The German Steel and iron industry has been doing well in the last decade with the support from rapid industrialization from the other countries. This industry has seen good growth in the precision engineering area. The Aerospace engineering has been showing growth in the last decade following subsidy that they receive from the government and joint ventures like Airbus and military contracts. (German Country Studies “Industry”). Relevant years: 1967; 1975 (Oil crisis) 1982 (Oil crisis); 1993 (unification)
It is not exactly clear when the 1967 economic slow down kicked off, but many economists believe it was in the 1965 -1966. There were varied signs and opinions that the economic slow down started in March 1966 while other stated that this started just after the 1965 acceleration. The early 1966 experienced the economic slow down in Germany according to the federal Minister for Economic Affairs. This economic slow down was turned around by the local industries in Germany that started recording economic growth from June to end of 1967.
(Other investigators findings. ) During the oil crises in 1975, the German motor industry realized negative impact. Many of their vehicles were not selling both domestically or internationally due to the contraction in the economy. The VW Company was faced with very stiff competition from other carmakers in the world. Worse still the oil crisis affected negatively on the export businesses. Domestically the VW emerged as the choice of the people due to its low fuel consumption levels. (Jurgen VW at the turning point).
During the 1982 oil crises, Germany was very active in the nuclear energy debates as an alternative source of energy. This was harnessed particularly in the West Germany. New policies were formulated to counter the energy deficits that were realized in Germany during that period. However, the oil crisis had some political ripples, as there was agitation for more policy focused leadership in the country. (Joppke, 251 -298) Following the 1993 unification in Germany, Germany was under intense levels of unemployment.
These revelations came from various labor market policy reports. The East Germany was worst off ahead of the unification. However, the unification of the East and the West Germany did very little to revive the economy immediately and create more employment. The economy, anyway, managed to cushion the existing inflation that was a burden to the society. Similarly noted was the fact that the West Germany jobs were paying better than the East German jobs. This led to migration towards that incentive.
Unlike the West Germany after the unification, the East was slow to develop service economies that would enable the citizens to carry out part time jobs to alleviate poverty and fight the harsh inflation. Later, the adoption of the IMF and World Bank aggravated the economic situation due to proper foresight in the adoption procedures. (Zimmermann, IZA Discussion Paper no. 185). • Collect the data for low cycle? • Which industry sectors suffered? The German Industries that have been suffering during the economic crises periods are the energy and natural resources.
This is because Germany depends heavily on oil to generate its energy requirements. The German economy has over 40% dependence on the fossil oil products. The trucks and automobiles consume these. More than one third of this energy requirement comes from the coal deposits in the country. The rest come from brown coal and lignite. However, during the harsh economic cycles, these resources were over stretched and overexploited. Even though the countries get more than 17% of its gas energy for domestic consumption, the rest, are from the nuclear plants.
(German Country Studies “Industry”). The mining of anthracite in Germany suffered in the period of economic depression despite the fact that Germany was a leader in the world production, ahead of Russia. Germany had more than twenty nuclear reactors but relied on uranium imports from Russia to operate these plants. The due to the economic depression and problems of importing uranium from 1970 – 1980, there were no new nuclear plans under construction from 1988. The rest of the nuclear plants shut down as the price of uranium went up due to inflation.
(German Country Studies “Industry”). The German energy sector suffered during the periods of economic cycles. This was so due to Germany’s total reliance of import oil to run the economy. Germany’s oil deposit in the North were not enough for exploitation in the during the 1988- 1999 period. On the other hand, the Eastern Germany heavily relies on gas imports from Russia. Overall, the economy did not rise above 7% during the difficult economic times. (German Country Studies “Industry”). • What influence has the Euro currency value? Now the Euro land is undergoing serious recession.
All the key countries in this economy rely on Germany to cool of the economy. The impact of the Germany economy weakening in the next few weeks will see the rest of Europe following suit, since Germany controls just over 25% of the Euro economy. However, since the Euro land economies are coupled, a slow German economy will see the negative effects passed to the rest of the nations suffer the ripples effectively in the successive weeks. (Rodriguez, Daily FX) This current experience is against the initial expert advice that the German economy will be strong when the EU unifies its economic growths.
Additionally, the EU unification process promised the reduction of unemployment and more stable financial positions on all its members. However, the single currency has had its own unprecedented effects. On average, German economy is tending towards deflation. There is very high unemployment and the inflation across the Euro economy is high. Germany has been loosing out on the foreign exchange due to the effect of the Euro economy across the counties. (Mach, “The Euro Leads Europe into Economic problems. ”)