Germany and the Euro

Economic issues in Germany 1945-2005

• Group 1, presentation 2:
• Laura Bond-Powell
• Joanne Eldridge
• Andria Ioannou
• Katie MacDonald
• Catherine Wood

West Germany- Economy (Post War)

• After the Nazi experience, an economy free of state domination and intervention was needed.

• The powerful aid for investment and the reconstruction of Europe by American funding known as the Marshall Plan.

• The stimulus to German industry provided by the diversion of other Western resources for Korean War production  

• In 1945, at the end of World War II, Germany's economy lay in ruin and both West and East Germany had to be rebuilt.
• The West German economy recovered at an amazing rate in the 1950's.

• Small and medium-sized companies provided the basis for West Germany's economic prosperity.

• Tax laws favoring business owners

• Heavy private investment

• The large influx of refugees to West Germany (among the more than 11 million refugees from East Germany and former German areas of Europe). This large population transfer was significant and beneficial to the labour force as among these refugees there were highly skilled labourers who were prepared to work hard for a low wage. Later, ‘guest workers’ came from Italy, Spain, and Turkey.

• This recovery is described as West Germany's ‘economic miracle’ and was due to:

• Introduction of a new stable currency, the deutsche mark