Germany

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frankfort-financial_center
frankfort-financial_center

Flag_of_GermanyInformation Germany

Germany is open to the north on the North Sea and the Baltic Sea. It shares borders with Denmark in the north, with Poland and the Czech Republic in the east, with Austria and Switzerland in the south, with France, Belgium, Luxembourg and the Netherlands. To the west from 1949 Divided into two opposing political and economic States, the Federal Republic of Germany (FRG) to the west and the German Democratic Republic (GDR) in the East.
The country is reunified on 3 October 1990.

General

Official name: Federal Republic of Germany
Government type: parliamentary democracy
Head of State: Mr. Joachim Gauck
Head of government: Angela Merkel

carte-allemagneGeography

Area: 357,027 km²
Capital: Berlin
Main cities: Hamburg, Munich, Cologne, Frankfurt / Main, Stuttgart, Dusseldorf, Dortmund, Essen, Bremen, Dresden, Leipzig, Hanover, Nuremberg (66 German cities over 100 000 inhabitants).
Official language: German
Currency: Euro
National Day: October 3

Demography

Population: 81.1 million (2014)
Population growth: 0.4% (2014)
Fertility rate: 1.41 (2014)
Population Projections: 72.2 million inhabitants (2030)
Life expectancy at birth: 77 years and 9 months for men and 82ans and 10 months for women (2014)
Religions: Roman Catholic (32.9%), Protestantism (32.5%), Islam (3%), Judaism (0.14%)
Human Development Index (ranking UN, 2012): 5th place

Economy

GDP: € 2 903.2 billion (2014) GDP per capita: € 35,230 (2014)
growth rate (2014): + 1.5% (after + 0.4% in 2013); Forecast 2015: + 1.5%
Unemployment rate (2014): 4.7% (after 5.2% in 2013)
Inflation rate (average 12 months): 0.8% (after 1.6% in 2013)
Budget balance: + 0.0% (2013)
Public debt: 74.7%% of GDP (2014); Forecast 2015: 71.5%
Trade Balance: € 217.0 billion (2014). Main clients (2014): France (9.0%), USA (8.5%), UK (7.4%), China (6.6%), Netherlands (6.5% ), Austria (5.0%). Major suppliers (2014): Netherlands (9.6%), China (8.7%), France (7.4%), USA (5.3%), Italy (5.3%), UK (4.6%)

Share of main sectors in GDP (2014):

Agriculture 0.9%
Industry: 28.2%
Services: 72%

historic-center-Frankfurt
Historic-center-Frankfurt

Economic situation in Germany

In 2014, German GDP increased by 1.5%, exceeding the average of the last ten years (1.2%). Germany has been hit hard by the international economic and financial crisis of 2008-2009, recording a 5.1% decline in GDP in 2009. However, GDP growth then recovered strongly (3.5% in 2010, a record since reunification, and 3% in 2011), before marking a shift in 2012 (0.7%), confirmed in 2013 (0.3%).

The macroeconomic outlook is favorable. The government plans a growth of 1.6% in 2015 and 1.6% in 2016 and 1.3% the following three years. In the first quarter 2015, GDP growth was relatively low at 0.3%, marking the aftermath of the last quarter in 2014 very strong. The economic institutes globally share the optimism of the government, although they warn against the risks associated with medium-term Greek crisis, Russian and Ukrainian. According to the Federation of German Industry (BDI), growth should be 2% in Germany in 2015.

Aside from inventory changes, all components contributed positively to GDP growth in 2014. According to Destatis, exports, imports and trade surplus reached a record level, exceeding the year 2012. With the performance of exports of 1133 , € 6 billion (+ 3.7% compared to 2013) and imports of € 916.5 billion (+ 2% compared to 2013), the trade surplus amounted to € 217 billion. The increase in exports and imports was particularly strong with EU countries not belonging to the euro area (+ 10.2% and + 6.6%).

