FRG Economy Flashcards
(25 cards)
What were the main economic problems facing the FRG after the war?
-50% of houses damaged or destroyed.
-Food shortages- consumption fell to 950-1150kcal per day.
Reasons for economic stability 1949-89.
-Outside influences
-FRG government’s actions in the early years
-FRG government’s actions in the later years.
Importance of outside influences in stability of FRG economy.
Allowed a basis from which the FRG could rebuild and restabilise.
What did the USA give Germany to help its economy after WW2? What year?
Marshall loans to rebuild. 1947.
When was the Korean War? How did it help the FRG’s recovery?
1951-53; created higher demands for German industrial goods like steel and chemicals, while USA was focused on re-arming.
What organisation helped build Germany’s international relations?
EEC- which Germany was a co-founder of in 1957.
What was some of this international aid the result of?
Actions by government; founding EEC, intro of guest workers pushed by Erhard; explai due to this international aid being achieved BY gov, gov played a bigger role.
What type of economy did Erhard introduce in the early years of the FRG?
Social market economy; combined social justice with free market capitalism. Helped his ‘economic miracle’.
Erhard’s policies for workers
Co-determination of workers gave them more influence over their working conditions.
Work creation schemes.
What new currency did Erhard introduce?
Deutschmark in 1948
What did post-war economic policies Erhard abolish early on?
Price controls and rationing; improved standard of living.
Evidence of Erhard’s economic miracle.
Reduced unemployment from 8% to 0.5% 1950-65.
Which law increased investment and boosted the economy?
Investment Aid Law 1952; German exports became more attractive and grew.
Evidence of gov ability to deal with crises: Oil crises 1973 and 78
Under Schiller, evidence of international influences having a detrimental impact.
Measures such as car free Sundays and a switch to nuclear energy to minimise damage.
Evidence of gov ability to deal with crises: Recession
Recession 1966-67, intro of the Economic Stabilisation Law, to prevent worsening conditions and retain stability.
How many guest workers came to the FRG in the 1950s?
3.6 million- many of them skilled so didn’t need training for high level jobs.
What economic challenges were there in the 80s?
Gap between richest and poorest widened.
Unemployment rose to 1.7 million
How did Kohl and Schmidt respond to the challenges of the 80s?
Schmidt cut public spending, and Kohl increased cuts.
Cut public holidays and reduced retirement.
Unemployment at its lowest.
Key economic features.
Aims
Policies
Success.
Early economic policies to evaluate the success of
Recovery from WW2
Social Market Economy
Integration with Europe
Evidence of success in terms of recovery from WW2
-Intro of Deutschmark 1948
-Abolished price controls, rationing
-Black market disappeared
-Economic growth via refugees
-Avg economic growth rate of 8%
Evidence of failure in terms of recovery from WW2
Unemployment rose initially until 1955.
Evidence of success in terms of SM economy
-Combination of a capitalist market and a responsible gov providing a safety net; middle way.
-Good union representation, cartels broken up, tax concessions for business.
Evidence of failure in terms of SM economy
Socialist wanted more government control.
Industrialists wanted cartels.
