Country profile: Germany

Germany has one of the largest economies in the world, with a 2005 nominal gross domestic product (GDP) of $2.8 trillion. In recent years, economic growth has resumed, after GDP contracted by 0.2 percent in 2003. However, high unemployment and sluggish domestic demand continue to dampen economic growth. Owning to its large economy, Germany is one of the world’s largest energy consumers. In 2004, the country consumed 14.7 quadrillion British Thermal Units (Btu) of total energy, the fifth-largest amount in the world.

Besides coal, Germany does not possess any sizable hydrocarbon reserves, so the country must rely upon imports to meet the majority of its energy needs. The lack of domestic hydrocarbon resources has led Germany to become a world leader in the development of renewable energy technologies, with the country becoming the world’s largest producer of biodiesel and generator of electricity from wind.

As Europe's largest economy and second most populous nation, Germany is a key member of the continent's economic, political, and defense organizations. European power struggles immersed Germany 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. In January 1999, Germany and 10 other EU countries introduced a common European exchange currency, the euro.