Business Proposition in Germany
Table of Contents
1. Country Background
2. Business Proposition
3.2 Biomass Fuels
3.3 Level and Stability of Return on Investments
1. Country Background
As Europe’s largest economy and second most populous national (after Russia), Germany is a key member of the continent’s economic, political, and defense organizations. In the early 1900s, European power struggles immersed Germany into two devastating World Wars in the first half of the 20th century and left the country occupied by the Allied forces which consisted of the United States, United Kingdom, and the Soviet Union (USSR) 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 European Union down the road, 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 par with its counterparts in the West’s standards (CIA.gov).
Germany is located in Central Europe, bordering the Baltic Sea and the North Sea with a territorial size of about 357,022 square kilometers, with about 2,389 kilometers of coastline. Overall, Germany is slightly smaller than the state of Montana. It shares borders with Austria, Belgium, Czech Republic, Denmark, France, Luxembourg, Netherlands, Poland, and Switzerland (Cia.gov).
Germany’ population consists of 81,147,265 people, in which ethnic groups comprising of: 91.5% German, 2.4% Turkish, and 6.1% made up of Greek, Italian, Polish, Russian, Serbo-Croatian, and Spanish. Major religions are Protestant, Roman Catholic, and Islam (CIA.gov).
Germany, also known as the Federal Republic of Germany, has a government system of Federal Republic, which consists of a federation of states with a republican form of government. In Germany’s case, the republic consists of 16 states spread out throughout the country and governed by a civil law legal system. The political system is Germany is headed by an Executive Branch, Legislative Branch, and Judicial Branch, very similar to the United States. The Executive branch consists of the chief of state, who is President Joachim Gauck (since March 23, 2012), head of government Chancellor Angela Merkel (since November 22, 2005) and a cabinet, or Bundesminister (Federal Ministers), appointed by the president on the recommendation of the chancellor. There are several notable political parties throughout Germany’s government, most notably the Christian Democratic Union (CDU) and the Christian Social Union (CSU), both of which hold 33.8% of the political vote. The Social Democratic Party (SPD) and the Free Democratic Party is also noteworthy as they hold 23% and 14.6% of the vote respectively (CIA.gov).
Germany has a social market economy, which is characterized as a form of market capitalism combined with a social policy favoring union bargaining and social insurance for its people. In Germany’s case, the social market contains central elements of a free market economy such as private property, free foreign trade, and exchange of goods. In contrast to the situation in a free market economy, the state is not passive and actively implements regulative measure, such as pension insurance, universal health care and unemployment insurance. The currency currently in use is the EURO and it is freely exchanged. The German economy is the fourth largest economy in the world in terms of a GNI (Gross National Income) at $3.6 trillion dollars and fifth largest in terms of GDP-per capita