U.S. Department of State
Background Notes:  Germany, July 1995
Bureau of Public Affairs

July 1995
Official Name:  Federal Republic of Germany

PROFILE

Geography

Area:  357,000 sq. km. (137,821 sq. mi.); about the size of Montana.
Cities:  Capital--Berlin (population about 3.5 million).  Seat of 
government--Bonn (pop. 298,000).  The permanent seat of government 
for a unified Germany will be moved from Bonn to Berlin, probably 
between 1998 and the year 2000.  Other cities--Hamburg (1.7 million), 
Munich (1.3 million), Cologne (1 million), Frankfurt (664,000), 
Dusseldorf (578,000), Leipzig (497,000).  
Terrain:  Low plain in the north; high plains, hills, and basins in 
the center and east; mountainous alpine region in the south.
Climate: Temperate; cooler and rainier than much of the U.S.

People

Nationality:  Noun and adjective--German(s).
Population (1994 est.): 81 million.
Ethnic groups:  Primarily German; Danish minority in the north, 
Sorbian (Slavic) minority in the east, 7 million foreigners.
Religions:  Protestants slightly outnumber Roman Catholics.
Language:  German.
Education:  Years compulsory--10.  Attendance--100%.  Literacy--99%.
Health:  Infant mortality rate (1990, original 11 states)--6/1,000.  
Life expectancy  (1994, Germany-wide)--women 79 yrs., men 73 yrs.
Work force:  39 million (1993).  

Government

Type:  Federal republic.
Founded: 1949 (Basic Law, i.e., constitution, promulgated on May 23, 
1949).  On October 3, 1990, the Federal Republic of Germany and the 
German Democratic Republic unified in accordance with Article 23 of 
the F.R.G. Basic Law. 
Branches:  Executive--president (titular chief of state), chancellor 
(executive head of government).  Legislative--bicameral parliament.  
Judicial--independent, Federal Constitutional Court.
Administrative divisions:  16 Laender (states).
Major political parties:  Christian Democratic Union (CDU); Christian 
Social Union (CSU); Social Democratic Party (SPD); Free Democratic 
Party (FDP); Alliance 90/Greens; Party of Democratic Socialism (PDS).
Suffrage:  Universal at 18.

Economy

GDP (1994):  $2 trillion.
Annual growth rate (1994):  3%.
Per capita income:  $25,000.  
Inflation rate (1994):  3%.
Natural resources:  Iron, hard coal, lignite, potash, natural gas.
Agriculture:  Accounts for 1% of GDP.  Products--corn, wheat, 
potatoes, sugar beets, barley, hops, viniculture, forestry, 
fisheries.
Industry (35% of GDP):  Types--iron and steel, coal, chemicals, 
electrical products, ships, vehicles, construction.
Trade (1994):  Exports--$423 billion: chemicals, motor vehicles, iron 
and steel products, manufactured goods, electrical products.  Major 
markets--France, U.K., U.S.  Imports--$377 billion:  food, petroleum 
products, manufactured goods, electrical products, automobiles, 
apparel.  Major suppliers--France, Italy, Netherlands.

PEOPLE

The population of unified Germany is primarily German. There are 
almost 7 million foreign residents, including those granted asylum, 
guest workers, and their dependents.  Despite a recent tightening of 
asylum laws, Germany remains a prime destination for political and 
economic refugees from much of the Third World.  An ethnic Danish 
minority lives in the north, and a small Slavic minority known as the 
Sorbs lives in eastern Germany.  

Germany has one of the world's highest levels of education, 
technological development, and economic productivity.   Since the end 
of World War II, the number of youths entering universities has more 
than tripled, and the trade and technical schools in the original 11 
states of the Federal Republic of Germany (F.R.G.) are among the 
world's best.  With a per capita income level of more than $25,000, 
postwar Germany has become a broadly middle class society.  A 
generous social welfare system provides for universal medical care, 
unemployment compensation, and other social needs.  Modern Germans 
also are mobile; millions travel abroad each year.

With unification on October 3, 1990, Germany began the major task of 
bringing the standard of living of Germans in the former German 
Democratic Republic (G.D.R.) up to that of western Germany.  This 
will be a lengthy and difficult process due to the relative 
inefficiency of industrial enterprises in the former G.D.R., 
difficulties in resolving property ownership in eastern Germany, and 
the inadequate infrastructure and environmental damage that resulted 
from years of mismanagement under communist rule.

Drastic changes in the socio-economic landscape brought about by 
reunification have resulted in troubling social problems.  The 
economic uncertainty in eastern Germany is often cited as one factor 
contributing to rising extremist violence, primarily from the right.  
Confusion about the causes of the current hardships and a need to 
place blame have found expression in an alarming wave of harassment 
and violence by some Germans directed toward foreigners, particularly 
non-Europeans.  However, thousands of Germans have formed groups and 
marched to condemn violence or other anti-foreigner or extremist 
acts.

HISTORY

The rise of Prussian power in the 19th century, supported by growing 
German nationalism, eventually ended inter-state fighting and 
resulted in the formation of the German empire in 1871 under the 
chancellorship of Otto von Bismarck.  Although authoritarian in many 
respects, the empire eventually permitted the development of 
political parties, and Bismarck was credited with passing the most 
advanced social welfare legislation of the age.  Dynamic expansion of 
military power, however, contributed to tensions on the continent.  
The fragile European balance of power broke down in 1914, and World 
War I and its aftermath, including the Treaty of Versailles, led to 
the collapse of the German empire.

