Germany Travel Information

Photo As Europe's largest economy and most populous nation, Germany remains a key member of the continent's economic, political, and defense organizations. European power struggles immersed the country in two devastating World Wars in the first half of the 20th century and left the country occupied by the victorious Allied powers of the US, UK, France, and the Soviet Union in 1945. With the advent of the Cold War, two German states were formed in 1949: the western Federal Republic of Germany (FRG) and the eastern German Democratic Republic (GDR). The democratic FRG embedded itself in key Western economic and security organizations, the EC, which became the EU, and NATO, while the communist GDR was on the front line of the Soviet-led Warsaw Pact. The decline of the USSR and the end of the Cold War allowed for German unification in 1990. Since then Germany has expended considerable funds to bring eastern productivity and wages up to western standards.

Most inhabitants of Germany are ethnic German. There are, however, more than 7 million foreign residents. Germany is a prime destination for political and economic refugees from many developing countries. An ethnic Danish minority lives in the north, and a small Slavic minority known as the Sorbs lives in eastern Germany.

Germany has one of the world's highest levels of education, technological development, and economic productivity. Since the end of World War II, the number of youths entering universities has more than tripled, and the trade and technical schools of the Federal Republic of Germany (FRG) are among the world's best. With a per capita income level of more than $22,900, Germany is a broadly middle class society. A generous social welfare system provides for universal medical care, unemployment compensation, and other social needs. Millions of Germans travel abroad each year.

During the summer of 1989, rapid changes took place in the GDR. Hungary ended its border restrictions with Austria, and a growing flood of East Germans began to take advantage of this route to West Germany. The exodus generated demands within the GDR for political change, and mass demonstrations in several cities--particularly in Leipzig--continued to grow.

On October 18, Erich Honecker resigned and was replaced by Egon Krenz. Finally, on November 9, the GDR allowed East Germans to travel freely. Thousands poured through the Berlin Wall into the western sectors of Berlin. The Wall was opened. On November 28, FRG Chancellor Kohl outlined a 10-point plan for the peaceful unification of the two Germanys. In December, the GDR Volkskammer eliminated the SED's monopoly on power. The SED changed its name to the Party of Democratic Socialism (PDS), and numerous political groups and parties formed. The communist system had been eliminated. A new Prime Minister, Hans Modrow, headed a caretaker government that shared power with the new, democratically oriented parties.

In early February 1990, Chancellor Kohl rejected the Modrow government's proposal for a unified, neutral Germany. Kohl affirmed that a unified Germany must be a member of NATO. Finally, on March 18, the first free elections were held in the GDR, and Lothar de Maiziere (CDU) formed a government under a policy of expeditious unification with the FRG. The freely elected representatives of the Volkskammer held their first session on April 5, and the GDR peacefully evolved from a communist to a democratically elected government.

Germany is the world's third-largest economy and the largest in Europe. Recent performance has not been dynamic, however, and the German economy is vulnerable to external shocks, domestic structural problems, and continued difficulties in integrating the formerly communist east.

From the 1948 currency reform until the early 1970s, West Germany experienced almost continuous economic expansion. Real GDP growth slowed down, and even declined, from the mid-1970s through the recession of the early 1980s. The economy then experienced 8 consecutive years of growth that ended with a downturn beginning in late 1992. Since unification, Germany has seen annual average real growth of only about 1.5% and stubbornly high unemployment. The best performance since unification was in 2000, when real growth reached 3.0%. Most forecasters expect growth of about 0.5% in 2002, while unemployment remains at an average of 9.1%.

Germans often describe their economic system as a "social market economy." The German Government provides an extensive array of social services. The state intervenes in the economy by providing subsidies to selected sectors and by owning some segments of the economy, while promoting competition and free enterprise. The government has restructured the railroad system on a corporate basis, privatized the national airline, and is privatizing telecommunications and postal services.

The German economy is heavily export-oriented, with exports accounting for over one-third of national output. As a result, exports traditionally have been a key element in German macroeconomic expansion. Germany is a strong advocate of closer European economic integration, and its economic and commercial policies are increasingly determined within the European Union (EU). Germany uses the common European currency, the Euro, and the European Central Bank sets monetary policy.

Eleven years after unification, Germany has made great progress in raising the standard of living in eastern Germany, introducing a market economy and improving its infrastructure. Eastern economic growth rates have been lower than in the west in recent years, unemployment is twice as high, prompting many skilled easterners to seek work in the west, and productivity continues to lag. Eastern consumption levels are dependent on public net financial transfers from west to east totaling about $65 billion per year, or more than 4% of the GDP of western Germany. In addition to social assistance payments, the government plans to extend funds to promote eastern economic development through 2019.

The United States is Germany's second largest trading partner, and U.S.-German trade has continued to grow strongly. Two-way trade in goods and services totaled $88 billion in 2001. U.S. exports to Germany were $30.1 billion while U.S. imports from Germany were twice as high, $59.2 billion. At $29.1 billion, the United States' fifth largest trade deficit is with Germany. Major U.S. export categories include aircraft, electrical equipment, telecommunications equipment, data processing equipment, and motor vehicles and parts. German export sales are concentrated in motor vehicles, machinery, chemicals, and heavy electrical equipment. Much bilateral trade is intra-industry or intra-firm.

Germany has a liberal foreign investment policy. From 1997 to 2000, annual average flows of U.S. direct investment in Germany were $3.4 billion, while those of German investors in the United States reached $22.2 billion. U.S. firms employ about 800,000 people in Germany; German firms likewise employ about 800,000 people in the United States.

Despite persistence of structural rigidities in the labor market and extensive government regulation, the economy remains strong and internationally competitive. Although production costs are very high, Germany is still an export powerhouse. Additionally, Germany is strategically placed to take advantage of the rapidly growing central European countries. The current government has addressed some of the country's structural problems, with important tax, social security, and financial sector reforms.

Important: Travel to Germany may require a travel visa. Whether a visa is required for travel depends on citizenship and purpose of journey. Please be sure to review Travisa's Germany visa instructions for details. Visa instructions for other countries are available on our do I need a visa page.

Country Statistics

Full country name: Federal Republic of Germany
Capital city: Berlin
Area: 357,022 sq km
Population: 81,305,856
Ethnic groups: German 91.5%, Turkish 2.4%, other 6.1%
Languages: German
Religions: Protestant 34%, Roman Catholic 34%, Muslim 3.7%, unaffiliated or other 28.3%
Government: federal republic
Chief of State: President Joachim GAUCK
Head of Government: Chancellor Angela MERKEL
GDP: 3.114 trillion
GDP per captia: 38,100
Annual growth rate: 3.1%
Inflation: 2.5%
Agriculture: potatoes, wheat, barley, sugar beets, fruit, cabbages
Major industries: among the world's largest and most technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, textiles
Natural resources: coal, lignite, natural gas, iron ore, copper, nickel, uranium, potash, salt, construction materials, timber, arable land
Location: Central Europe, bordering the Baltic Sea and the North Sea, between the Netherlands and Poland, south of Denmark
Trade Partners - exports: France 9.4%, US 6.8%, Netherlands 6.6%, UK 6.2%, Italy 6.2%, China 5.7%, Austria 5.5%, Belgium 4.7%, Switzerland 4.4%
Trade Partners - imports: China 9.7%, Netherlands 8.4%, France 7.6%, US 5.7%, Italy 5.2%, UK 4.7%, Belgium 4.2%, Austria 4.1%, Switzerland 4.1%