FRG - Economy Flashcards
1
Q
Germany’s situation straight after the War
A
Split into 4 zones
Germany to pay $23 billion in reparations to Allies
War industries in Germany banned (e.g. heavy industry)
Germany POWs used as forced labour
2
Q
Refugee problems, 1945-55
A
- 10-12 million Germans came in as refugees to West Germany
- Rationing introduced
3
Q
Stabilising the economy, 1945-55
A
- $14 billion in Marshall Aid given to FRG
- Creation of Deutschemark stabilised economy + stopped black market
- Worth of wages increased - more people working
4
Q
Erhard’s Reforms
A
Erhard - Econ minister (1949-63)
- Abolition of rations on bread and milk
- Equalisation of Burdens Act (1952) - tax on assets used to help people who have lost everything in the war
- Social Market Economy
5
Q
Social Market Economy
A
- Capitalist market with gov’t safety net
- Policy of Co-determination (1951) - workers represented in company boards
- Opposed by Socialists who wanted to nationalise industry
- Successful in encouraging supply and demand
- Unemployment rose to 1.8m by 1950
6
Q
Economic Miracle
A
1955-66
- Korean War increased demand for German weapons
- Industrial development increased by 150%
- By 1960, 500k Volkswagen cars sold to USA
- Influx of highly-skilled refugees to help workforce
- Unemployment drops from 8.1% (1950) to 0.5% (1965)
- Berlin Wall (1961) meant refugees could not cross the border - economy struggles
7
Q
Post- ‘Economic Miracle’ recession
A
1966-7
- Increased unemployment, decreased productivity
- Economic Stabilisation Law (1967) - Emergency gov’t spending to limit federal spending
- Schiller’s policies failed - growth reaches -0.2% (1967)
8
Q
Oil Crisis
A
1973
- OPEC Embargo on Israel-Supporting countries
- Price of oil increased significant - FRG unable to cope
- Unemployment rises sharply
- Led to ‘oil rations’ - car-free Sundays, speed limits on Autobahns
9
Q
Challenges under Kohl
A
1982-98
- Unemployment hit 1.7 million (1981)
- A third of the population are guest workers
- Kohl privatises businesses
- By 1989, unemployment low and economy growing
10
Q
Integration into the European Economy
A
1952
- FRG joins the IMF to oversee currency stabilise
- FRG joins the Economic Coal & Steel Community
- -> increased FRG coal trade 10 times
1957
- FRG joins the European Economic Community
- -> FRG is the wealthiest member
- -> led to complete free market with member states
11
Q
Living standards post-War
A
- Destruction of WW2 led to lack of homes and food
- By 1949, 69% of housing built was social housing
12
Q
FRG development into consumer society
A
- Growing disposable income led to increase in consumerism
- Most houses had fridges and TVs by 1985
- By 1990s, most received a state pension
- Life expectancy increased by 12 years 1950-80