Fascism's Rise and Defeat

The postwar Weimar Republic (1919-33) was an attempt to establish a 
peaceful, liberal democratic regime in Germany.  This government was 
severely handicapped and eventually doomed by economic problems and 
the inherent weakness of the Weimar state.  The inflation of the 
early 1920s, the world depression of the 1930s, and the social unrest 
stemming from the draconian conditions of the Versailles Treaty 
worked to destroy the Weimar government from inside and out.

The National Socialist (Nazi) Party, led by Adolf Hitler, stressed 
nationalist themes and promised to put the unemployed back to work.  
The party blamed many of Germany's ills on alleged Jewish 
conspiracies.  Nazi support expanded rapidly in the early 1930s.  
Hitler was asked to form a government as Reich Chancellor in January 
1933.  After President Paul von Hindenburg died in 1934, Hitler 
assumed that office as well.  Once in power, Hitler and his party 
first undermined then abolished democratic institutions and 
opposition parties.The Nazi leadership attempted to remove or 
subjugate all non-German peoples in Germany by forced migration and, 
ultimately, genocide.  Hitler restored Germany's economic and 
military strength, but his ambitions led Germany into World War II.  
For Germany, World War II resulted in the destruction of its 
political and economic infrastructures, led to its division, and left 
a humiliating legacy.

After Germany's unconditional surrender on May 8, 1945, the United 
States, the United Kingdom, and the U.S.S.R. occupied the country and 
assumed responsibility for its administration.  The commanders-in-
chief exercised supreme authority in their respective zones and acted 
in concert on questions affecting the whole country.  France was 
later given a separate zone of occupation.

Although the United States, the United Kingdom, and the Soviet Union 
agreed at Potsdam in August 1945 to a broad program of 
decentralization, treating Germany as a single economic unit with 
some central administrative departments, these plans failed.  The 
turning point came in 1948, when the Soviets withdrew from the Four 
Power governing bodies and blockaded Berlin.  Until May 1949, West 
Berlin was kept supplied only by an Allied airlift. 

Political Developments In West Germany

The United States and the United Kingdom moved to establish a nucleus 
for a future German government by expanding the size and powers of 
the German Economic Council in their two zones.  The program provided 
for a West German constituent assembly, an occupation statute 
governing relations between the Allies and the German authorities, 
and the economic merger of the French with the British and American 
zones.

On May 23, 1949, the Basic Law, the constitution of the Federal 
Republic of Germany, was promulgated.  The first federal government 
was formed by Konrad Adenauer on September 20, 1949.  The next day, 
the occupation statute came into force, granting powers of self-
government with certain exceptions.

The F.R.G. quickly progressed toward fuller sovereignty and 
association with its European neighbors and the Atlantic community.  
The London and Paris agreements of 1954 restored full sovereignty 
(with some exceptions) to the F.R.G. in May 1955 and opened the way 
for German membership in the North Atlantic Treaty Organization 
(NATO) and  the Western European Union (WEU).

The three Western Allies retained occupation powers in Berlin and 
certain responsibilities for Germany as a whole.  Under the new 
arrangements, the Allies stationed troops within the F.R.G. for NATO 
defense, pursuant to stationing and status-of-forces agreements.  
With the exception of 45,000 French troops, Allied forces were under 
NATO's joint defense command.  (France withdrew from the collective 
military command structure of NATO in 1966.)

Political life in the F.R.G. was remarkably stable and orderly.  The 
Adenauer era (1949-63) was followed by a brief period under Ludwig 
Erhard (1963-66) who, in turn, was replaced by Kurt Georg Kiesinger 
(1966-69).  All governments between 1949 and 1966 were formed by the 
united caucus of the Christian Democratic Union (CDU) and Christian 
Social Union (CSU), either alone or in coalition with the smaller 
Free Democratic Party (FDP).  Kiesinger's 1966-69 "Grand Coalition" 
included the F.R.G.'s two largest parties, CDU/CSU and the Social 
Democratic Party (SPD).  In the 1969 election, the SPD--headed by 
Willy Brandt--gained enough votes to form a coalition government with 
the FDP.  Chancellor Brandt remained head of government until May 
1974, when he resigned after a senior member of his staff was 
convicted of spying for the East German intelligence service.

Finance Minister Helmut Schmidt (SPD) formed a government and 
received the unanimous support of coalition members.  He served as 
Chancellor from 1974 to 1982.  Hans-Dietrich Genscher, a leading FDP 
official, became Vice Chancellor and Foreign Minister.  Schmidt, a 
strong supporter of the European Community (EC) and the Atlantic 
alliance, emphasized his commitment to "the political unification of 
Europe in partnership with the U.S.A."

In October 1982, the SPD-FDP coalition fell apart when the FDP joined 
forces with the CDU/CSU to elect CDU Chairman Helmut Kohl as 
Chancellor.  Following national elections in March 1983, Kohl emerged 
in firm control of both the government and the CDU.  The CDU/CSU fell 
just short of an absolute majority, due to the entry into the 
Bundestag of the Greens, who received 6% of the vote.

