Germany is a social market economy, in other words: The state guarantees the free play of entrepreneurial forces, while at the same time endeavoring to maintain the social balance. Also on account of this concept, made popular in the post-War era by the Minister of Economics at the time, Ludwig Erhard, even in economically difficult times Germany enjoys a high degree of social harmony, something reflected in the fact that labor disputes are so rare here. The social partnership of trade unions and employer associations is enshrined in the institutionalized settlement of conflicts as outlined in the collective labor law. The Basic Law guarantees employers and trade unions independence in negotiating wages, and they accordingly have the right themselves to select the working conditions.
Like all industrialized nations, since 2008 Germany has been affected by the global banking, economic and financial market crisis, which was triggered by speculation on the real estate market in the United States and hit Germany in the middle of a strong growth phase. As an efficient response to the systemic crisis in the finance sector and to stabilize the situation on the financial markets, in the winter of 2008-2009 the Federal Government, like other countries (the United States, France, Great Britain), put together two rescue packages for the banks worth billions and for business introduced two extensive economy stimulus packages.
The state programs for repairing roads, schools, and other public buildings proved to be a success, as did the internationally highly regarded efforts to maintain employment levels despite severe capacity under-utilization (short-time working) and the environment incentive for older vehicles (until September 2009). The Growth Acceleration Act passed in late 2009 brought further tax cuts and stimuli for domestic demand.