The emergence of Germany as Western Europe’s central economy Topic 3.2.
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Alemana tenía que estar *. Debería ser penalizado, y a afectado a todo los otros. Cuando se encontraron, la política era de recuperación: 1947. Pero se he multiplicado por 10, y ha amenacé a todos EEUU incluido. No saben cómo resolver la caída del USD, la economía alemana se convertí en economía central europea. 1970- Hay políticas que lucha mejor contra la inflación y emerge otro elemente que acentúe a la credibilidad de la economía alemana. La DDR amplía sus frontera al caído del ‘’ mur deB
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• Seguridad territorial: Francia ocupado 3 veces desde 1870.
• Seguridad militaría: re-militarización de Alemana
• Alemana cómo puede producir tanta que Francia: problema económica Solo Alemana pude parar a USSR. Los EEUU, quieren reconstruir los bases EEUU, tienen bases militares en todo Europa. El pueblo alemán es responsable de los crimen Nazi deben ser punido: (ocupación, división) -
1936 –Ultima ano normal
o 1938–solo podían producir el 10% de producción : no maquina disponible
1939- 1era salta colectivo: no podía afecta, invertir.
1941- se rompe todo
o 1947- 1/3 de la producción
o Los alemanes son sub alimentos: espectacular cantidad de muertos. Hubido seguido así si no habría tenío la crisis de pagos. Mal diseños de la políticas noramenricana, problemas internacionales.
o Mayo 1947 decisión que alemana tenía que producir. Ellos empesan a producir igual a los EEUU -
• Defeat and punishment!
– Occupation, division and neutralisation
– Morgenthau Plan (Sept. 1944) avoid any future industrial renaissance
(Germany is our problem)
• Occupation policies designed to punish
– The country completely dislocated, though productive capacity larger in 1945
than in 1939 • Unproductive occupation
– March ‘46 Level of Industry Plan:
• Limits to industrial production = ½ 1938
– But only 10% of 1936 level for machinery and machine tools
• Level of industrial production -
Unproductive occupation
– March ‘46 Level of Industry Plan:
• Limits to industrial production = ½ 1938
– But only 10% of 1936 level for machinery and machine tools
• Level of industrial production in 1947 = ⅓ 1938
– Agricultural production
• 1946-47 = 70% prewar level
• 1947-48 = 58% prewar level
• Such a policy appeared soon to be detrimental to everybody lack of
recovery in Germany put the whole word economy out of balance -
– Productive normalisation (1951)
– Political normalisation (FRG May’49; first gov. Sep.‘49)
• German normalisation meant a menace for France
– Territorial security:
• Three violations since 1870
– Military security
• Possible re-militarisation of Germany
– Economic security
• A more competitive economy
• After summer 1947, industrial output in Germany always
above legal targets, by 1950 surpassed French levels
(despite French privileged access to German resources) -
– Territorial occupation
– Maintaining direct controls on
German resources
–Suspending German direct controls
on their own – German – resources -
o ROBER SCHUMAN : declaración. Transferencia de soberanía, pero qui pierde sobrenadad ¿ Alemana gaña a soberanía y la Francia gagna en pode sobre la alemana. Jean Monet : eligió para el general de Gaule para llevar a cabo el plano del primero plan economía Francesa 1944.
Tratado de paz con Francia
Mas sobreanidad para los dos. -
• Ocupacion pero no es viable. (USA, Franca, no funciona)
• Control de Alemana con mecanismo de control
• Francia inventa a la supranacionalidad, alto autoridad commun del CECA : no reduce la importancia a la supranacionalidad. Soluciona problemas por una via nueva. -
- Defeat and punishment! (1945-47) ERP
- Quick recovery after the division of Germany required a peace settlement with France ECSC A long road from defeat and occupation to ruling them all
- The German economy occupied a central position in WE trade system in the 1950s OEEC/EPU
- The FRG accepted the Europeanisation of the German economy after mid-1950s EEC
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- The FRG put its monetary policy prestige to the service of WE after 1979 EMS
- DDR fusion into the FRG changed completely the terms of the game! Maastricht Treaty (€)
- Germany the sick man of Europe (2000s)
- Since 2010 a leader without leading vocation!
