Theme 3: Creatin Social Market Economy

Question 1

Economic recovery: what did the allies want to do?

Answer 1

• important Germany wouldn’t start another war
• war industries banned
• war related industries (chemicals) restricted

Question 2

Economic recovery: what was the situation with economics?

Answer 2

• Reichsmark almost worthless

Question 3

Economic recovery: What did the French and Soviets dismantle?

Answer 3

• factories
• for reparations
• under minded change of recovery

Question 4

Economic recovery: what started to change/ emerge and why were people reluctant?

Answer 4

• black market back
• people reluctant to work as wages couldn’t get them anything
• many left Germany due to devastations
• lots of refugees
• rationing introduced

Question 5

Economic recovery: when was Marshall aid given?

Answer 5

1948

Question 6

Economic recovery: what did Marshall Aid do?

Answer 6

• given to western zones
• deteriorated relations
• creation of Deutschmark re-set currency and broke black market

Question 7

Economic recovery: what role did Erhard have?

Answer 7

• director of economic administration
• March 1948

Question 8

Economic recovery: what did Erhard do?

Answer 8

• got rid of all but essential rationing- 1948
• wages were fixed to allow business men to establish themselves

Question 9

Economic recovery: what opposition/ support did Erhard face?

Answer 9

• from changing from command economy to social market
• USA supported
• Industrialists mixed
• socialists opposed change- wanted nationalist industry

Question 10

Economic miracle: factors that contributed- Korean War

Answer 10

• USA needed supplies for war production
• FRG not allowed to produce these but could produce chemicals
• 1955- FRG joins NATO and could re-arm

Question 11

Economic miracle: factors that contributed- workers

Answer 11

• refugees meant there were lots of guest workers
• wages were kept low

Question 12

What were the problem’s with the economic miracle?

Answer 12

• not possible for growth to continue at same rate
• once everyone bought consumer goods, demand dropped and people replaced things at different times
• Berlin Walls 1961 cups off all refugees

Question 13

How did they survive the economic challenge?

Answer 13

• real economic growth moved slower after 1966
• economic minister Karl Schiller
• rising levels of govt welfare on social spending

Question 14

What was the Recession of 1966-7?

Answer 14

• trade reduced
• unemployment reduced
• loss of guest workers- productivity fall
• public spending was out of control

Question 15

What causes the oil crisis of 1973 and 1978?

Answer 15

• FRG relied on oil not coal
• car ownership pushed up petrol consumption
• Arab- Isralei war pushed up oil prices
• FRG oil bill increased

Question 16

What was the consequences of the oil crisis?

Answer 16

• unemployment rose again
• FRG helped by export income- improve economy
• oil consumption dropped

Question 17

What did the govt do to drop oil consumption?

Answer 17

• encourages car free Sundays
• energy saving tactics
• invested in automatic power

Question 18

Integration! Why did Adenauer want to be part of Europe?

Answer 18

• saw political and economic integration vital for FRG success
• wanted close link with France

Question 19

Integration: who was EEC and why were they created?

Answer 19

• European Economic Community
• EEC created to improve economic prosperity between members
• successful- coal increased, provided homes and jobs

Question 20

Living standards: 1950s?

Answer 20

• 416,000 houses built in 1952
• but only 7% had heating
• few had TVs or white goods

Question 21

Living standards: 1980s?

Answer 21

• 82% of homes had fridges and TV
• but employment divided by wealth

Question 22

Advantages to living standards?

Answer 22

• cheaper living than GDR
• car dealership rose
• 1980- most people received state pension