In January 1987, the Kohl-Genscher government was returned to office, 
but the FDP and the Greens gained at the expense of the larger 
parties.  Kohl's CDU and its Bavarian sister party, the CSU, slipped 
from 49% of the vote in 1983 to 44%.  The SPD fell to 37%; long-time 
SPD Chairman Brandt subsequently resigned in April 1987 and was 
succeeded by Hans-Jochen Vogel.  The FDP's share rose from 7% to 9%, 
its best showing since 1980.  The Greens' share rose to 8% from their 
1983 share of 6%.

Political Developments In East Germany

In the Soviet zone, the Social Democratic Party was forced to merge 
with the Communist Party in 1946 to form a new party, the Socialist 
Unity Party (SED).  The October 1946 elections resulted in coalition 
governments in the five Land (state) parliaments with the SED as the 
undisputed leader.

A series of people's congresses were called in 1948 and early 1949 by 
the SED.  Under Soviet direction, a constitution was drafted on May 
30, 1949, and adopted on October 7, which was celebrated as the day 
when the German Democratic Republic was proclaimed.  The People's 
Chamber (Volkskammer)--the lower house of the G.D.R. parliament--and 
an upper house--the States Chamber (Laenderkammer)--were created.  
(The Laenderkammer was abolished in 1958.)  On October 11, 1949, the 
two houses elected Wilhelm Pieck as President, and a SED government 
was set up.  The Soviet Union and its East European allies 
immediately recognized the G.D.R., although it remained largely 
unrecognized by non-communist countries until 1972-73.

The G.D.R. established the structures of a single-party, centralized, 
communist state.  On July 23, 1952, the traditional Laender were 
abolished and, in their place, 14 Bezirke (districts) were 
established.  Effectively, all government control was in the hands of 
the SED, and almost all important government positions were held by 
SED members.

The National Front was an umbrella organization nominally consisting 
of the SED, four other political parties controlled and directed by 
the SED, and the four principal mass organizations (youth, trade 
unions, women, and culture). However, control was clearly and solely 
in the hands of the SED.  Balloting in G.D.R. elections was not 
secret.  As in other Soviet bloc countries, electoral participation 
was consistently high, with nearly unanimous candidate approval. 

Inter-German Relations

The constant stream of East Germans fleeing to West Germany placed 
great strains on F.R.G.-G.D.R. relations in the 1950s.  On August 13, 
1961, the G.D.R. began building a wall through the center of Berlin 
to divide the city and slow the flood of refugees to a trickle.  The 
Berlin Wall became the symbol of the East's political debility and 
the division of Europe.  

In 1969, Chancellor Brandt announced that the F.R.G. would remain 
firmly rooted in the Atlantic alliance but would intensify efforts to 
improve relations with Eastern Europe and the G.D.R.  The F.R.G. 
commenced this Ostpolitik by negotiating non-aggression treaties with 
the Soviet Union, Poland, Czechoslovakia, Bulgaria, and Hungary.  

The F.R.G.'s relations with the G.D.R. posed particularly difficult 
questions.  Though anxious to relieve serious hardships for divided 
families and to reduce friction, the F.R.G. under Brandt was intent 
on holding to its concept of "two German states in one German 
nation."  Relations improved, however, and in September 1973, the 
F.R.G. and the G.D.R. were admitted to the UN.  The two Germanys 
exchanged permanent representatives in 1974, and, in 1987, G.D.R. 
head of state Erich Honecker paid an official visit to the F.R.G. 

German Unification

During the summer of 1989, rapid changes took place in the G.D.R., 
which ultimately led to German unification.  Growing numbers of East 
Germans emigrated to the F.R.G. via Hungary after the Hungarians 
decided not to use force to stop them.  Thousands of East Germans 
also tried to reach the West by staging sit-ins at F.R.G. diplomatic 
facilities in other East European capitals.  The exodus generated 
demands within the G.D.R. for political change, and mass 
demonstrations in several cities--particularly in Leipzig--continued 
to grow.  On October 7, Soviet leader Mikhail Gorbachev visited 
Berlin to celebrate the 40th anniversary of the establishment of the 
G.D.R. and urged the East German leadership to pursue reform.

On October 18, Erich Honecker resigned as head of the SED and as head 
of state and was replaced by Egon Krenz.  But the exodus continued 
unabated and pressure for political reform mounted.  On November 4, a 
demonstration in East Berlin drew as many as 1 million East Germans.  
Finally, on November 9, the Berlin Wall was opened and East Germans 
were allowed to travel freely.  Thousands poured through the wall 
into the western sectors of Berlin, and on November 12, the G.D.R. 
began dismantling it.

On November 28, F.R.G. Chancellor Kohl outlined a 10-point plan for 
the peaceful unification of the two Germanys based on free elections 
in the G.D.R. and a unification of their two economies.  In December, 
the G.D.R. Volkskammer eliminated the SED monopoly on power, and the 
entire Politburo and Central Committee--including Krenz--resigned.  
The SED changed its name to the Party of Democratic Socialism (PDS) 
and the formation and growth of numerous political groups and parties 
marked the end of the communist system.  Prime Minister Hans Modrow 
headed a caretaker government which shared power with the new, 
democratically oriented parties.  On December 7, 1989, agreement was 
reached to hold free elections in May 1990 and rewrite the G.D.R. 
constitution.  On January 28, all the parties agreed to advance the 
elections to March 18, primarily because of an erosion of state 
authority and because the East German exodus was continuing apace; 
more than  117,000 left in January and February 1990.

