CSU also had left and right wings, which had to cooperate if the alliance were to win elections and exercise power. After much debate, the CDU/CSU’s various wings formulated the concept of a social market economy--free-market capitalism combined with an extensive social net. The CDU/CSU alliance has successfully held together its diverse membership and, with the exception of the 1969-82 period, has headed all the Federal Republic’s governments since 1949, when CDU leader Konrad Adenauer became the country’s first chancellor.
The Federal Republic’s other large popular party is the Social Democratic Party of Germany (Sozialdemokratische Partei Deutschlands--SPD), which receives much of the working-class vote. In the early years of the Federal Republic, the SPD was feared by many voters because of its socialist aims. With time, however, the party moderated its positions; for example, it accepted West German rearmament in the mid-1950s and came to support the social market economy. It also won the trust of suspicious voters by participating in many local and state (Land ; pl., Länder ) governments. After joining with the CDU/CSU to form a coalition government at the national level from 1966 to 1969, the SPD and the small, liberal Free Democratic Party (Freie Demokratische Partei--FDP) formed a coalition government with SDP leader Willy Brandt as chancellor. The SPD-FDP coalition lasted until 1982. In that year, the FDP and the CDU/CSU formed a new coalition government with Helmut Kohl as chancellor, a coalition still in power in mid-1996.
Many observers maintain that German democracy is in a transition stage. The SPD has lost its most steady source of support as an increasingly advanced economy has reduced the size of the blue-collar working class. An increasingly secular and sophisticated society has also cut into the CDU/CSU stable pool of confessional voters. Thus, since the 1980s, the large catchall parties have been confronted with an increasingly volatile electorate. Both parties have experienced declining memberships. As these parties have worked to woo a more diverse electorate, they have moderated their stances to such a degree that many voters have difficulty telling them apart.
Despite CDU losses in the October 1994 national elections, the CDU/CSU-FDP coalition survived, but with a majority of only ten seats. The SPD’s share of the vote rose in these elections, but not enough to take power at the national level. The SPD has been more successful in elections at the Land level in recent years and has often controlled the Bundesrat, parliament’s upper house. However, it lost its sole control of North Rhine-Westphalia in the elections of May 1995 and did even worse in October 1995 Land elections in Berlin. SPD leader Rudolf Sharping was deposed a month later and replaced by Oskar Lafontaine, who had led the party to defeat in the 1990 national elections. Lafontaine’s resurrection did not appear to solve the party’s long-standing leadership problem because it lost badly in the Land elections of March 1996 in Schleswig-Holstein, Rhineland-Palatinate, and Baden-Württemberg.
As the two large parties face diminishing pools of secure votes, growing numbers of young and educated voters have come to support the ecological party, Alliance 90/The Greens (Bündnis 90/Die Grünen), which, after having elected its first representatives to the Bundestag in 1983, in 1994 became the body’s third-largest party, displacing the FDP. As of mid-1996, the Greens had a skilled leader, Joschka Fischer, who has transformed the party from a group of apolitical idealists into a highly pragmatic, but still principled, political force that examines nearly every facet of German life from a fresh standpoint. Some observers hold that the party represents the future of German politics.
The party displaced by the Greens, the FDP, has been a partner in all coalition governments at the national level since 1969. Pledged to classic European liberal political values, the FDP has distinguished itself by its advocacy of the legal rights of the individual. In recent years, however, the party has struggled for its survival because of leadership problems and because its close embrace of the CDU/CSU has caused it to lose its political identity in the eyes of many voters. By late 1995, the party seemed on the verge of political extinction; it suffered a steep drop in its vote in the national election of October 1994 and a long string of losses in elections at the Land level. In March 1996, however, the FDP increased its vote and won seats in all three Land elections held during the month. Although the FDP was represented in only four Land parliaments as of mid-1996, these election results allow the party to retain its role as a coalition-maker in governments at the national level.
