Germany - Overview
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The German economic indicators are a source for envy. Its current account surplus should reach 7% of the GDP, the social security funds show a suprlus of around 30 billion euro and public finances are also running a slight surplus. The German economic model, which relies on trade (exports of industrial goods), provoked two large debats in 2013, which had to do with trade surplus and the minimum wage. Germany has to do with a pressure to stimulate domestic deman through an increase in investment. The turning away from nuclear energy, which should happen by 2022, will require enormous investment, which will add to the 20 billion euros already allocated for the development of renewable energies in 2013. The new government will probably gradually reduce subsidies. While around 7.3 million people are working precarious, low-paid jobs without welfare protection, a wage increase above the level of inflation is also planned. The main challenge for the German government is still managing the debt crisis of the eurozone.
Despite the recession, Germany has managed to keep its unemployment rate at around 5.2%. However, the challenge of integrating the former East Germany, where unemployment is very high, persists.
The contribution of the industrial sector to the GDP has dropped from 51% in 1970 to about 28% today. However, the German economy still has some specialized sectors such as mechanical engineering, electric and electronic equipment, automotive and chemical products. The automotive industry is one of the country's largest industrial sectors and Germany the world's 3rd largest exporter of cars. German decision to abandon civil nuclear energy by 2022 is also likely to remodel the German industrial landscape.
The tertiary sector contributes about 70% to the GDP. The German economic model relies mainly on a dense network of SMEs; there are more than 3 million of them employing 70% of the salaried workers.
Foreign trade overview
In 2013, Germany's trade surplus reached record levels (189.9b euro), with imports decreasing more quickly (-1.2%) than exports (-0.2%). A recovery of exports is expected in 2014 (+4%) and also, to a lesser extent, of imports.
The whole of the European Union is its primary trade partner: around 60% of German exports and 60% of its imports are done with the EU. China and the U.S. are the other two main partners
Among the country's strengths are its very high and powerful industrial network, a highly skilled workforce with a good command of English and a location in the heart of Europe. Its main weakness is a high tax rate (for both individuals and businesses).