• GERMANIC MIGRATIONS AND
  • FRANKISH KINGDOM
  • JOHANNES REUCHLIN
  • THE WEIMAR CONSTITUTION
  • W
  • INFLATION, REPARATIONS, AND
  • THE STRESEMANN ERA, 19231929
  • STABILIZATION AND LOCARNO,
  • CULTURE AND SOCIETY
  • ROAD TO DICTATORSHIP,
  • T
  • CONSOLIDATION OF POWER
  • THE NAZI TOTAL STATE
  • ULRICH VON HUTTEN
  • PERSECUTION OF THE JEWS
  • RELIGION AND THE CHURCHES
  • FOREIGN POLICY
  • W
  • THE BATTLE OF BRITAIN
  • INVASION OF RUSSIA
  • HITLERS PLANS FOR EUROPE
  • TURNING OF THE TIDE,
  • THE HOME FRONT
  • THE RESISTANCE
  • PHILIP MELANCHTHON
  • D-DAY TO DEFEAT NAZI GERMANY
  • THE HOLOCAUST
  • A
  • ALLIED PLANS AND CONFERENCES
  • DENAZIFICATION
  • POLITICAL PARTIES AND TRADE
  • LOCAL STATE FORMATION
  • PARLIAMENTARY COUNCIL AND THE
  • ECONOMIC RECONSTRUCTION
  • T
  • ERASMUS OF ROTTERDAM
  • BUNDESTAG ELECTION AND
  • REGAINING SOVEREIGNTY AND INTEGRATION
  • RECONSTRUCTION AND THE ECONOMIC
  • TRANSITIONAL YEARS AND
  • THE GRAND COALITION AND YOUTH
  • THE SOCIAL-LIBERAL COALITION
  • OSTPOLITIK (FOREIGN POLICY
  • CULTURE AND SOCIETY
  • SOCIAL STRUCTURE
  • SCHMIDT ERA: SOCIAL UNREST,
  • PRINTING AND MEDICINE
  • THE KOHL ERA, 19821998
  • T
  • UPRISING OF JUNE 17, 1953
  • ECONOMIC SYSTEM
  • SOCIETY, EDUCATION, AND
  • RELATIONS WITH THE FEDERAL
  • R
  • CONSEQUENCES AND PROBLEMS OF
  • ECONOMIC UNIFICATION,
  • P
  • RENAISSANCE ART
  • UNIFICATION POLITICS AND ITS
  • FOREIGN POLICY
  • GOVERNMENT AND ELECTIONS,
  • HISTORICAL DICTIONARY A
  • A
  • Abwehr
  • Adenauer, Konrad
  • Afrika Korps
  • Agadir Incident
  • Agrarian League
  • NEED FOR CHURCH REFORM
  • Agricola, Rudolf
  • Air Force
  • Albert (Albrecht) of
  • Albert V
  • Algeciras, Conference of
  • Allied Control Council
  • Alsace-Lorraine
  • Altdorfer, Albrecht
  • Amiens, Battle of
  • Anabaptists
  • P
  • Anglo-German Naval Treaty
  • Anschluss
  • Anti-Comintern Pact
  • anti-Semitism/Jew hatred
  • anti-Semitism
  • Anti-Socialist Law
  • Ardennes, Battle of the
  • Arendt, Hannah
  • Armed Forces (Wehrmacht)
  • Armed Forces (Bundeswehr):
  • LUTHER AND MELANCHTHON
  • Army (Prussian to 1860)
  • Army (Second Empire,
  • Asylum Law
  • Atlantic, Battle of the
  • Auerstadt, Battle of
  • Augsburg, Diet of
  • Augsburg, Religious Peace of
  • Augsburg, War of the League
  • Augsburg Confession
  • Augspurg, Anita
  • LUTHER AND ZWINGLI
  • Auschwitz-Birkenau
  • Austerlitz, Battle of
  • Austria
  • Austrian Succession, War of
  • autarchy
  • autobahns
  • Axis, The
  • B
  • Baden-Württemberg
  • Ballin, Albert
  • CAROLINGIAN EMPIRE
  • KNIGHTS REVOLT AND GREAT
  • Barbie, Klaus
  • Barmen Declaration
  • Barth, Karl
  • Basic Treaty
  • Bauernschutz
  • Bauhaus
  • Baumer, Gertrud
  • Bavaria
  • Bavarian Peoples Party (BVP)
  • Bavarian Succession, War of
  • REFORMATION AND THE TOWNS
  • Bayer AG
  • Bayreuth
  • Bebel, August
  • Beck, Ludwig August Theodor
  • Beckmann, Max
  • Beer-Hall Putsch of 1923