In addition to the Greens, another new party that has altered German politics is the Party of Democratic Socialism (Partei des Demokratischen Sozialismus--PDS). Able to win votes only in eastern Germany, the PDS has the support of voters who regret the extent to which or the way in which East Germany was swallowed up by the Federal Republic. Although the PDS is the successor to East Germany’s communist Socialist Unity Party of Germany (Sozialistische Einheitspartei Deutschlands--SED), it does not recommend that the East German regime be restored. Rather, it demands that eastern German interests be given greater respect by western Germans, who are often seen as arrogant and overbearing by eastern Germans. The PDS has thirty seats in the Bundestag and is represented in the parliaments of the eastern Länder , but is not a partner in any coalition. Because the PDS owes its success to the sometimes legitimate anger of easterners at how they have fared in a united Germany, observers believe that the influence of the PDS will wane as these Länder become more integrated into united Germany.
In addition to the above parties, several small right-wing parties are politically active. None have representatives in the Bundestag. The Republikaner, which at about 25,000 members is the largest of these parties, has representatives in the Baden-Württemberg parliament after winning 11 percent of the vote in 1992 and 9 percent of the vote in elections there in March 1996. The campaigns of these right-wing parties are based mainly on a fervid nationalism and a dislike of Germany’s foreign residents. They stop short of clearly espousing Hitlerian doctrines, however, because doing so would mean their being banned and their leaders possibly being imprisoned.
In addition to parties of the extreme right, authorities estimate that a few thousand violent right-wing extremists are active within Germany. Most are disaffected young males with few job prospects. Although comparatively few in number in a country of 80 million, they have received international attention when they have attacked or killed foreign workers living in Germany or vandalized Jewish cemeteries or synagogues. The world’s alarm at such occurrences is easily understandable, given Germany’s history in the first half of the twentieth century. Yet few observers believe that these extreme right-wing elements pose a threat to German democracy or have any chance of gaining political influence, let alone coming to power.
Germans of the late twentieth century differ greatly from those of its first half. The extreme nationalism of the interwar period finds little support in the Germany of the 1990s, for example. Unlike Germany’s failure to achieve victory in World War I, which to many Germans of the interwar period appeared to have been caused by the treachery of Socialist politicians rather than by military defeat, Germany’s unconditional surrender in 1945 was obviously unavoidable given the military situation at the war’s end. Moreover, because Hitler clearly started the war, Germany is judged, to some extent at least, to have deserved its terrible consequences. Thus, in contrast to Germans of the interwar period, few postwar Germans have demanded revenge for Germany’s sufferings or advocated the seizure of lost territory. This absence of an aggressive nationalism can be seen in the foreign policy of the Federal Republic. Unlike the diplomacy of the empire and the Hitler regime, this foreign policy has always had as its first principle multilateralism, a principle realized through Germany’s active membership in a great variety of international organizations.
Germans have also become convinced democrats. They understand and appreciate the workings of parliamentary democracy with its loyal opposition, concessions, and the peaceful passing of power from one government to another; they know the importance of an independent judiciary in protecting individual rights; and they value a free and powerful press. Under a democratic system of government, West Germans have experienced the most successful period of German history, and, whatever the system’s failings, they are unwilling to reject it for panaceas of earlier eras. Eastern Germans are now learning Western democratic values after decades of political repression. Having experienced a multitude of political and economic disasters under totalitarian regimes of the right and the left, Germans have matured and become political adults no longer susceptible to the utopian promises of demagogues.
Germany does face some serious challenges in the second half of the 1990s and in the new century. The most immediate challenge is to fully integrate eastern Germany and its inhabitants into the advanced social market economy and society of western Germany.
As of mid-1996, much had already been done to foster the formation of a strong eastern economy and to bring its components up to global standards. In the 1990-95 period, more than US$650 billion had been transferred from western Germany to eastern Germany. This enormous financial infusion has markedly improved eastern living standards, and specialists believe that by the late 1990s, the east’s infrastructure will be the most advanced in Europe. Unemployment in eastern Germany has consistently remained at about 15 percent, however, about one-third above the national level, despite eastern growth rates about three times higher than those in western Germany. Many of the older jobless are not likely to find employment comparable to what they had under the communist system. Yet, many eastern Germans have fared well in the new economy and have adapted well to its demands.
