Germany is located in northern central Europe, bounded on the North Sea in the northwest and the Baltic Sea in the northeast. Germany’s borders include Denmark, Netherlands, Belgium, Luxembourg, France, Switzerland, Austria, Czech Republic, and Poland (CIA, 2014b). Germany has Europe’s largest economy and the fifth largest in the world. These rankings are based on purchasing power parity, a measure used by economists based on the U.S. values of the goods and services a particular nation produces. For a country such as Germany, where available goods and services are equivalent to those in the United States, the PPP works well. The purchasing power parity of a country is calculated by the World Bank (CIA, 2014a).
Germany currently has an economy that is neither completely capitalist, driven by free market forces alone, nor completely socialist, in which means of production are owned and managed by the state. Instead, Germany employs a social market economy, a moderate or third choice of economic style which features positive aspects of both systems. In Germany, capitalism is employed but not in a typical laissez-faire way. Instead, the market is partially organized by the government. The purpose of this management is to ensure social welfare (CIA, 2014a).
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Historically, Germany had unceasingly high unemployment and relatively low growth, but beginning with the Chancellorship of Schroeder, in 1998, changes were made in the minimum wage, the workweek, taxes, and spending. These changes lowered the unemployment rate, increased the growth rate, and balanced the country’s budget through the current Chancellor Merkel. The changes made since 1998 were representative of the government’s management of market forces, to the benefit of the people of Germany (CIA, 2014a). It cannot be insignificant that as several European countries have recently faced bankruptcy, Germany’s economy has remained strong.
One very important issue in maintaining Germany’s social market economy is the age balance. Like most developed nations, Germany has a low birth rate as well as decreasing immigration from other countries. The country’s current population pyramid is the widest in the 45-55 age range for both men and women. The youngest age group, 0-9, is only half as large as the middle age range. This type of population pyramid presents problems for any nation that utilizes social welfare programs, because these programs typically depend on the young to help care fore the old, or the healthy to help the sick, which is also related to age. Just as in the United States, Germany is headed for a time when there will not be enough young, healthy people to provide for the older, sicker population (CIA, 2014a).
However, recent trends may be reversing this pattern. Statistics for 2013 showed that more people immigrated to Germany than had immigrated in any year since 1993 (Destatis, 2015). Total immigration numbered 1,226,000, which was 13% higher than 2012. For emigration from Germany, 789,000 persons were counted. As a result, the net influx of people was 437,000, another figure which had not been seen since 1993 (Destatis, 2015).
The movement of people from a variety of cultures, including other Europeans, Africans, Asians, and Latin Americans, is having a profound effect on the culture and society of Germany (EMN, 2005). For example, the range of religious beliefs among residents of Germany has increased considerably in recent decades. Christians of denominations not previously represented, Jews, Buddhists, Hindus, and Muslims have all begun to move into Germany, typically settling down to their own religious communities. Because of unrest in the Arab world and elsewhere related to Islamic sects, Muslims have been the central figures of notice in the new religious landscape. On the other hand, many ethnic conflicts have been seen in the sport of soccer, and this phenomenon has been incorporated in sociological and psychological research. Eating habits and restaurants have been rejuvenated by the appearance of non-German foodstuffs and meals. For instance, the Turkish kebab is the most popular fast food in Germany. Immigrant music, media, and language have had substantial effects. Referring once more to Turkey, and new combination of Turkish and German has become its own culture, and has particularly impacted German entertainment and youth culture (EMN, 2005).
- Central Intelligence Agency (CIA). (2014a). The World Factbook. Retrieved from https://www.cia.gov/library/publications/resources/the-world-factbook/geos/gm.html
- Central Intelligence Agency (CIA). (2014b). The World Factbook Map. Retrieved from https://www.cia.gov/library/publications/resources/the-world-factbook/docs/refmaps.html
