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From Birmingham 1998 to Köln 1999.


~ Germany Contents ~ Country Objectives ~

Political Data
Head Of State: Roman Herzog
Chancellor: Gerhard Schröder
Foreign Minister: Joschka Fischer
Economic Minister Werner Müller
Finance Minister: Hans Eichel
Interior Minister: Otto Schily
Central Bank Governor: Hans Tietmeyer
Environmental Minister: Jürgen Trittin
Justice Minister: Herta Däubler-Gmelin
Employment Minister: Walter Riester
Sherpa: Klaus Gretschmann
Sous-Sherpa (Finance): Michael Röskau
Sous-Sherpa (Foreign Affairs): Joachim Broudré-Gröger
Political Director: Gunter Pleuger

Political Parties forming the Government: SPD (Social Democratic Party) and Green coalition.
Number of Seats: total 662 in Bundestag.
Opposition Parties: CDU (Christian Democratic Union), CSU (Bavarian Christian Social Union), FDP (Free Democratic Party), and PDS (Party of Democratic Socialism).
Date of last election: September 27, 1998
Date of next election: September 2002


Economic Data
Gross Domestic Product (GDP) (1998): DM 3,799.4 bn, up 2.3% since 1997.
GDP per Capita: NA
Economic Growth Rate: approx. 2%
Inflation: .5% CPI (12/98)
Unemployment rate: 10.7%
Bank Rate (interest rate): 35.0 US$ billion
Exchange rate: NA
Current account
Foreign Direct Investment
Creditor/borrower: NA
Foreign Aid as % of GDP: NA
World Ranking: 3
Major Trading Partners: EU countries accounted for nearly 70% of all trading in 1998, France ranked first in terms of both German exports and import expenditure.
Exports/ Imports: Exports value DM 886.8 bn 1997; Imports value DM 755.9 bn. Exports include a main emphasis on finished products (85.4%,1997), of those motor vehicles and motor parts are ranked first (16.2%).

Country Report for Germany


The top policy priorities for Germany, likely to be addressed at the 1999 G7/G8 Summit in Cologne ranked in order of importance are as follows:

Country Analysis:


Although the German Summit hosts originally put the global economic situation on the top list of priorities to be discussed, events in Kosovo and the German-led G8 peace initative will now be the central topic, replacing the omnipresent summit themes of globalization and the new financial architecture. Of utmost importance to the German agenda will be the peaceful disarmament of all Serbian and KLA units as NATO plans to move into the province behind the retreating Serb forces. In addition to the military agreement, under the chairmanship of Germany the blueprint for the "Marshall Plan of the Balkans" will be a significant issue addressed at the Summit. Devised by Ministers from Europe, the United States, Russia and Japan in Cologne on June 9th, the plan comprises one of the most ambitious reconstruction packages since the European Recovery Program following World War II. Critics however, have noted that no funds have yet to be pledged, as the US appears reluctant and the EU, upon which the bulk of responsibility falls, is already burdened by insufficient funds. According to the spiraling budget deficit of Germany, the EU's largest contributor, the German government maintains a vested interest in this issue, predicted to receive a considerable amount of attention at the Summit.

Domestically, Germany has witnessed an increase in foreign policy concern which, have surpassed both economic and unemployment issues as the focus of both government and media attention. The issue of German participation in NATO strikes against Yugoslavia is one of the most delicate and potentially divisive issues that the country has seen in decades. By ordering the deployment of German troops, outside of Germany for the first time since World War II, Chancellor Schroeder made a decisive break with the country's fifty year-old pacifist traditions. Foreign Minister Joschka Fischer faced an even harder task by trying to convince both the public at large and his own strongly resistant Green Party of the necessity of NATO bombs. By the middle of May, the Red/Green coalition, still recovering from the resignation of Oskar Lafontaine, appeared to be once again in danger of breaking apart.