Achieving complete social unification is expected to take a generation or two. Decades of life in diverse societies have created two peoples with different attitudes. Easterners are generally less ambitious and concerned with their careers than their western counterparts. Their more relaxed work ethic sometimes raises the ire of western Germans. Many easterners also take offense at what has seemed to them arrogant or patronizing attitudes of westerners. The "implosion" of East Germany in 1990 prevented a slower, more nuanced introduction of Western institutions and habits of thought to the east that would have resulted in fewer bruised feelings. Polls of recent years have found a growing convergence of beliefs and opinions between the two peoples, however, a trend almost certain to continue.
The most serious problem confronting Germany in the long term is one faced by all advanced, high-wage industrial countries--how to meet the challenges posed by an increasingly globalized economy in which highly skilled workers of lesser developed countries are available at one-tenth the wages of wealthy countries. For Germany these countries are not located only in Asia, but next door in the former Eastern bloc. By the 1990s, German wages were among the world’s highest, some 50 percent higher than those of the United States, for example. Germany’s extensive social safety net is a principal reason for its high wage cost, yet no political party can expect to significantly cut into social programs and retain the favor of voters.
In addition to high wages, the German economy faces structural problems because the areas in which it has long been strongest--the chemical industry and machine production, for example--are not areas in which most future economic growth will occur. Having been so successful in their traditional fields of expertise, German businessmen are somewhat conservative, not given to risky entrepreneurship, and have not invested in new areas such as computers and biotechnology. Economists see little reason to believe that Germany can overtake the leaders in these fields, most notably the United States and Japan.
Germany also faces serious demographic problems. Population growth in recent decades has been slow; in many years, the number of Germans has actually declined because the birth rate has been so low. Given this long-standing trend, specialists wonder how Germans will continue to maintain their generous pension system, an unfunded system that operates on the pay-as-you-go principle, according to which retirees are supported by today’s workers. If present trends continue, by 2030 the ratio of retirees to workers will be one to one.
An obvious solution to this problem is to import workers. However, because Germans do not regard their country as a nation of immigrants, importing workers is not currently seen as a politically acceptable solution. As of the mid-1990s, Germany had about 7 million foreign residents, including 2 million Muslims, and more foreign workers are not wanted. Germany has not yet successfully integrated the foreigners already on its soil: archaic immigration laws make it difficult to became a German citizen, and xenophobic attitudes of many Germans often make foreign residents, even those born and raised in the country and speaking perfect German, feel unwanted. In time, demographic realities may cause Germans to view more favorably the permanent presence of a substantial non-German population and lead them to adopt more liberal notions of citizenship.
Unification and the ending of the Cold War have meant that Germany must adjust itself to a new international environment. The disastrous failures of German foreign policy in the first half of the twentieth century have caused Germans to approach this challenge warily. Until the demise of the Soviet Union, Germans could enjoy the certainties of the Cold War, both they and their neighbors secure in the knowledge that the superpowers would contain any possible German aggression.
Throughout the postwar era, West Germany was a model citizen of the community of nations, content to be the most devoted participant in the movement toward Europe’s economic and social unification. West German politicians shared the fears of their foreign neighbors of a resurgent, aggressive Germany and sought to ensure their country’s containment by embedding it in international organizations. In the mid-1950s, for example, West Germany rearmed, but as a member of the North Atlantic Treaty Organization (NATO--see Glossary).
Since the end of the Cold War, however, united Germany has occupied an exposed position in Central Europe, with settled, secure neighbors in the west and unpredictable and insecure neighbors to the east. Because of this exposure, German policy makers wish to extend the European Union (EU--see Glossary) and NATO eastward, at a minimum bringing Poland, the Czech Republic, and Hungary into both organizations. In the German view, these countries could serve as a buffer between Germany and uncertain developments in Russia and other members of the former Soviet Union. At the same time as this so-called widening of West European institutions is being undertaken, Germany is working for their deepening by pressing for increased European unity. As of mid-1996, Helmut Kohl remained the continent’s most important advocate of realizing a common European currency through the European Monetary Union (EMU--see Glossary) by the turn of the century. However unrealistic this timetable may prove to be, in the postwar era Germany has steadfastly worked to realize German writer Thomas Mann’s ideal of a Europeanized Germany and rejected his nightmare of a Germanized Europe.
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