And Now.... GERMANY
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• After decades of Cold-War division, East and West Germans reunited in 1990: What new challenges did they face? • What role does Germany's economy play in the European Union? • Why does Germany favor NATO's expansion? • How might its policies influence tomorrow's world? Here's some background for your research into those questions.

Tourists quickly sense the energies that drive modern-day Berlin. It's a place to which political and business leaders — as well as students and artists — from around the world are constantly drawn. Indeed, one of its attractions is Berlin's own amazing history. Example: During the Cold War that followed World War II, Berlin was split into communist (Eastern) and democratic (Western) zones! The city was reunited — and restored as Germany's capital — in 1990. But the memory of that division is still alive….

Division, then unity. Shortly after World War II, a defeated Germany was split into two states (1949). Pressured by the USSR, East Germany formed a communist government with a "command economy." (Party leaders made all economic decisions.) And West Germany chose a federal republic with a "social market economy." Its Basic Law guaranteed human rights. And employers and unions in most industries cooperated in deciding wages, work goals, etc. By 1989, West Germany had the world's third biggest economy. East Germans lagged far behind and — as their government collapsed — they called for an end to Germany's division. By a 1990 Treaty of Unification, they finally became citizens of the Federal Republic of Germany — the democracy formed by West Germans in 1949. Reunion was joyful.... Challenging, too.

New challenges. For starters, the economies of the two former Germanys were not in "sync." Outdated factories in eastern Germany had to be razed. Other industries lost out to high-tech competitors from western Germany. And tens of thousands of workers were fired (a shock for those whose jobs had been guaranteed under communism). By 1998, Germany was spending $100 billion annually to provide new roads, communications technology, and other assets to its eastern region — a policy supported by a 5.5-percent income-tax surcharge. This heavy tax — and its use — are still in effect!
    Germany makes other tough choices, too. Take its membership in the 15-nation European Union: Germany's GDP equals one fourth of all 15 GDPs, combined, and it has had the soundest currency for years. So when the idea of having a new EU currency (the euro) arose, some Germans asked: Why abandon our Deutsche Mark? What if the euro loses value? Yet most realized that a single currency would help all EU economies, and the German government voted Yes.

And now.... It's no secret that Germany regrets its role in the last century's world wars. It has given over $60 billion in restitution to Holocaust survivors. It works hard to sustain friendly relations with France, Poland, Russia, and other nations that endured Nazi invasions. It supports struggling democracies in eastern Europe. Indeed, Germany was the No.1 trading partner of Poland, Hungary, and the Czech Republic, even before they joined the North Atlantic Treaty Organization (NATO) — a move it strongly supported. Why? Germans know that peace is best served when nations uphold human rights, have economic stability, and feel protected. As you research Germany, watch how it serves those goals....

Research Tip. The U.S. State Department prepares in-depth profiles of many nations, and they're available in both print and electronic formats. Ask your librarian about this title: "Background Note: Germany" (May 2002).