Germany is the largest economy in the European Union (EU) and the fourth largest in the world after the USA, China, and Japan. The German economy has its great innovativeness and strong focus on exports to thank for its competitiveness and global networking. In high-selling sectors, such as car-making, mechanical and plant engineering, the chemicals industry and medical technology, exports account for well over half of total sales. In 2016, only China and the USA exported more goods. Germany invests 92 billion euros annually in research and development (R&D). Many companies are well on the way to “Industry 4.0”, a project destined in particular to advance digitisation in production engineering and logistics.
The positive economic momentum has led to a favourable trend on the labour market. Germany is one of the countries with the highest employment rates in the EU and is the country with the lowest youth unemployment percentage. This underscores the value of dual vocational training, which has become an export commodity in its own right and is being adapted by many countries. Factors such as the availability of skilled labour, infrastructure, and legal certainty are further characteristics of Germany, which is very high on the list in many international rankings. Peter Altmaier (CDU) heads the Federal Ministry for Economic Affairs and Energy.
Since 1949 the idea of a social market economy has formed the basis of German economic policy. The social market economy guarantees free entrepreneurial activity while at the same time endeavouring to create social checks and balances. Formulated in the post-War years by Ludwig Erhard, who was later to become Federal Chancellor, the concept has kept Germany’s economic development on a successful track. Germany actively engages in shaping globalisation and champions a sustainable global economic system, which offers fair opportunities to everyone.
Germany is one of the 12 countries which introduced the euro in 2002. The financial market crisis (2008) and the subsequent debt crisis affected the whole of the Eurozone, Germany included. To combat adverse impacts, the Federal Government employed a twin-track strategy, which involved not taking on any new debt and adopting measures to bolster innovativeness. For the first time since 1969, the government has been able to present a balanced federal budget since 2014.
Accounting for more than 99 percent of all companies, small and medium-sized enterprises (SMEs) are the backbone of the economy. They supplement the corporations listed primarily on the DAX index at the Frankfurt Stock Exchange, the most important financial centre in Continental Europe. The European Central Bank, which as an EU institution among other things guards the euro’s price stability, is also headquartered in Frankfurt am Main.