In early February 1990, the Modrow government's proposal for a 
unified, neutral German state was rejected by Chancellor Kohl, who 
affirmed that a unified Germany must be a member of NATO.  Finally, 
on March 18, the first free elections were held in the G.D.R., and a 
government led by Lothar de Maiziere (CDU) was formed under a policy 
of expeditious unification with the F.R.G.  The freely elected 
representatives of the Volkskammer held their first session on April 
5, and the G.D.R. peacefully evolved from a communist to a 
democratically elected government.  Free and secret communal (local) 
elections were held in the G.D.R. on May 6, and the CDU again won.  
On July 1, the two Germanys entered into an economic and monetary 
union.

Four Power Control Ends

During 1990, in parallel with internal German developments, the Four 
Powers--the United States, U.K., France, and the Soviet Union--
negotiated to end Four Power reserved rights for Berlin and Germany 
as a whole.  These "Two-plus-Four" negotiations were mandated at the 
Ottawa Open Skies conference on February 13, 1990.  The six foreign 
ministers met four times in the ensuing months in Bonn (May 5), 
Berlin (June 22), Paris (July 17), and Moscow (September 12).  The 
Polish Foreign Minister participated in the part of the Paris meeting 
that dealt with the Polish-German borders. 

Of key importance was overcoming Soviet objections to a united 
Germany's membership in NATO.  This was accomplished in July when the 
alliance, led by President Bush, issued the London Declaration on a 
transformed NATO.  On July 16, President Gorbachev and Chancellor 
Kohl announced agreement in principle on a united Germany in NATO.  
This cleared the way for the signing in Moscow on September 12 of the 
Treaty on the Final Settlement With Respect to Germany.  In addition 
to terminating Four Power rights, the treaty mandated the withdrawal 
of all Soviet forces from Germany by the end of 1994, made clear that 
the current borders were final and definitive, and specified the 
right of a united Germany to belong to NATO.  It also provided for 
the continued presence of British, French, and American troops in 
Berlin during the interim period of the Soviet withdrawal.  In the 
treaty, the Germans renounced nuclear, biological, and chemical 
weapons and stated their intention to reduce German armed forces to 
370,000 within three to four years after the Conventional Armed 
Forces in Europe (CFE) Treaty, signed in Paris on November 19, 1990, 
entered into force. 

Conclusion of the final settlement cleared the way for unification of 
the F.R.G. and G.D.R.  Formal political union occurred on October 3, 
1990, with the accession (in accordance with Article 23 of the 
F.R.G.'s Basic Law) of the five Laender which had been reestablished 
in the G.D.R.  On December 2, 1990, all-German elections were held 
for the first time since 1933.  

GOVERNMENT

The government is parliamentary and based on a democratic 
constitution that emphasizes the protection of individual liberty and 
division of powers in a federal structure.  The chancellor (prime 
minister) heads the executive branch of the federal government.  The 
duties of the president (chief of state) are largely ceremonial; 
power is exercised by the chancellor.  Although elected by and 
responsible to the Bundestag (lower and principal chamber of the 
parliament), the chancellor cannot be removed from office during a 
four-year term unless the Bundestag has agreed on a successor. 

The Bundestag, also elected for a four-year term, consists of at 
least 656 deputies (more may be admitted when parties' directly 
elected seats exceed their proportional representation).  Elections 
for an all-German Bundestag were first held on December 2, 1990, and 
again on October 16, 1994.  The Bundesrat (upper chamber or Federal 
Council) consists of 68 members who are delegates of the 16 Laender.  
The legislature has powers of exclusive jurisdiction and concurrent 
jurisdiction with the Laender in areas specifically enumerated by the 
Basic Law.  The Bundestag bears the major responsibility.  The role 
of the Bundesrat is limited except in matters concerning Laender 
interests, where it can exercise substantial veto power. 

Germany has an independent federal judiciary consisting of a 
constitutional court, a high court of justice, and courts with 
jurisdiction in administrative, financial, labor, and social matters.  
The highest court is the Federal Constitutional Court, which ensures 
a uniform interpretation of constitutional provisions and protects 
the fundamental rights of the individual citizen as defined in the 
Basic Law. 

Principal Government Officials

President--Roman Herzog
President of the Bundestag--Rita Suessmuth (CDU)
Chancellor--Helmut Kohl (CDU)
Vice Chancellor--Klaus Kinkel (FDP)
Minister of Defense--Volker Ruehe (CDU)
Minister for Foreign Affairs--Klaus Kinkel (FDP)
Ambassador to the U.S.--Juergen Chrobog
Ambassador to the UN--Detlev Graf zu Rantzau

Germany maintains an embassy in the United States at 4645 Reservoir 
Road NW, Washington, DC 20007 
(tel. 202-298-4000).

Consulates general are located in Atlanta, Boston, Chicago, Detroit, 
Houston, Los Angeles, Miami, New York, San Francisco, and Seattle.  
Germany has honorary consuls in over 30 U.S. cities.

