Germany – Economy & Infrastructure

Economy

Germany has a social market economy with a highly skilled labour force, a large capital stock, a low level of corruption, and a high level of innovation. It has the largest and most powerful national economy in Europe, the fourth largest by nominal GDP in the world, the fifth largest by PPP, and was the biggest net contributor to the EU budget in 2011. The service sector contributes approximately 71% of the total GDP, industry 28%, and agriculture 1%. The official average national unemployment rate in June 2013 was 6.6%. However, the official average national unemployment rate also includes people with a part-time job that are looking for a full-time job. The unofficial average national unemployment rate in 2011 was 5.7%. Germany is an advocate of closer European economic and political integration. Its commercial policies are increasingly determined by agreements among European Union (EU) members and by EU legislation. Germany introduced the common European currency, the euro, on 1 January 2002. Its monetary policy is set by the European Central Bank, which is headquartered in Frankfurt. Two decades after German reunification, standards of living and per capita incomes remain significantly higher in the states of the former West Germany than in the former East. The modernization and integration of the eastern German economy is a long-term process scheduled to last until the year 2019, with annual transfers from west to east amounting to roughly $80 billion. In January 2009 the German government approved a €50 billion economic stimulus plan to protect several sectors from a downturn and a subsequent rise in unemployment rates. Of the world’s 500 largest stock-market-listed companies measured by revenue in 2010, the Fortune Global 500, 37 are headquartered in Germany. 30 Germany-based companies are included in the DAX, the German stock market index. Well-known global brands are Mercedes-Benz, BMW, SAP, Siemens, Volkswagen, Adidas, Audi, Allianz, Porsche, Bayer, Bosch, and Nivea. Germany is recognized for its specialized small and medium enterprises. Around 1,000 of these companies are global market leaders in their segment and are labelled hidden champions.

 

Infrastructure


The ICE 3 on the Cologne–Frankfurt high-speed rail line

With its central position in Europe, Germany is a transport hub. This is reflected in its dense and modern transport networks. The motorway (Autobahn) network ranks as the third-largest worldwide in length and is known for its lack of a general speed limit. Germany has established a polycentric network of high-speed trains. The Intercity Express or ICE network of the Deutsche Bahn serves major German cities as well as destinations in neighboring countries with speeds up to 300 kph (186 mph). The largest German airports are Frankfurt Airport and Munich Airport, both hubs of Lufthansa, while Air Berlin has hubs at Berlin Tegel and Düsseldorf. Other major airports include Berlin Schönefeld, Hamburg, Cologne/Bonn and Leipzig/Halle. Both airports in Berlin will be consolidated at a site adjacent to Berlin Schönefeld, which will become Berlin Brandenburg Airport.


Frankfurt is the financial center of Germany and Continental Europe 

In 2008[update], Germany was the world’s sixth-largest consumer of energy, and 60% of its primary energy was imported. Government policy promotes energy conservation and renewable energy commercialization. Energy efficiency has been improving since the early 1970s; the government aims to meet the country’s electricity demands using 40% renewable sources by 2020 and 100% by 2050. In 2010, energy sources were: oil (33.7%); coal, including lignite (22.9%); natural gas (21.8%); nuclear (10.8%); hydro-electric and wind power (1.5%); and other renewable sources (7.9%). In 2000, the government and the nuclear power industry agreed to phase out all nuclear power plants by 2021. Germany is committed to the Kyoto protocol and several other treaties promoting biodiversity, low emission standards, recycling, and the use of renewable energy, and supports sustainable development at a global level. The German government has initiated wide-ranging emission reduction activities and the country’s overall emissions are falling. Nevertheless the country’s greenhouse gas emissions were the highest in the EU in 2010[update].