The German Economy and East-Central Europe: The Development of Intra-Industry Trade from Ostpolitik to the Present

Abstract

Over the past decade Germany has had one of the most successfuleconomies in the developed world. Despite the ongoing Euro crisis unemploymenthas fallen below 7 percent, reaching its lowest levels since Germanreunification in 1990. Germany’s youth unemployment is among thelowest in Europe, far beneath the European average.1 One of the mostimportant engines of the German economy today, and in fact throughoutthe twentieth and twenty-first centuries, has been its export sector. As LudwigErhard, West Germany’s Economics Minister during the Wirtschaftswunderof the 1950s remarked: “foreign trade is quite simply the core andpremise of our economic and social order.”2 According to various estimates,today exports and imports of goods and services account for nearly a half ofGerman GDP—up from only a quarter in 1990. Germany is one of only threeeconomies that do over a trillion dollars worth of exports a year, the othertwo being the United States and China.