According to the preliminary estimate of the Bundesbank, the current account surplus also hit a record high in 2014; it stood at 215.3 billion €, or 7.4% of GDP. The BGA, the Federation of Foreign Trade, said that the weakness of the euro should further encourage exports this year and expects an increase in exports of 4% in 2015. It provides for imports up 3.5% due to the strength of domestic demand.

In 2014, total employment grew at a record level (+ 0.9% to 42.7 million, after + 0.6% in 2013). Unemployment according to the ILO significantly decreased (-3.5% to 2.1 million on average over the year), an unemployment rate of 4.7% (against 4.9% in 2013).

SPD lighthouse claim in 2013, establishing a single minimum wage (8.50 € gross per hour) began to be implemented from 1 January 2015. Its application is however not immediate in all sectors: a transitional period of two years was provided, in which lower wages will be allowed in the framework of agreements already negotiated branches.

On average, inflation stood at 0.9% in 2014. According to provisional figures from Destatis, the consumer price index (CPI) in February recorded an increase of + 0.1% year annual, after falling 0.4% in January.

Source: www.diplomatie.gouv.fr

Neuschwanstein-Castle-Bavaria-Germany
Neuschwanstein Castle Bavaria Germany

History

One can trace human presence in Germany up to 600 000 years ago. The most famous Germanic prehistoric man is Neanderthal, 40 000 years old.

The name of Germany derives from the Latin Germania, used to design all tribes living east of the Rhine River.

The word “Deutsch” comes from old Germanic language. The German tribes originated in South Scandinavia and Norther Germany.  They started to wander south and settled along the Rhine and Danube rivers.

Rome invaded Germany at the beginning of our era. However, peace never settled.  During the third century, large Germanic tribes emerged; Alemanni, Franks, Saxons.

In the fourth century, the Huns invaded Western Europe. This was really the final blow to a weakened, too stretched Roman Empire that finally collapsed.

The tribes, in particular the Franks, took advantage of this to push further south and west. They founded the Frankish kingdoms.

In year 800, the Frankish King Charlemagne was crowned Emperor . He took the title of “Imperator Romanorum” Emperor of the Romans.  The French see him as the first French (Frank) emperor. For the Germans, he can be considered as the founder of the Holy Roman Empire.

The Holy Roman Empire was a multi-ethnic confederation of states. The biggest one was the kingdom of Empire. However it also included today’s Austri, Hungary or Norther Italy.

The Emperor would be elected by the Prince-Electors. They would normally chose one of their owns.

This was a rather complex system, including “free cities” and “free states”. The powers of the Emperor were limited. Even though, the various Princes, Bishops or Cities owed allegiance to Him, they were free to administrate their estates at their wishes. They retained all their privileges, including waging war against each other.

In the early 16th century, a German monk: Martin Luther launches the Reform.  The North of Germany became protestant while the South remained catholic. This led to the “Thirty years War” (1618-1648). This was the effective end of the Holy Roman Empire. While it still officially existed, Germany broke into many free states, laying the foundation of the modern German federation.

In 1806, Napoleon dissolved the Empire.  Most of German states felt under French influence. By 1815, France, Prussia and Russia were controlling the whole of Germany.

After the fall of Napoleon, the Congress of Vienna created the German Confederation moosely including 39 states. Ideas, imported from the French Revolution were still floating. It led to a f(failed) revolution in 1848.

Prussia was already the major player in this confederation. Otto von Bismarck was appointed Minister President of Prussia. He won the war against Denmark  in 1864, then against Austria in 1864. This allowed him to create the North German Confederation.

After the defeat of France in the 1871 war, the German Empire was founded gathering all parts of Germany, except Austria. The King of Prussia became the Emperor and Berlin the capital.

Bismarck started foreign expansion of Germany through colonization and forging alliance, in particular with Austria and subsequently Italy.

Germany and its allies became the major power on the continent.  Worried by this emerging block, France, England and Russia concluded their own alliances.