Crisis Prevention through Debt Relief:

According to the German government debt initiative for the Heavily Indebted Poor Countries (HIPC) which has been developed in conjunction with the World Bank and the IMF, debt relief is likely to be a central issue pursued at the Summit. Recognizing that debt relief by donors is inherently linked to economic recovery, the German government is anticipating to make contributions toward the World Bank HIPC Trust in 1999. Already committed to the debt relief of 7 countries, Germany will focus upon the binding and complete cancellation of debts for all countries that qualify under HIPC and will attempt to speed up the debt relief process through the cooperation and support of other G7 members.

Economic and Social Policy/ Investing in Human Capital Building:

The pursuit of European integration continues to be at the heart of Germany's foreign policy. However, before agreeing to further eastern expansion of the EU, Germany is seeking to lower its financial contributions, as well as the financial costs of membership. Two central issues and concerns for Germany this year are to discourage "social dumping" while encouraging tax harmonization among the Member States. Both of these issues stem from what continues to be the overarching concern for both the German public and their government: unemployment. Unemployment rates rose slightly last November but have since leveled off at between 10 - 10.5%, leaving 4.1 million Germans jobless. The Schroeder government undertook several new initiatives to combat unemployment, including the specific targeting of youths. By all accounts however, the main difficulty continues to be the structural rigidities within the economy. An inflexible labor market, high taxes and countless government regulations are persistent barriers to addition of new jobs within German companies.

While the resignation of Finance Minister Oskar Lafontaine pleased the markets and caused an up swing for the Euro, the new European Currency has not met its initial expectations. Germans, however, will continue to see the Euro as an integral element of the political and functional integration of Europe, which is where their future lies.

Relating to both dominant foreign and domestic policy concerns, the issue of immigration will also maintain top priority for the German government in Cologne. As the Schengen regulations for border free travel, effective May 1, 1999 are considered one of the most important elements of European integration, increased illegal immigration to Germany via eastern European countries has been a central area of concern for the SPD/Green coalition. Responding to this Germany has significantly increased its border control and policing of illegal immigrants. Domestically, the ever-controversial dual nationality proposal was unveiled in Germany in March of this year. The "option model" reform of German citizenship law grants dual nationality to those persons born of foreign parents beginning in January 2000. Upon the ages of 18-23 the individuals must choose to be German citizens or maintain the citizenship of their country of origin. In addition to the intense political divisions which have emerged as a result, the fact that Germany is the only country to require immigrants to give up previous citizenship has been a cause of concern at the EU level where the Amsterdam Treaty is attempting to harmonize national immigration policies.

Nuclear Safety and the Environment:

Since the new government took control of the Bundestag last fall, two Green Party initiatives in foreign and environmental policy have placed notable strains on Germany's relationships with its most important allies: the United States, France and Britain. In relation to the highly debated Kosovo issue, the new government briefly attempted to influence both NATO and the US to commit to "no first use" of nuclear weapons. The German government was swiftly and sternly informed that such an amendment to the NATO doctrine was out of the question. In addition, Juergen Trittin, the Green Environmental Minister caused a similar controversy with his pursuit of the Green Party's commitment to permanently shut down Germany's nuclear reactors. Both British and French firms with contracts to process the country's nuclear waste stood to lose more than $6 billion if the plants were to close. With few alternate energy sources available, German industry would also be faced with higher energy costs which would in turn cause a further lull in economic growth. Faced with little alternatives, Chancellor Schroeder postponed any permanent decisions on nuclear power until next year.

Although environmental policy continues to be a main concern of the SPD/Green coalition government, it is an undeniable reality that issues of unemployment and immigration will take top priority at the Summit. This can most effectively be noted by the country's employment policy, which has been directed toward old industries such as coal and shipbuilding bearing extremely negative effects upon the environment. It was previously hoped that the EU Council Presidency, held currently by Germany would enable environmental issues to receive the attention they deserve. A significant influence in this area however has yet to be realized.

Prepared by Lorna Schmidt and Jennifer Wagner, University of Toronto G8 Research Group, June 1999

~ France Contents ~ Country Objectives ~

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