blog 12-unemployment

Unemployment drops sharply in April

In another sign of recovery in Europe's biggest economy, figures published Thursday showed the German unemployment dropped sharply in April to 8.1 percent of the workforce from 8.5 percent in March. There was an unexplectedly strong springtime upturn on the labour market in April. The current trend is encouraging. This was said by the head of the Federal Labour Agency Frank-Jurgen Weise. The seasonally- adjusted rate fell for the fifth straight month and posted its sharpest drop since early 2008 to 7.8 percent, Capital Economics senior European economist Jennifer McKeown noted.

ING senior economist Casten Brzeski commented the " the harsh winter, the Greek crisis, they have all left the German labour market unperturbed." He put the improvement down to "active labour market policies," including the government's short work programme that lets companies cut workers' hours, a scheme that is to be extended until March 2012.

Trouble spots nonethless remained in formely communist areas of eastern Germany, and the highest unemployment, at 14.2 percent, recorded in Berlin. In the northeastern state of Mechlenburg-Western Pomerania, unemployment was also strong at 13.4 percent, though it had fallen from 14.6 in March 2009. Around 3.4 million people were looking for work in all, or 162,000 fewer than in the previous month, the labour agency said. On a seasonally-adjusted basis, the number declined by 68,000 to its lowest rate since December 2008.


I cannot believe that an economy as big as Germany's can fall this bad. I can only imagine what will be the end for our country. I found this article to be very interesting considering the world is in a tailspin right now. What will help us out? Find out next week

blog 11-Industrial Revolution

The industrial Revolution began about a century later in Germany than it did in England. Germany did not exist as a political unit until the later part of the nineteenth century. First came the Toll Union in 1833, that making tolls between the various German principalities, made Germany into a common marker. For a period of decades, until about 1860s, there were attemps at copying the industrialization that had taken place elsewhere in Europe. The copying was only moderately successful. In 1870 the modern German nation was created and thereafter major industries were founded that led to the full fleged industrialzation of Germany.

A rail system for Germany developed rapidly under the promotion of the German state governments. The rail system increased the demand for steel and coal. The coalfields in the Ruhr Valley were fully developed and made Germany the froemost coal producer in Europe.

Blog 10

IKB Considers Suing Goldman Sachs for fraud!! German lender IKB said Wednesday it is considering suing US giant Goldman Sachs after losing 150 million in a fund that is subject of fraud charges in the United States. Germany's state development bank of KfW , which bailed out IKB with billions of euros when it became the first majority casualty of the global financial crisis, was also looking into legal action, a KfW spokesman said. The SEC accused Goldman Sachs of "defrauding investors by misstracting and omitting key factors" about a product based on sub-prime, or higher-risk mortgage-backed securities. The company was vigorously denied any wrongdoing and sought to defend its reputation as Wall Street's most stable finance house.

Meanwhile, Germany's financial regulator Bafin has requested further information from the SEC on its investigation. Britian's Financial Services Authority(FSA) watchdog on Tuesday launched a probe into the US investment bank after Prime Minister Gordon Brown accused it of "moral bankruptcy"

According to business daily Handelsblatt, some members of Chancellor Angela Merkel's ruling coalition are considering a freeze on Germany's financial ties with Goldman Sachs.

