***This is a International Fin
***This is a International Finance Course***
Country Analysis (Germany): Essay
Prepare a Word Document of the General background informationregarding the country selected (Germany) (e.g.risk elements, withmore emphasis on recent events).
In a minimum of 500 words, be sure to include the following:
1. Regional transactions exposure and approach.
2. Regional translation exposure and approach; and
3. Regional operating exposure and other descriptive events orinformation.
Answer:
ECONOMICAL ASPECT OF THECOUNTRY:
The German economy the 5th largesteconomy in the world and Europe’s largest. Is a leading exporter ofmachinery, vehicles, chemicals, and household equipment andbenefits from highly skilled labour force.
Embarking on modernization andintegration of Eastern German economy-where unemployment can exceed20% in some municipalities-continues to be costly long-term processwith annual transfers from the west to east amounting in 2008 toroughly $12 billion.
Reform launched by Government ofChancellor Gerhard Schroeder(1998-2005).
Addressing chronically highunemployment and low average growth.
Which resulted to strong growth andfalling unemployment in 2006-07.
New post-reunification ofunemployment low to 7.8%.
Reducing working hour scheme.
Chancellor Angela Merkel biggestchallenge was to fight with reccession.
Modest increase in unemploymentduring recession(2008-09) healthy decrease in 2010. Recovering wellas GDP contracted nearly 5% in 2009 but grew by 3.3%.
Germany manage to creap out ofrecession largely to rebounding manufacturing orders andexports-primarily outside the euro-zone
Stimulus and stabilization effortsinitiated in 2008 and 2009 and tax cuts
Results second term increasedGermany’s Budget deficit to 3.3% in 2009 and to 3.6% in 2010
The economy follows free marketprinciples with a significant degree of government regulation andgenerous social welfare programs and protections. The state plays arole in the economy, providing subsidies to certain sectors and byretaining ownership of some segments of the economy, whilepromoting competition and free enterprise.
Economic life in Germany is moreinternational in nature than in most other major industrialnations. One in three euros in Germany is generated throughexports; nearly one in four jobs depends on exports.
CurrentScenerio:
GDP (2010 nom.): $3.339trillion.
Annual growth rate: (2010 est.)3.5%; (2009) – 4.7%; (2008) 1.7%.
Per capita GDP (2010 nom.):$44,660.
Inflation rate (December 2010):1.6%.
Unemployment rate (October 2010):7.5%.
Agriculture (0.9% of GDP in2010):
Products-corn, wheat, potatoes,sugar, beets, barley, hops, viticulture, forestry, fisheries.
Industry (26.8% of GDP in 2010):
Types-car-making; mechanical,electrical, and precision engineering; chemicals; environmentaltechnology; optics; medical technology; biotech and geneticengineering; nanotechnology; aerospace; logistics.
Trade (2009): Exports-$1.124trillion: chemicals, motor vehicles, iron and steel products,manufactured goods, electrical products.
Major markets (2009)-France,Netherlands, U.S. Imports–$937 billion: food, petroleum products,manufactured goods, electrical products, motor vehicles, apparel.Major suppliers-Netherlands, China, France.
Resources
Germany has 107 cu km of renewable water resources, of which 86%are used for industrial purposes.
Germany relies principally on fossil fuels as sources ofenergy.
40% energy consumption – petroleum
30% consumption -domestic coal deposits.
17% consumption – natural gas
10% consumption – nuclear energy
Other sources of energy, such as hydroelectric, solar, orwind-powered electric power plants, are relativelyinsignificant.
Most production is in private hands.
Environment current issues:
Emissions from coal-burning utilities and industries contributeto air pollution.
Acid rain resulting from sulfur dioxide emissions, is damagingforests.
Pollution in the Baltic Sea from raw sewage and industrialeffluents from rivers in eastern Germany; hazardous wastedisposal.
Still by 1994, 50% of Germany’s forests had been damaged by acidrain.
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