Surviving economic challenges, 1966-89 Flashcards
1
Q
What did Recession during the mid 1960s result in?
A
- Unemployment rising by 3.8%
- Inflation increasing by 4%
- Shook people’s confidence in West German prosperity
2
Q
Who was Economic Minister of the Grand Coalition and how did he respond?
A
- Schiller of the SPD, responded by introducing a more planned economy
3
Q
Schiller’s measures included…
A
- The Stabilisation Law of 1967 - designed to improve cooperation between federal government, employers and employees
4
Q
What was this known as?
A
- Concerted action - law created the potential for central government powers to increase
- This allowed them to alter taxes and rase loans
5
Q
What was the result of The Stabilisation Law?
A
- Stimulated the economy
- Reducing public spending and raising taxes meant VAT went up from 10% to 12%
6
Q
What pressured West Germany to revaluate their currency?
A
- High level of exports and a strong demand for the Deutschmark
7
Q
What led to the collapse of the Grand Coalition?
A
- Could not agree on a policy to rectify this issue
8
Q
What did Post-war West Germany rely on for European economic growth?
A
- Cheap oil imports
9
Q
What did the OPEC announce?
A
- Its members would increase the price of oil by 70% whilst reducing output by 5%
10
Q
What did the oil price ‘shock’ have the effect of?
A
- Significantly increasing the cost of production in oil importing countries
- Unemployment rose from 1.2% to 4.7%
11
Q
How did the FRG’s economy cope with the oil ‘shock’?
A
- Switched to nuclear power - away from oil
- Extension of the role of the EEC which greatly benefited Germany
12
Q
What was the aim of the EEC (1957)
A
- To promote European harmony and prosperity through creating a common market
13
Q
How did the EEC significantly benefit Germany?
A
- Improved trade relations
- Germany was the largest producer of coal and steel in Europe
- Allowed them to export raw materials - gaining major capital to reinvest into improving Germany
