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.