(Last updated: 21 Mar 2012)

Current business situation

The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to Germany. This is regularly updated, and should be checked before planning travel.

Country facts

(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)

Economic climate

Germany is the world's fourth biggest economy and largest exporter. It is a major economy within European Union, which continues to develop greater integration between member states and openness to external trade.

Manufacturing is the core of the Germany economy with the export sector dominated by autos and machinery. New sectors such as IT, biotechnology and renewable energy are growing markedly. Agriculture represents only one per cent of GDP.

Due to events in the global financial sector, Germany’s GDP growth has eased. However, this remains higher than the average of the preceding five years. Germany has good economic resilience due to strong export performance, industrial production and investment in machinery and equipment.

Germany is decentralised, with the three largest cities housing less than 10 per cent of the national population. The 16 states of the Federal Republic hold much of the executive power of government and in turn responsibility for economic development.

Some of the key economic centres are Frankfurt, Hamburg, Munich, Berlin, Stuttgart, Düsseldorf, Cologne and the Ruhr region.

For the latest key economic indicators and statistics, please see the Department of Foreign Affairs and Trade country economic fact sheet.

Political climate

Germany is a strong consensual and stable democracy which has been consolidated over the last six decades. Germany occupies a strong, and increasingly influential, voice within the European Union.

Germany is a Federal Republic. The Federal Government, based in Berlin, consists of the Federal Chancellor and the Cabinet of Federal Ministers. Federal elections are held every four years. In addition, there are 16 state governments and thousands of local government 'communes'. Each state has its own constitution and a state parliament. State elections are held every four or five years.

The federal legislative authority is the Bundestag whose members are elected through a combination of direct election and proportional representation.

Following each federal election, the Bundestag elects a Chancellor by absolute majority. Dr Angela Merkel was re-elected as Chancellor for a second term on 28 October 2009, following the federal election on 27 September.

The Bundesrat represents the 16 state governments and has 69 seats. Based on population size, a state has between three and six votes. The Bundesrat debates all legislation, but only approves legislation affecting state responsibilities (eg. tax revenue distribution).

The Federal President, who has ceremonial duties, is elected every five years by the Bundesversammlung (Federal Assembly), a body comprising all Bundestag members plus an equal number of state representatives. Presidents can serve up to two terms.

Germany has five major political parties: the Christian Democratic Union (CDU), including the Christian Social Union, the CDU’s sister party; the Social Democratic Party (SPD); the Free Democratic Party (FDP); the Green Party; and the Left Party.

The German federal election was held on 27 September 2009. The CDU secured the highest percentage of the votes (33.8 per cent), followed by the SPD (22.9 per cent), FDP (14.6 per cent), the Left Party (12 per cent), and the Greens (10.7 per cent).

The CDU and FDP have agreed to form a coalition government (with 332 seats out of a total of 622 in the Bundestag). The new German Cabinet was sworn in on 28 October 2009. The next federal election is expected in September 2013.

Trade relations and statistics

As the largest single unit in the European Union (EU), and with the EU as its principal economic partner, Germany continues to be a strong proponent of closer European integration. Germany is also a major player in trade with central and eastern Europe.

As the largest single member of the European Union (EU) and the Eurozone (the 15 member states that utilise the Euro as their common currency) Germany is a strong proponent of European integration. Germany is consequently also a major player in trade and investment other non-EU eastern European states and Russia.

Germany's exports of services are relatively underdeveloped and reform in the services sectors is relatively slow. New sectors, however, such as IT, biotechnology and renewable energy are growing markedly. Agriculture accounts for only one per cent of GDP.

Source: Department of Foreign Affairs and Trade - country brief for key trade statistics.