  • Beethoven, Ludwig van
  • Benjamin, Walter
  • Benn, Gottfried
  • Bennigsen, Rudolf von
  • ANABAPTISM AND MÜNTZER
  • Benz, Carl Friedrich
  • Bergen-Belsen
  • Berghof
  • Berlin
  • Berlin, Battle for (Fall of)
  • Berlin, Congress of
  • Berlin-Baghdad Railway
  • Berlin Blockade
  • Berlin Conference
  • Berlin Wall
  • CALVINISM IN GERMANY
  • Bernstein, Eduard
  • Bethmann Hollweg, Theobald
  • Biedermeier
  • Biermann, Wolf
  • Bismarck, Otto Eduard Leopold
  • blank check
  • Bleichröder, Gerson von
  • Blenheim, Battle of
  • Blomberg, Werner von
  • Blücher, Gebhard
  • CHARLES V AND THE REFORMATION
  • Böll, Heinrich
  • Bonhoeffer, Dietrich
  • Bonn
  • Bormann, Martin
  • Born, Max
  • Borsig, August
  • Bosch, Robert
  • Bosnia-Herzegovina
  • Brahms, Johannes
  • Brandenburg
  • C
  • Brauchitsch, Walther von
  • Braun, Eva
  • Braun, Karl Ferdinand
  • Braun, Otto
  • Braun, Wernher von
  • Brecht, Bertolt
  • Bremen/Bremerhaven
  • Brentano, Elizabeth Bettina
  • Breslau
  • The Bridge
  • THE THIRTY YEARS WAR
  • Britain, Battle of
  • Brüning, Heinrich
  • Buchenwald
  • Bülow, Bernhard von
  • Bundesrat
  • Bundestag
  • Burschenschaft
  • C
  • Canisius, Peter
  • canton system
  • A
  • Carlsbad Decrees
  • Celtis, Conrad
  • Center Party
  • Chamberlain, Houston Stewart
  • Charles V
  • Charles VI
  • Charles VII
  • Charlottenburg, Palace of
  • Christian Democratic Union
  • Christian Social Union
  • LITERATURE
  • Civil Code, German (Revised
  • Clausewitz, Carl von
  • Concordat of 1933
  • Condor Legion
  • The Confederation of the Rhine was a
  • Confessing Church
  • Congress of Vienna
  • conservatism
  • constitutional traditions
  • Counter-Reformation
  • MUSIC
  • Cranach, Lucas, the Elder
  • cultured elites
  • D
  • Daimler, Gottlieb
  • Danish War
  • Danzig
  • Dawes Plan
  • D-Banks
  • D-Day
  • Degenerate Art
  • SAXON AND SALIAN DYNASTIES,
  • SCIENTIFIC REVOLUTION
  • denazification
  • Denck, Hans
  • Depression, The Great
  • Depressions
  • détente
  • Diesel, Rudolf
  • Dietrich, Josef Sepp
  • Diplomatic Revolution of 1756
  • Dix, Otto
  • Döblin, Alfred
  • GOTTFRIED WILHELM VON LEIBNIZ
  • Dönitz, Karl
  • Dresden
  • Droste-Hülshoff, Annette
  • Dual Alliance
  • Dürer, Albrecht
  • Düsseldorf
  • E
  • Edict of Toleration
  • Ehrlich, Paul
  • Eichendorff, Joseph von
  • PIETISM
  • Eichmann, Adolf
  • Eicke, Theodor
  • Einsatzgruppen
  • Einstein, Albert
  • Eisner, Kurt
  • El Alamein, Battles of
  • Elbe River
  • Ems Telegram
  • Enabling Act
  • Engels, Friedrich
  • ROCOCO
  • ENIGMA/ULTRA
  • Enlightenment
  • Erasmus, Desiderius
  • Erfurt Program
  • Erhard, Ludwig
  • Ernst, Max
  • Erzberger, Matthias
  • Eugene, prince of Savoy
  • European Coal and Steel
  • European Defense Community
  • A
  • European Economic Community
  • European Union
  • euthanasia
  • expressionism
  • Falkenhayn, Erich von
  • F
  • Fatherland Party
  • Federal Constitutional Court
