EconomicissuesinGermany.pptVIP

Economic issues in Germany 1945-2005 Group 1, presentation 2: Laura Bond-Powell Joanne Eldridge Andria Ioannou Katie MacDonald Catherine Wood West Germany- Economy (Post War) West Germany- Economy (1950s) Wages and salaries rose over 80% between 1949 and 1955, catching up with growth.? West Germany- Economy (1960s) West Germany- Economy (1970s) West Germany- Economy (1980s) West Germany- Economy (Reunification) East Germany- Economy Similar economy to all other Soviet states Centrally-planned economy (CPE) State-owned factories etc. Everyone employed to do something, however insignificant Prices fixed administratively by the CPE- didn’t necessarily reflect the product’s value Entire year’s economy planned in advance: rate of economic growth, utilisation of raw materials labour, amount of imports/exports… 1981 Plan- assessed amounts of raw materials and amount/quality of end product, to ensure efficient use of resources East Germany- Economy All products consumed/used in the GDR were also produced there CPE ensured no private businesses and no room for decisions/initiative In 1985, over 95% of the total national income was earned by state-owned enterprises. Everything distributed in accordance with the 1981 Plan (System of Material Balances) Couldn’t predict amounts needed- some places got too much of the product; some got too little East German Ostmark practically worthless Prices kept constant by heavy subsidies from the government (80% of the cost of basic supplies) East Germany- Economy After reunification… High demand for West German products (seen as better quality)- decline in domestic consumption of Eastern products Decline in output of manufacturing construction sectors- strain on the East German economy Standard of living in the GDR rose from 50.1% of that in the west (1990) to 71% (1993) Similar-looking economy to West Germany (same types of product, emphasis on exportation), but totally different system First phase of unification: West Germ