Recent Economy

This week I will be talking about Germany and their recent economic. Germany faces significant demographic challenges to sustained long-term growth. Low fertility rates and declining net immigrationg are increasing pressure on the country's social welfare system and necessitate structural reforms. The modernization and integration of the eastern German economy- where unemployment can exceed 20% and this may continue to be a costly long-term process, with annual transfers from west to east amounting in 2008 alone to be roughy $12 billion. Reforms launched by the government of Chancellor Gerhard Schroeder (1998-2005), deemed necessary to address chronically high unemployment, which in 2008 reached a new post-reunification low of 7.8%. These advances, as well as a government subsidzed, reduced working hour scheme, have helped to explain the relatively modest increase in unemployment during Germany's 2008-09 recession- the deepest since World War II. GDP grew just over 1% in 2008 and contracted roughly 5% in 2009. Germany crept out of the recession in the second and third quarters of 2009, thanks largely to rebounding manufacturing orders and exports- primarily outside the Euro Zone- and relatively steady consumer demand. The Germany economy probably will recove to about 1.5% growth for the year 2010.However, the relatively strong euro, tighter credit markets, and an anticipated bumb in unemployment could cloud Germany's medium-term recovery prospects. Stimulus and stabilzation efforts initiated in 2008 and 2009 and tax cuts introduced in Chancellor Angela Merkel's second term will increase Germany's record budget deficit, which is expected to exceed 5% of GDP in 2010. The EU have given Germany until 2013 to get its consolidated budget deficit below 3% of GDP. A new constitutional amendmant likewise limits the federal government to structural defictis of no more than 0.35% of GDP per annum as of 2016.

Stock Market

The Frankfurt Stock Exchange is one of the biggest and most efficient exchange places in the world. It is owned and operated by Deutsche Borse, which also owns the European futures exchange and clearing company Clearstream.

The Frankfurt Stock Exchange has over 90 percent of turnover in the Germany market and a big share in the European market. Here the Frankfurt Stock Exchange floor trading loses, but in fast developing and expanding electronic trading( Xetra trading system) the FSE gains in European and international trade: partner-exchanges adopted the Xetra(trading system) Mainly through Xetra, the German stock market has been opened to foreign investors and market participants. About 47% of the 300 market participants in Frankfurt come from abroad.

The orgins of the Franfurt Stock Exchange go back to the 9th century and a free letter by Emperor Louis the German to hold free trade fairs. By the 16th century Frankfurt developed into a wealthy and busy city with an economy based on trade and financial services. In 1585 a bourse was established to set up fixed currency exchange rates. During the following centuries Frankfurt developed into one of the world's first stock exchanges- next to London and Paris. Bankers like Mayer Amshel Rothschild and Max Warburg had substantial influence on Frankfurt's financial trade.

Foreign Development

Germany has played a leading role in the European Union and has maintained a stong alliance with France since the end of World War II. The alliance was especially close in the last 1980s and early 1990s under the leadership of Christian Democrat, Helmut Kohl and Socialist Francois Mitterrand. Germany is at the forefront of European states seeking to advance the creation of a more unified Euopean poilitical, defence and security.

For a number of decades after WWII, the federal Republic of Germany kept a low porfile in international relations, because of both its recent history and its occupation by foreign powers.

Germany is a founding member of the EEC in 1957, which became the European Union in 1993. It maintains close relations with its neighbors to coordinate EU politics.

In 1999, Chancellor Gerhard Schroder's government defined a new basis for German goreign policy by taking a full part in the decisions surrounding the NATO war against Yugoslavia and by sending German troops into combat for the first time since World War II.

The governments of Germany and the United States are clost political allies. The 1948 Marshall Plan, U.S. support during the rebuilding process after World War II, as well as War children, and the strong cultural ties have crafted bond between the two countries, although Shroder's very vocal oppositing to the Iraq War suggested the end of Atlanticism and a relative cooling of German-American relations.

Unemployment in 2009

Germany was now hitting an ending trail. Their unemployment rate has now jumped to a total of 8.3 percent. This is the third straight rise and biggest increase in nearly four years as the fallout from the global slowdown hits Europe's biggest economy.

The numbers are now becoming more dramatic with each passing day. This past december economists said that the unemployment rate rising so much put 18,000 people out of work. They are now estimating that an additional 30,000 would be out of work by 2010.

Last year, the numbers reached a solid 40.3 million last year to reach the highest level since the German unification in 1990. This was when the government stepped in and tried to change the labour market by making getting a job more available.

Economists believe things won't look up until things get worse then they are. They believe that the unemployment rate will drop more then it did at the end of World War 2.