Political Parties

Christian Democratic Union/Christian Social Union (CDU/CSU).  An 
important aspect of postwar German politics has been the emergence of 
a moderate Christian party--the Christian Democratic Union--operating 
with a related Bavarian party, the Christian Social Union.  Although 
each party maintains its own structure, the two form a common caucus 
in the Bundestag and do not run opposing campaigns.  The CDU/CSU is 
loosely organized, containing Catholics, Protestants, rural 
interests, and members of all economic classes.  It is generally 
conservative on economic and social policy and more identified with 
the Roman Catholic and Protestant churches than are the other major 
parties, although its programs are pragmatic rather than ideological.  
Helmut Kohl has served as chairman of the CDU since 1973; Theo Waigel 
succeeded the late Franz Josef Strauss as chairman of the CSU in 
1988.  The parties together polled 41.5% of the national vote and won 
294 seats on October 16, 1994, reaffirming the Union as Germany's 
largest party. 

Social Democratic Party (SPD).  The SPD is the other major party in 
Germany and is one of the oldest organized political parties in the 
world.  Historically, it advocated Marxist principles, but in the 
Godesberg Program, adopted in 1959, the SPD abandoned the concept of 
a class party while continuing to stress social welfare programs.  
Although the SPD originally opposed West Germany's 1955 entry into 
NATO, it now strongly sup-ports German ties with the alliance. The 
SPD has a powerful base in the bigger cities and industrialized 
Laender.  Rudolf Scharping is the SPD chairman and leader of the 
party's Bundestag caucus, which grew to 252 seats on a 36% showing on 
October 16, 1994.  

Free Democratic Party (FDP).  The FDP has traditionally been composed 
mainly of middle- and upper-class Protestants, who consider 
themselves "independents" and heirs to the European liberal 
tradition.  Although the party is weak on the state level, it has 
participated in all but three postwar federal governments and has 
spent only seven years out of government in the 46-year history of 
the Federal Republic.  The party took 7% of the vote and returned 47 
deputies to the Bundestag in 1994.  Klaus Kinkel was elected chairman 
of the FDP in 1993.  Wolfgang Gerhardt was elected by the party as 
Kinkel's successor on June 1, 1995..  

Greens.  In the 1970s, environmentalists organized politically as the 
Greens.  Opposition to expanded use of nuclear power, to NATO 
strategy, and to certain aspects of highly industrialized society 
were principal campaign issues.  The Greens received 8% of the vote 
in the January 1987 West German national election.  However, in the 
December 1990 all-German elections, the Greens in western Germany 
were not able to clear the 5% hurdle required to win seats in the 
Bundestag.  It was only in the territory of the former G.D.R. that 
the Greens, in a  merger with Alliance 90 (a loose grouping of left-
wing political entities with diverse political views), were able to 
clear the 5% hurdle and win Bundestag seats.  In 1994, Greens from 
East and West returned to the Bundestag with 7% and 49 seats.

Party of Democratic Socialism (PDS).  Under chairman Lothar Bisky and 
Bundestag caucus leader Gregor Gysi, the PDS is the successor party 
to the SED (the communist party of the G.D.R.).  Established in 
December 1989, it renounced most of the extreme aspects of SED policy 
but has retained much of the ideology.  In the December 1990 all-
German elections, the PDS gained 10% of the vote in the former G.D.R. 
and 17 seats in the Bundestag.  In October 1994,  the PDS won four 
directly elected seats, to reenter parliament with a total caucus of 
30 seats despite falling below the 5% hurdle for proportional 
representation which applied again throughout all of Germany. 

Other Parties.  In addition to those parties that won representation 
in the Bundestag in October 1994, 16 other parties were on the ballot 
in one or more states.  The extreme right-wing Republikaner party saw 
its vote share sink to below 2% nationally, while the others drew 
even less support.  

Recent Election Issues

In the "super election year" of 1994-95, Germans voted in European 
Parliament, local, state, and federal parliamentary elections.  On 
May 23, 1994, the President of Germany's Constitutional Court, Roman 
Herzog, was elected President of the Republic in a special federal 
convention.  The most significant of these elections was the Federal 
Parliament (Bundestag) election on October 16.  The coalition of the 
CDU/CSU and the FDP was returned to government with a narrow majority 
of 341 seats to 331 for the opposition parties.  The new Bundestag, 
in turn, re-elected Helmut Kohl as Federal Chancellor for a four-
year, renewable term of office.  

Many of the most compelling public issues in Germany are domestically 
oriented, with the economy dominating the political debate.  External 
issues, however, continue to play an important role.  Germans are 
deeply concerned with the pace and scope of European integration.  
They also are concerned with the circumstances under which German 
military forces may participate in international peacekeeping or 
collective security operations.

ECONOMY

Germany ranks among the world's most important economic powers.  From 
the 1948 currency reform until the early 1970s, West Germany 
experienced almost continuous economic expansion, but real growth in 
gross national product slowed and even declined from the mid-1970s 
through the recession of the early 1980s.  The economy then 
experienced eight consecutive years of growth that ended with a 
downturn beginning in late 1992.

After national unification, eastern German industrial output 
collapsed to about 40% of its 1989 level, leading to high 
unemployment in the new states.  Reunification strained German public 
finance, hurt the labor market, and eventually exposed structural 
weaknesses in the economy.  Following a reunification-induced western 
German economic boom during 1990-92 fueled by explosive consumer 
demand and capital spending, growth stalled while transfer payments 
to the eastern states rose to $90 billion per year.  In an effort to 
contain the inflationary pressures of 
these transfers, the Central Bank (Bundesbank) maintained a high 
(short-term) interest rate policy which further dampened economic 
activity.  In 1994, the German economy turned the corner on recovery, 
and the 10% growth rate in the eastern states was the highest of any 
region in Europe.  The Deutsche Mark's appreciation through early 
1995, combined with a series of relatively high sectoral wage 
settlements, has caused annual GDP growth projections to be revised 
downward slightly, to 3%.