Tension was raising, war was becoming unavoidable. On 28th June 1914, the Austrian crown prince is assassinated in Serbia. This has been the pretext for the start of one of the bloodiest war in history, World War I. 2 million Germans died.

In 1919, Germany was forced to sign the Treaty of Versailles. The victorious allies imposed heavy penalties to Germany.  This treaty was felt unjust by the people.

The same year, the Republic of Weimar was created.  Inflation rose to unbelievable heights. Germany was starving. Germans were humiliated. The nation was still occupied.

All this paved the way for the Nazis to win the 1933 elections. Using deficit spending, Hitler launched restructuration projects, in particular the famous Autobahn.

In 1935 Germany retreated from the Treaty of Versailles and passed the Nuremberg Laws that targeted the religious and ethnics minorities.

Germany started to expand, reacquiring the Saar region and taking control over Austria. Hitler signed a friendship pact with Stalin and they together invaded Poland.

 The United Kingdom and France then declared war on Germany. So started World War II…

After the war, Germany was parted in two:  The Federal Republic of Germany and the German Democratic republic.

Germany had been flattened by the Allies bombings. The USA launched the Marshall Plan to help and rebuild the country.  Working hard, West Germans became rapidly prosper people in a modernized country.

Following the fall of the “Berlin Wall”, Germany reunited on October 3rd 1990 and became the one and only Federal Republic Germany, including the former East German States.

Good to know

Currency

Germany uses the Euro (€)

The Euro (€) is the currency of the Economic and Monetary Union, inside the European Union.
19 countries of the European Union have chosen Euro as their currency, thus creating the Eurozone.
Four European micro-states, Monaco, Andorra, San Marino and Vatican City, are authorized to use Euro as well.
Two countries, non-members of Economic and Monetary Union, namely the Kosovo and the Montenegro, are also using it besides their national currencies.
The Euro has been circulated since January 1st 2002, replacing the national currencies of the member-countries.
The Euro is the second most used currency, behind the US Dollar, for the number of transactions.
The Euro is managed by the European Central Bank and the Eurosystem that comprises the 19 Central Banks of the member-countries.
Even if each member prints its own banknotes or mints its own coins, they are usable indiferently within the Eurozone.

Climate

Safety

Where to go?

How to settle there?

Business

To do business

 

Tax system

Personal income tax

Germany applies a progressive rate that varies whether you are married or not.

Single (€) Rate (%) Married (€) Rate (%)
Up to 7,664 0 Up to 15,329 0
From 7,665 to 52,153 15 From 15,330 to 104,304 15
From 52,154 to 250,000 42 From 104,305 to 500,000 42
Above 250,000 45 Above 500,000 45

(source: CFE http://www.cfe-eutax.org/)

Corporate income tax

Companies are taxed both by the federal government and by the state where they have their activity or where they are headquartered.
The federal rate is 14 %.
The taxes of the states (länder) vary.

In effect, the corporate income tax is betwwen 29 and 32 %/.

VAT

The general rate is 19 %

A reduced rate of  7 % applies on food, transports and cultural objects.

Custom duties

Others

Aeronautics

Airlines

Industry

Armed forces

Air Force

Type In service On order
Combat
Eurofighter 82 20
Tornado IDS 87
Specialized missions
Tornado ECR (EW) 28
Tanker
A310 4
Transport
A310 1
A400M 1 52
C160 67
Helicopters
CH53G 81
H145M 15
Training
Eurofighter 23 7
G120 ( Lufthansa) 7
Tornado 7

Army

Type En service En commande
Helicopters
BO105 39
NH90 (TTH) 38 34
SE313 1
Tiger 44 11
UH 1D 115
Training
H135 14

Navy

Type In service On order
Specialized missions
Dornier 228 (MPA/Recce) 2
P3C (MPA) 8
Helicopters
Lynx 88 6
NH90 (NFH) 18
SeaKing 21

(source:https://flightglobal.com/)

 

 

 

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