Government economic policies had a mainly positive effect on the German economy in the period 1871-1990. How far do you agree with this statement Flashcards
When did Bismarck introduce tariffs?
1879
What did the Reichstag pass in order for Bismarck to introduce tariffs?
The protective tariff law 1879
Who backed the 1879 Protective Tariff Law?
The two conservative parties and the centre party
How was the Protective Tariff law a political tool for Bismarck?
He wanted to use it to weaken the national liberals and strengthens his now preferred german conservatives
How did Bismarck make the Protective Tariff law a matter of patriotism?
He said that supporting it was a patriotic duty because it supported Germany against foreign competition, and so those who backed free trade were traitors to Germany
Who backed free trade?
National Liberals
What was the impact of the Protective Tariff Law for Bismarck’s voter base which suggests that it did have a good impact on the German economy?
Many National Liberal Voters were peasant farmers switched to the Bismarck-backed Conservative party.
How did those in heavy industry respond to the 1879 tariffs?
They were grateful for the tariffs however they were disappointed that they were higher on agriculture than they were on iron
When did Wilhelm II enter power?
1888
what did Wilhelm II want to resurrect in order to promote growth and reinforce Germany’s world status?
Navy
Why did the german middle and academic classes support the resurrection of the navy?
because of the economic benefits that it would lead to
What suggests that government policy had a negative impact in the early stages?
By 1873, the German economy had collapsed because it had expanded too quickly with too many businesses setting up with unsustainable business strategies
Inspire of the 1873 collapse, what did the National Liberals maintain?
That free trade was the best way to maintain Germany’s position
How were the protectionist policies perhaps not beneficial in the long term?
the lack of cheap russian imports for grain meant that the price of bread went up
How were the protectionist policies beneficial in the short term?
boosted the price of german agricultural produce
Which two people did what in 1924 in Weimar?
Chancellor Stresemann with help from Schact introduced the interim currency of the Rentenmark which stabilised the economy
What had happened in 1927 which suggests that government policy and a positive impact?
By 1927 industrial production had reached pre-WW1 levels
Between which two dates did GDP grow significantly under Weimar?
1825-1829
When was the Dawes plan
1824
What is the downside of the 1824 Dawes plan?
The Dawes plan, however, was only a positive decision in the short term and in the longer term created a much more fragile economy than would otherwise have been created. Germany suffered far worse than did their neighbours of France or Italy because of the extent to which they relied on Wall Street Investment.
When was hyperinflation?
1923
How much did a loaf of bread cost due to hyperinflation?
DM9 million
Why was there hyperinflation due to government policies?
government was unwilling to rationalise the economy and tried to pay for reparations by printing money rather than raising taxes
What is the one word that sums up the impact of government policies not he economy during the Kaiserreich?
varied
How were the Nazis successful?
successful in terms of employment not so much in terms of consumer sector
When was Schact made president of the Reichsbank
March 1933
between which dates was Schact minister for Economics?
August 1934—November 1937
What kind of economics did Schact believe in?
Keynesian
What did Schact’s belief in Keynesian economics mean?
That governments should spend their way out of economic misfortune rather than making cuts
What did Schact’s economic beliefs about spending mean for infrastructure?
This led to RM 5 000 million being invested in public works programmes between 1933-35
RM 5 000 million was invested in public works programmes between 1933-35. What did this mean for employment levels in the Nazi era?
unemployment falling from 2.7 million in 1934 to 1.7 million in 1935
what is the deficit financing in the Nazis known as?
Mefo bills
What were Mefo Bills?
government contracts to large companies, mostly for re-armament, were not paid in Reichmarks, but in credit notes that found be paid in four years’ time
How many RM worth of Mefo Bills did the Reichsbank issue?
RM 12 000 million
What percentage of arms expenditure between 1934-36 was financed by Mefo bills?
50%
As the economy recovered, however, Mefo Bills were used less, why was this and what did it suggest?
as taxation and loans could be used to finance Hitler’s drive for war. The fact that they were being used with reduced frequency is indicative of government policies that were aiding the economy’s recovery.
what did Schact introduce in 1934?
New Plan
What did the New Plan do?
Regulated imports with a series of agreements with SE European and South American countries
What did the New Plan ensure?
A strong supply of raw materials
How did the New Plan respond to the poor balance of payments that germany was experiencing?
The imports would be paid for German marks but the deals stated that they had to be used to buy German exports or invest in German industries. This ensured that there was also a high demand for German exported goods
Who, from what year as minister for armament and ammunitions, streamlined the economy and reduced the confusion that had been created under Göring’s four year plan
1940 Fritz Todt
what happened to Todt and what did this mean for his job?
Died in a plane crash which meant that Speer took over in 1939
Through reducing wastage what arms production increase did Speer oversee?
Reducing wastage, he achieved an arms production level that was 32% higher in 1942 than in 1939.
By utilising modern production techniques, Speer increased tank and engine production by what percentage despite what happening?