Germans often describe their economic system as a "social market 
economy."  The German Government provides an extensive array of 
social services.  Although the state intervenes in the economy 
through the provision of subsidies to selected sectors and the 
ownership of some segments of the economy, competition and free 
enterprise are promoted as a matter of government policy.  The 
government recently restructured the railroad system on a corporate 
basis and is in the process of privatizing the national airline and 
postal service. 

The German economy is heavily export oriented, with one-third of its 
national output going to the external sector.  As a result, exports 
traditionally have been a key element in German macroeconomic 
expansion.  Germany is a strong advocate of closer European economic 
integration, and its economic and commercial policies are 
increasingly determined by agreements among European Union (EU) 
members. 

Outside the EU, the United States and Japan are Germany's major 
trading partners.  Two-way U.S.-German merchandise trade is more than 
$50 billion.  The United States has run a series of trade deficits 
with Germany; U.S. merchandise exports stagnated in 1994 at $19 
billion, while German exports expanded to $32 billion.  Major U.S. 
export categories include aircraft, electrical equipment, 
telecommunications equipment, data processing equipment, and motor 
vehicles and parts.  German export sales are concentrated in motor 
vehicles, machinery, chemicals, and heavy electrical equipment.  In 
services, the United States consistently shows a surplus in trade 
with Germany. 

Germany follows a liberal policy toward foreign investment.  About 
65% of U.S. capital invested in Germany is in manufacturing.  In 
1993, total U.S. direct investment in Germany was $38 billion--up 
from the 1992 figure of 
$34 billion--making the U.S. the leading source of foreign investment 
in Germany.  Total German investment in the United States in 1993 was 
$35 billion, also up significantly from the 1992 level of $30 
billion.

Five years after the unification of the two German states, great 
strides have been made, and the complex task of introducing a market 
economy in the east is well-advanced.  Overall productivity in the 
former G.D.R., which was less than half that in the F.R.G., is now at 
68% and rising.  The challenge is to close the productivity gap 
altogether.  The poor condition of the basic infrastructure, 
widespread environmental damage, and lower-than-expected levels of 
private investment in the east have complicated the process of 
economic integration.  Private investment in eastern Germany has been 
slower than expected in large part because the issue of property 
ownership in the former G.D.R. has proven difficult to resolve.  Most 
observers nevertheless believe that, after an initial period of 
economic adjustment, eastern Germany will enter an era of rapid and 
self-sustaining economic growth.

Despite a growing clamor to address structural rigidities in the 
labor market and excessive government regulation, the economy remains 
fundamentally strong and internationally competitive.  Abundant human 
capital, low corporate debt burdens, and cooperative industrial 
relations characterize the German economy.  

FOREIGN RELATIONS

Unified Germany continues to emphasize close ties with the United 
States, membership in NATO, the "deepening" of integration among 
current members of the EU, and expansion of union membership to 
include Central and Southern European neighbors.  The F.R.G. took 
part in all of the joint postwar efforts aimed at closer political, 
economic, and defense cooperation among the countries of Western 
Europe.  Germany is also a strong supporter of the Organization for 
Security and Cooperation in Europe (OSCE), which seeks to reduce 
tensions and improve relations among the European nations, the U.S., 
and Canada.

During the postwar era, the F.R.G. also sought to improve its 
relationship with the countries of Eastern Europe, first establishing 
trade agreements and, subsequently, diplomatic relations.  With 
unification, German relations with the new democracies in Central and 
Eastern Europe have intensified.  On November 14, 1990, Germany and 
Poland signed a treaty confirming the Oder-Neisse border.  They also 
concluded a cooperation treaty on June 17, 1991.  Germany concluded 
four treaties with the Soviet Union covering the overall bilateral 
relationship, economic relations, the withdrawal of Soviet troops 
from the territory of the former G.D.R., and German support for those 
troops.  Russia accepted obligations under these treaties as 
successor to the Soviet Union.

Berlin

The Final Settlement Treaty ended Berlin's special status since 1945 
as a separate area under Four Power control.  Under the terms of the 
treaty between the F.R.G. and the G.D.R., Berlin became the capital 
of a unified Germany.  The Bundestag voted in June 1991 to make 
Berlin the seat of government.  The Chancellory, Bundestag, Foreign 
Office, and other government ministries will move to Berlin by the 
turn of the century.  Berlin is also one of the Federal Republic's 16 
Laender.  Its first united government since 1948 was elected in 
December 1990. 

The opening of the Berlin Wall on November 9, 1989, was a watershed 
in the developments which culminated in German unity on October 3, 
1990.  The infamous 165-kilometer (103 mi.) wall surrounding the 
western sectors of the city has been torn down, and the city has been 
physically reunited.  President Clinton highlighted the lasting 
significance for all free nations of the fall of the Berlin Wall in a 
speech at the Brandenburg Gate on July 12, 1994--the first address by 
a U.S. president delivered from the eastern side of that Berlin 
landmark.

