West German Economy 1949 to 1991 Flashcards
Describe the Marshall Plan, including what it was and how much West Germany recieved.
USA lent funds to Western European (capitalist) countries to help with the aftermath of WW2.
More than $15 billion was given overall, with around $1.4 billion going to West Germany.
When and what was the currency reform in West Germany?
Moved from the Reichsmark to the Deutschmark in 1948.
Using statistics, compare unemployment in West Germany in 1950 against 1960.
Unemployment is 10.3% in 1950, down to 1.2% in 1960.
Employment is up 6 million from 1950 to 1960.
Using statistics, compare industrial production in West Germany in 1950 against 1960.
Industrial production was 2.5 times higher in 1960 compared to 1950.
GDP rose by 66% from 1950 to 1960.
Describe the Social Market Economy in West Germany, including the reasons for it being successful.
A middle ground between state intervention and a free market
Rebuilt Trade Unions & increased productivity
West Germany joined the European Coal & Steel Community
Investment funds under the European Recovery Program
Increased demand for German goods due to the Korean War (1950-53)
Law Against Monopolies prevented big companies from completely taking over a product
When did West Germany join the EEC and why was it beneficial?
West Germany were one of the founding members in 1957, formed under the Treaty of Rome.
An established common market meant common policies on agriculture & transport which saved money.
There was a lack of trade barriers which allowed access to cheaper products, foreign markets, and a flow of skilled labour.
Describe the economic situation in West Germany during the 1960s, including the aftermath of the economic miracle and the reasons for the slowdown.
The growth of the 1950s was unsustainable and so there was a recession in the 60s.
East German labour was cut off due to the Berlin Wall in 1961.
The Bundesbank limited money supply to slow growth.
When and what was the Stabilisation Law?
1967, it formed cooperation between the government, unions, and employers.
Describe what happened during the two Oil Crises, including when they were, why they happened, and the aftermath of them.
In 1973 OPEC increased crude oil prices which was used as a political weapon against Israel due to the Yom Kippur War
- Unemployment hit 1 million by 1975 and GDP fell by 1.4%
- Schmidt increased government spending & reduced taxes to create jobs which solved this, but caused a larger balance
of payments deficit
In 1979 the Iranian Revolution happened and their leader was overthrown, causing another oil crisis.
- This caused recession and unemployment, but inflation was kept low.
What is Gastarbeiter?
Encouragement of foreign workers to come to Germany.
1.2 million (10%) of the German workforce were a part of Gastarbeiter by 1966.