  • Federal Republic of Germany
  • Federation of German Industry
  • TURKISH WARS
  • Federation of German Womens
  • feminism, 18151945
  • feminism, 19452005
  • Ferdinand II
  • Feuerbach, Ludwig Andreas
  • Fichte, Johann Gottlieb
  • Final Solution
  • Fischer, Josef Joschka
  • Fischer von Erlach, John
  • Fontane, Theodor
  • WARS OF AUSTRIAN SUCCESSION
  • Four Year Plan
  • Francis II
  • Frank, Anne
  • Frank, Hans
  • Frankfurt am Main
  • Frankfurt Parliament
  • Frederick I
  • Frederick II, The Great
  • Frederick III
  • Frederick III, The Wise
  • STATE REFORMS
  • Frederick William
  • Frederick William I
  • Frederick William II
  • Frederick William III
  • Frederick William IV
  • Free Corps
  • Free Democratic Party
  • Freemasonry/Illuminati
  • French Revolutionary Wars
  • Freytag, Gustav
  • FOREIGN POLICY AND KAUNITZ
  • Friedrich, Caspar David
  • Fritsch, Werner von
  • Fugger, Jacob the Rich
  • Führerprinzip
  • G
  • Galen, Clemens August von
  • Gellert, Christian
  • General Directory
  • Genscher, Hans-Dietrich
  • Gentz, Friedrich
  • JOSEPH II AND REFORM
  • German Christians
  • German Communist Party
  • German Confederation
  • German Conservative Party
  • German Democratic Party
  • German Democratic Republic
  • German Labor Front
  • German National Peoples
  • German Peoples Party
  • German Progressive Party
  • HOHENSTAUFEN DYNASTY,
  • VIENNA AND ARCHITECTURE
  • German Reich (Imperial) Party
  • German Womens Bureau
  • German Workers Party
  • Germany Treaty
  • R
  • FREDERICK III
  • FREDERICK WILLIAM I, THE
  • FREDERICK THE GREAT
  • SEVEN YEARS WAR
  • S
  • ECONOMY
  • POLITICAL DECENTRALIZATION
  • SOCIAL STRUCTURE
  • HABSBURG DYNASTY
  • CULTURE
  • THE ENLIGHTENMENT
  • LITERATURE AND DRAMA
  • PHILOSOPHY
  • SECRET SOCIETIES
  • T
  • R
  • THE ROMANTIC MOVEMENT
  • NATIONALISM AND LIBERALISM
  • EARLY INDUSTRIAL REVOLUTION
  • CITIES AND CRAFT GUILDS
  • REVOLUTIONS OF 1848
  • ARMY REFORM AND PARLIAMENTARY
  • O
  • THE DANISH WAR, 1864
  • AUSTRO-PRUSSIAN WAR, 1866
  • THE FRANCO-PRUSSIAN WAR,
  • COLLAPSE OF THE SECOND FRENCH
  • I
  • N
  • ART AND ARCHITECTURE
  • ORIGINS OF CAPITALISM
  • SOCIAL STRUCTURE AND WOMEN
  • EDUCATION
  • T
  • POLITICAL PARTIES
  • THE KULTURKAMPF, SOCIALISM,
  • FOREIGN POLICY AND ALLIANCE
  • BISMARCKS DISMISSAL
  • WILHELMINE GERMANY
  • T
  • THE QUESTION OF
  • LATE MEDIEVAL CULTURE
  • CONDUCT OF THE WAR
  • PEACE RESOLUTION, REFORM, AND
  • AN UNPLANNED REVOLUTION
  • N
  • POLITICAL PARTIES UNPREPARED
  • A REVOLUTIONARY PATTERN
  • WORKERS AND SOLDIERS
  • KURT EISNER AND REVOLUTION IN
  • A REPUBLIC PROCLAIMED
  • A SEVERE ARMISTICE
  • T
  • ESTABLISHMENT OF A REVOLUTIONARY
  • EBERT MAKES A DEAL WITH THE
  • THE SPARTACISTS
  • INTERPRETATION OF THE
  • A VENGEFUL PEACE
  • V
  • THE GOALS OF THE PEACEMAKERS
  • TERMS OF THE TREATY
  • WAR GUILT AND REPARATIONS
  • DENUNCIATION AND RELUCTANT
  • GERMANIC MIGRATIONS AND
  • P