Shortly after World War II, Berlin became the seat of the Allied 
Control Council, which was to have governed Germany as a whole until 
the conclusion of a peace settlement.  In 1948, however, the Soviets 
refused to participate any longer in the quadripartite administration 
of Germany.  At the same time, they also refused to continue 
cooperating in the joint administration of Berlin and drove the 
government elected by the people of Berlin out of its seat in the 
Soviet sector  and installed a communist regime in its place.  From 
then until unification, the Western Allies continued to exercise 
supreme authority--effective only in their sectors--through the 
Allied Kommandatura.  To the degree compatible with the city's 
special status, however, they turned over control and management of 
city affairs to the Berlin Senat (executive) and House of 
Representatives, governing bodies established by constitutional 
process and chosen by free elections.  The Allies and German 
authorities in the F.R.G. and West Berlin never recognized the 
communist city regime in East Berlin or G.D.R. authority there.

During the years of Berlin's isolation--176 kilometers (110 mi.) 
inside the former G.D.R.--the Western Allies encouraged a close 
relationship between the Government of West Berlin and that of the 
F.R.G.  Representatives of the city participated as non-voting 
members in the F.R.G. parliament; appropriate West German agencies, 
such as the supreme administrative court, had their permanent seats 
in the city; and the governing mayor of Berlin took his turn as 
President of the Bundesrat.  In addition, the allies carefully 
consulted with the F.R.G. and Berlin Governments on foreign policy 
questions involving unification and the status of Berlin.

The Quadripartite Agreement on Berlin in 1971 also provided for 
practical improvements in the life of Berliners.  It made possible 
unhindered civilian access to Berlin and greater freedom of movement 
between eastern and western sectors for a period of 20 years.  In 
addition, it contained Soviet acknowledgment of the ties that had 
grown between West Berlin and the F.R.G., including the latter's 
right to represent Berlin abroad.

Between 1948 and 1990, major events such as fairs and festivals were 
sponsored in West Berlin, and investment in commerce and industry was 
encouraged by special concessionary tax legislation.  The results of 
such efforts, combined with effective city administration and the 
Berliners' energy and spirit, were encouraging.  Berlin's morale was 
sustained, and its industrial production considerably surpassed the 
prewar level.  The Government of Germany asked the allies to maintain 
a military presence in Berlin until the complete withdrawal of the 
Western Group of Forces (ex-Soviet) from the territory of the former 
G.D.R.  The Russian withdrawal was completed August 31, 1994.  
Ceremonies were held on September 8, 1994, to mark the final 
departure of Western Allied troops from Berlin.  

U.S.-GERMANY RELATIONS 

U.S.-German relations have been a focal point of American involvement 
in Europe since the end of World War II.  Germany stands at the 
center of European affairs and is a key partner in U.S. relations 
with Europeans in NATO and the European Union.

But German-American ties extend back to the colonial era.  More than 
7 million Germans have immigrated over the last three centuries, and 
today nearly 25% of U.S. citizens can claim some German ancestry.  In 
recognition of this heritage and the importance of modern-day U.S.-
German ties, the U.S. Congress annually has declared October 6 to be 
"German-American Day."

The U.S. objective in Germany remains the preservation and 
consolidation of a close and vital relationship with Germany not only 
as friends and trading partners but also as allies sharing com-mon 
institutions.  During the 45 years in which Germany was divided, the 
U.S. role in Berlin and the large American military presence in West 
Germany served as symbols of the U.S. commitment to the preservation 
of peace and security in Europe.  Since German unification, the U.S. 
commitment to these goals has not changed.  The U.S. has made 
significant  reductions in its troop levels in Germany, and, on July 
12, 1994, President Clinton "cased the colors" at the Berlin 
Brigade's deactivation ceremony.  American policies, however,  
continue to be shaped by the awareness that the security and 
prosperity of the United States and Germany depend--to a major 
extent--on each other.  Over 80,000 U.S. military personnel will 
remain in Germany to protect these common interests. 

As allies in NATO, the United States and Germany work side by side to 
maintain peace and freedom.  This unity and resolve made possible the 
successful conclusion of the 1987 U.S.-U.S.S.R. Intermediate-Range 
Nuclear Forces Treaty (INF), the Two-plus-Four process, which led to 
the Final Settlement Treaty, and the November 1990 Conventional Armed 
Forces in Europe (CFE) Treaty.

As two of the world's leading trading nations, the United States and 
Germany share a common, deep-seated commitment to an open and 
expanding world economy.  Germany is the world's second- leading 
trading nation. It is the fifth-largest trading partner of the United 
States.

Personal ties between the United States and Germany extend beyond 
immigration to include lively foreign exchange programs, booming 
tourism in both directions, and the presence in Germany of large 
numbers of American military personnel and their dependents.  In the 
commercial sphere, more than 600,000 Germans work for U.S. companies 
in Germany while Americans employed by German firms here number over 
500,000.

The United States and Germany have built a solid foundation of 
bilateral cooperation in a relationship that has changed 
significantly over four decades.  The historic unification of Germany 
and the role played by the United States in that process have served 
to strengthen ties between the two countries.  The relationship is 
now a mature partnership but remains subject to occasional 
misunderstandings and differences.  These strains tend to reflect the 
importance, variety, and intensity of U.S.-German ties and respective 
interests rather than fundamental differences.

