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Germany Economy



Germany is the largest national economy in Europe, the third largest by nominal GDP in the world, and ranked fifth by GDP (PPP). Growth in 2006 was 2.8% and is predicted to retain this level in the following years. Since the age of industrialisation the country has been an innovator and beneficiary of an ever more globalized economy. The export of goods "Made in Germany" is one of the main factors of the country's wealth. Germany is the world's top exporter with $1.133 trillion exported in 2006 (Eurozone countries are included) and generates a trade surplus of €165 billion. The service sector contributes around 70% to the total GDP, the industry 29.1% and agriculture 0.9%. Most of the country's products are in engineering, especially in automobiles, machinery, metals and chemical goods. Germany is the leading producer of wind turbines and solar power technology in the world. The largest, annual, international trade fairs and congresses are held in several German cities such as Hanover, Frankfurt and Berlin.

Among the world's largest stock market signed companies measured by revenue, the Fortune Global 500, 37 companies are headquartered in Germany. The ten biggest are Daimler, Volkswagen, Allianz (the most profitable company), Siemens, Deutsche Bank (2nd most profitable company), E.ON, Deutsche Post, Deutsche Telekom, Metro and BASF. Among the largest employers are also Deutsche Post, Robert Bosch and Edeka. Well known global brands are Mercedes Benz, SAP, BMW, adidas, Audi, Porsche and Nivea.

Germany is a strong advocate of closer European economic and political integration, and its commercial policies are increasingly determined by agreements among European Union (EU) members and EU single market legislation. Germany uses the common European currency, the euro, and its monetary policy is set by the European Central Bank in Frankfurt.

After the German reunification in 1990, the standard of living and annual income remains significantly higher in the western half of the country. The modernisation and integration of the eastern German economy continues to be a long-term process scheduled to the year 2019, with annual transfers from west to east amounting to roughly $80 billion.

The overall unemployment rate has constantly fallen since 2005 and reached a 14-year-Low in November 2007 with 8.1%. The percentage is ranging from 6.7% in former Western Germany to 13.4% in former Eastern Germany. The former government of Chancellor Gerhard Schroeder launched a comprehensive set of reforms of labour market and welfare-related institutions. The current government runs a restrictive fiscal policy and has cut regular jobs in the public sector aiming a balanced federal budget in 2008.

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