    style='font-size:31.5pt;font-family:ATClassicRoman;color:black'>OST-REUNIFICATION TO THE PRESENT

    negotiated higher than usual labor contracts since 1989. The euphoric predictions

    of a prosperous future resulting from reunification led to an astronomical 58 percent

    wage increase, which was also due to the German system of industry-wide

    collective bargaining of contracts. Not to be forgotten were the exceedingly generous

    social benefits to which Germans had become accustomed, which even the

    newly elected chancellor, Gerhard Schroeder of the SPD, admitted in 1998 had to

    be reduced. Chancellor Kohl (CDU) also wanted to reduce the environmental

    restrictions that increased business costs and restricted new construction. Another

    constraint on the economy was the huge amounts of money the federal government

    was obligated to spend to modernize and integrate the former Communist

    states. Increasing government deficits and mushrooming national debt all contributed

    to a low growth rate and unemployment, which by 1997 had reached an

    average postwar high of 11.3 percent, partly due to the high rates of unemployment

    in the East, where so many plants were closed down.

    Short-term solutions to the economic problems were attempted. The Kohl

    government announced an austerity program that included reduced sick pay

    and fewer job guarantees. The government also began to divest the state of its

    investment in publicly owned enterprises, such as Lufthansa, the national airline,

    the railroads, which had been state owned since the 19th century, the

    postal service, and the telephone system. Shares were sold to private investors,

    but the government had to take over the debt of these corporations, which further

    pushed up the national debt. Although these measures removed the governments

    responsibilities, it did not solve the fundamental economic problems.

    Although Kohl had negotiated reunification, he undoubtedly had failed to

    modernize the German social-market economy during his administration. By

    the time he left office, Germanys ranking among industrial nations in economic

    competitiveness had fallen to 24th.

    The tax reforms that the Schroeder government finally initiated in 2001

    reduced one of the great obstacles to economic reform. Income and corporate

    taxes had been linked to the generous social services to which Germans had

    become accustomed. The Christian Democrats (CDU) and Liberal Democrats

    (FDP) favored a reduction in direct taxation in order to spur new investment,

    while the SPD wanted tax reform to be linked to policies that provided incentives,

    for example, on energy use and job creation. Tax reform, however, was

    slow to happen because compromise between the major political parties and

    federal versus state conflicts was so difficult, as had been proven with the failure

    of an earlier reform bill in 1997.

    In May 2001 the pension reform plan proposed by Chancellor Schroeder was

    approved by the upper house of the parliament (Bundesrat). The plan decreased

    the benefits paid directly by the government. Employees in private industry were

    encouraged to invest their retirement savings in government-supported private

    investments. This was later expanded to public employees. It was the beginning

    of a shift from large-scale social programs supported by high taxes. The old system

    was no longer affordable because the ratio of workers paying into the system

    to retirees being paid would not hold in the future.

    By 2003 the laws affecting everything from hiring and firing workers to

    environmental restrictions, to health care and pension laws were still too rigid

    192 Germany

    and frustrated efforts to revive economic growth and provide new jobs. Some

    changes in the laws affecting layoffs and pensions had taken place, but they

    only highlighted the urgent need for broader structural changes.

    The German economy was further challenged by the introduction of the euro

    currency on January 1, 2002, which replaced the German mark (DM) with the

    new European currency. Although the euro initially declined in value in reference

    to the dollar, by the beginning of 2004 it rose some 40 percent and pushed

    prices higher throughout Europe. Consumers and companies became more cautious,

    which inhibited growth and the creation of new jobs. Furthermore, Germans

    saved more than their American counterparts, which also hampered

    economic growth. In fact, the slow growth of the economy prompted Germany

    and France to abandon the continent-wide commitment to keep the governments

    deficit to no higher than 3 percent, allowing it to rise to 4 percent of GDP.

    German companies needed more flexibility in setting their own management

    policies, rather than being tied to region-wide or sector-wide agreements

    that governed hiring, firing, and wage policies. In the past the German economic

    model had emphasized cooperation instead of conflict as has been the

    case in the United States. The establishment of wages had traditionally been

    settled by forging agreements between employers, unions, and the government

    concerning wages, benefits, and working conditions. The issues usually were

    resolved in an evenhanded fashion by taking into account the concerns of all

    sides. So, it is not at all surprising that Germans have had a great deal of difficulty

    in making even minor reforms. Take for instance Chancellor Gerhard

    Schroeders success in 2003 in changing some labor rules, which was laudable

    as far as it went, but did not make the necessary fundamental reforms. Companies

    have decided to make the best of the situation as has the automaker

    Audi AG. It has experimented with a new pay structure that eliminates the

    fixed hourly rate and replacing it with pay scales based on worker productivity.

    Germans also were not happy with Schroeders attempt to trim the welfare

    state. Some 100,000 protested in Berlin against the cuts. Critics claimed

    that taxes fell unfairly on the elderly and the unemployed. As an alternative

    to the benefit cuts, some lawmakers demanded a rise in the inheritance tax,

    which would hit the wealthy the hardest.

    Mergers and acquisitions have been ways in which German companies have

    adjusted to the world market. A prime example of the mergers that swept

    across the world in the late 1990s was that between Deutsche Bank AG, Germanys

    largest bank, and Dresdner Bank AG, the third-largest along with

    Allianz AG, an insurance firm. The German banking industry was overcrowded

    and required consolidation to enable it to compete with worldwide conglomerates.

    The merger began the unraveling of Germanys elaborate system of

    cross-holding of the limited 10 percent market share of each bank. Not only did

    the merger bring the German banking system into line with that of other European

    nations, but also made the merged bank the second in size in the world.

    were   GERMANC   Germany   Party   their   Prussians   army   state   government   became   they   during   Austrian   CHURCHES   French   political   Frederick   Nazis   Social   Hitler   after   against   economic   some   republican