German-American political, economic, and security relationships 
continue to be based on close consultation and coordination at the 
most senior levels.  High-level visits take place frequently, and the 
United States and Germany cooperate actively in international forums.

Principal U.S. Embassy Officials

Ambassador--Charles E. Redman
Deputy Chief of Mission--J.D. Bindenagel
Minister-Counselor for Political Affairs--Robert D. Johnson
Minister-Counselor for Economic Affairs--Janice Bay
Minister-Counselor for Commercial Affairs--Robert Kohn
Minister-Counselor for Administrative Affairs--Donald S. Hays
Minister-Counselor for Consular Affairs--Michael Marine
Minister-Counselor for Public Affairs--Robert Earle
Chief, Office of Defense Cooperation--Col. Karl D. Horn, USAF
Defense Attache--Col. Lawrence J. Kimmel, U.S. Army

The U.S. embassy in Germany is located at Deichmanns Aue, 53170 Bonn 
(0228) 339-1.  A branch office of the embassy is in Berlin, and 
consulates general are in Frankfurt, Hamburg, Munich,  Stuttgart, 
Leipzig, and Dusseldorf.

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides 
Travel Warnings and Consular Information Sheets. Travel Warnings are 
issued when the Department of State recommends that Americans avoid 
travel to a certain country. Consular Information Sheets exist for 
all countries and include information on immigration practices, 
currency regulations, health conditions, areas of instability, crime 
and security information, political disturbances, and the addresses 
of the U.S. embassies and consulates in the subject country. They can 
be obtained by telephone at (202) 647-5225 or by fax at (202) 647-
3000. To access the Consular Affairs Bulletin Board by computer, dial 
(202) 647-9225, via a modem with standard settings. Bureau of 
Consular Affairs' publications on obtaining passports and planning a 
safe trip abroad are available from the Superintendent of Documents, 
U.S. Government Printing Office, Washington, D.C. 20402 (202) 783-
3238.

Emergency information concerning  Americans traveling abroad may be 
obtained from the Office of Overseas Citizens Services at (202) 647-
5225. 

While planning a trip, travelers can check the latest information on 
health requirements and conditions with the U.S. Centers for Disease 
Control and Prevention in Atlanta, Georgia. A hotline at (404) 332-
4559 provides telephonic or fax information on the most recent health 
advisories, immunization recommendations or requirements, and advice 
on food and drinking water safety for regions and countries. A 
booklet entitled Health Information for International Travel (HHS 
publication number CDC-94-8280, price $7.00) is available from the 
Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and 
customs regulations, legal holidays, and other items of interest to 
travelers also may be obtained before your departure from a country's 
embassy and/or consulates in the U.S. (for this country, see 
"Principal Government Officials" listing in this publication).
 
Upon their arrival in a country, U.S. citizens are encouraged to 
register with the U.S. embassy (see "Principal U.S. Embassy 
Officials" listing in this publication). Such information might 
assist family members in making contact en route in case of an 
emergency.

Further Electronic Information:

Consular Affairs Bulletin Board (CABB). Available by modem, the CABB 
provides Consular Information Sheets, Travel Warnings, and helpful 
information for travelers. Access at (202) 647-9225 is free of charge 
to anyone with a personal computer, modem, telecommunications 
software, and telephone line.

Department of State Foreign Affairs Network. Available on the 
Internet, DOSFAN provides timely, global access to official U.S. 
foreign policy information. Updated daily, DOSFAN includes Background 
Notes; Dispatch, the official weekly magazine of U.S. foreign policy; 
daily press briefings; directories of key officers of foreign service 
posts; etc. DOSFAN is accessible three ways on the Internet:

Gopher:  dosfan.lib.uic.edu

URL:  gopher://dosfan.lib.uic.edu/

WWW:  http://dosfan.lib.uic.edu/dosfan.html

U.S. Foreign Affairs on CD-ROM (USFAC). Published on a quarterly 
basis by the U.S. Department of State, USFAC archives information on 
the Department of State Foreign Affairs Network, and includes an 
array of official foreign policy information from 1990 to the 
present. Priced at $80 ($100 foreign), one-year subscriptions include 
four discs (MSDOS and Macintosh compatible) and are available from 
the Superintendent of Documents, U.S. Government Printing Office, 
P.O. Box 37194, Pittsburgh, PA 15250-7954. To order, call (202) 512-
1800 or fax (202) 512-2250.

Federal Bulletin Board (BBS). A broad range of foreign policy 
information also is carried on the BBS, operated by the U.S. 
Government Printing Office (GPO). By modem, dial (202) 512-1387. For 
general BBS information, call (202) 512-1530.

National Trade Data Bank (NTDB). Operated by the U.S. Department of 
Commerce, the NTDB contains a wealth of trade-related information, 
including Country Commercial Guides. It is available on the Internet 
(gopher. stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at 
(202) 482-1986 for more information.

Published by the United States Department of State  --  Bureau of 
Public Affairs  --  Office of Public Communication  --  Washington, 
DC  --  July 1995  --  Managing Editor:  Peter A. Knecht  --  Editor:  
Marilyn J. Bremner

Department of State Publication 7834  --  Background Notes series  --  
This material is in the public domain and may be reprinted without 
permission; citation of this source is appreciated.

For sale by the Superintendent of Documents, U.S. Government Printing 
Office, Washington, DC  20402.  

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