Speer increased tank and engine production by 200% between 1939 and 1944, depsite the number of workers only increasing by 11%
From 1933, rearmament contracts were made with how many companies, showing the extent of the economic benefits to rearmament?
2 800
Which company took tractor order which were actually for tanks, covert because it violated the terms of Versailles?
Krupps
Assess the 4 year plan
The Four Year plan was successful in that in increase Germany’s military capabilities but not to the amount that Hitler wanted.
When did Schact resign?
1937
What does Schact’s 1937 resignation demonstrate?
that whilst there was strong growth in the early part of the Nazi period and government policy was having a positive effect, in the latter part this decreased.
Why did Schact resign?
Schact resigned because he suggests that rearmament should be reduced and consumer goods production increased because imports lay at an unsustainable rate as Germany wasn’t exporting enough to balance this.
What did the 4 year plan invest heavily in order to pursue Hitler’s dream of Autarky?
Ersatz goods that germany couldn’t make or produce themselves
what is the fact about Ersatz goods?
the production of synthetic fuels increased by 130% but this equated to just 18% of the demands for fuel
Why was the economic success unsustainable by 1939?
By 1939, economic policy had become unsustainable because consumer spending was restricted by freezing wages and increasing taxation. in spite of the growing population
What did Hitler ideologically oppose which limited the potential for employment success?
Employment of women, creating resentment against the government
What happened in 1944?
Göbbels was made total war plenipotentiary in an attempt to reverse German losses
Assess Göbbels being made total war plenipotentiary in an attempt to reverse German losses?
This largely failed, however, with only 271 000 more women hired and a barely functioning economy being propped up by 20% of the workforce being foreign.
Overall what was the impact of policies in the FRG?
Mostly positive
What basic ideology of Adenauer can much economic success be attributed to?
Adenauer was convinced that Germany’s economic future lay linked to the USA and greater integration with the world, an approach to which much of the successful growth can be attributed.
Under the marshall plan, how much did Germany revive the 1940s and 1950s?
2.7 billion dollars
What did a US report say about the value of Marshall aid?
crucial because it fired the economy
What do some say about marshall aid?
Whilst it did not hinder growth, it only accelerated what was already happening
What percentage of German imports were paid for by marshall aid?
37%
when was the truman Doctrine announced?
12th June 1947
What percentage of its pre war output had Germany achieved without aid by 1946?
40%
When was tried-Zonia created?
June 1948
what was the first step towards the EEC?
First step to European Economic Unity came in April 1951 with the formation of the European Coal and Steel Community (ECSC)
The First step to European Economic Unity came in April 1951 with the formation of the European Coal and Steel Community (ECSC). What did it do?
which combined the heavy industries of France, West Germany, Italy, Belgium Holland and Luxembourg into one state
What established the EEC and when was this?
25th March 1955 the Treaty of Rome established the EEC
On 25th March 1955 the Treaty of Rome established the EEC. what did this do?
created a common market between the 6 nations, abolished tariffs and helped the West German economy considerably
What percentage of imports and exports were related to the EEC by 1981?
45% of German exports went to EEC members whilst 47% of Germany’s imports came from the EEC
What increased West Germany’s agricultural exports, especially in milk, sugar and butter?
The 1962 Common Agricultural Policy
What shows the benefits of the CAP?
Between 1971-77 West Germany’s share of sugar exports within the EEC rose by 19%
How expensive was the CAP for germany?
At times West Germany was spending 30% of its total expenditure on the CAP
The CAP was expensive but who benefitted?
small agricultural industries
What did the CAP encourage?
Inefficient domestic agricultural practices
What percentage of the EEC’s total budget did the CAP take up?
sometimes 70% but 50% in 1989
Why did the extent to which Germany paid for the CAP upset those within germany?
West Germany was a highly industrialised nation with a small agricultural sector and a net importer of food so there was unhappiness at the country subsidising other countries’ agriculture.
By 1989, what percentage of German Agricultural value came from CAP subsidies?
⅔
What did Wilhelm support?
Weltpolitik
What idd Weltpolitik mean?
Expanding Germany’s navy and empire
Who did Wilhelm give the task of expanding germany’s navy?
Admiral Tirpitz
Give an example of an industrialist who supported the new navy?
Krupps
Why did Wilhelm’s project originally flounder?
he couldn’t get the reichstag to pass sufficient funds for the navy
What did Tirpitz establish to pressure the reichstag?
the Navy League, a pressure group with the support of several industrialists aimed at campaigning for naval expansion
When did the reichstag agree to Tirpitz’ bill to build 17 ships over 7 years?
1898
By when had Germany doubled the size of its navy?
1914
When was the bill passed to increase the fleet to 36 ships?
1900
How were these navy bills passed?
thanks to a huge propaganda campaign
Despite the Kaiser’s claims about the unifying power of the navy, who did he fail to win over?
The SPD
What did Kohl sell shares in?
Lufthansa and Volkswagen