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Export sectors in all WE countries propelled by
German demand (PPT 9/24)... in much greater extent than demand elsewhere (10/24)
Furthermore, the German market acted as
stabiliser when other markets declined Exports to FRG, important in GDP terms (Net 5.5%) -11/24 -
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• Hardening of the EPU credit conditions Proportion of gold/credit
– 1950-52: Ratio 40% to 60% (persistent debtors were bailed out with
direct aid from the U.S.: Greece, Turkey, and Austria)
– 1952-54 (EPU extended two more years): 50/50%
– August 1955 (EMA), 75% gold/25% credit but annual extension
• Lesser benevolence towards debtors -
Germany in the EPU/OEEC
Wanted to move toward convertibility but
ended up appreciating the cohesiveness
of the European trade bloc.
Not necessarily at any cost:
a) Hardening of credit conditions in exchange
for resisting British attacks on EPU
b) Continuation of trade liberalisation
c) European Monetary Agreement of 1955 -
- The FRG-WE relationship (so beneficial for all) was based on temporary concessions by the U.S. which by definition had to be abandoned
- The German economy was and desired to become again a world (not a European) economy • Germany determined to declare the convertibility of the DM end of cooperation in WE!
- Politicians in WE believed that their growth (social cohesion & political stability) depended to a large extent on trade with Germany.
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The ERP-financed OEEC/EPU helped to recover
intra-European trade volumes very quickly
Lack of intra-
European trade had to
WWII be compensated by
i t imports from the $
area when WE’s
largest scarcity lied in
its dollar reserves! -
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• Protection in common and common
external trade policy
– Liberal minded?
– End to tariff disparity, but low/high tariff levels?
– How to reduce them?
• A High Authority (taken from the ECSC)
with an ad hoc mandate to lower protection
according to a pre-negotiated timetable
– Tariff and non-tariff protection
– Irreversible? (exceptions managed in common) -
– Scandinavia & UK: fierce competition for German paper, non-ferrous
metals and products industrial sectors
– Large industrial economies (France and Italy) remained protected behind
high tariff walls which could be very much reduced
• Given the political decision, Erhard imposed:
– Automatic and irreversible process of tariff reduction
– Parallel movement toward convertibility (price control) (1955 EMA)
– Compatibility between the European c.u. and GATT
• The FRG accepts the Europeanization Germ -
• Initial political pros (Adenauer)
– European integration is good political business
– If limited to the Six, easier negotiations
• Initial economic cons (Erhard)
– Any European c.u. is limitative (more so if reduced to the Six)
– Open opposition to any social harmonization
• Final decision determined by the German industry’s views:
– Markets outside Europe are unstable, stability is within WEurope
(investment decisions require stable outlets) -
• Only interest was atomic energy: symbol of modernisation and
grandeur
– Frustration by Eisenhower’s Atoms for Peace’s transatlantic
cooperation
– Bonn accepted negotiating Euratom in exchange for Paris
negotiating the customs union among the Six
• Further trade liberalisation was not welcome, but which
were the alternatives?
– Autarky? // OEEC? France recorded the worst performance!
// BWS? // European federation?
– Controlled liberalisation!
• If defined according to Frenc -
• Social harmonization
– Higher wages & SS costs than FRG
– Paid holidays & shorter week hours than FRG (40h. vs. 48h.)
– No gender discrimination as in FRG (vs. 60-65% fem./masc.)
• … or limit the irreversibility principle
– Impossible given German opposition but De Gaulle found
the way to blackmail the Community in 1964/65. -
Find satisfactory solutions to the following matters …
• National industrial policies no common industrial policy
• Priority in establishing a CAP starting in 1962
• Special relations with former French colonies Yes! (future
problems with USA & UK)
• A less-supranational institutional system than the ECSC
Commission (not High Authority) and Council of Ministers
• Social harmonization
– Higher wages & SS costs than FRG
– Paid holidays & shorter week hours than FRG (40h. vs. 48h.)
– No gen -
Because of the socialf
France
pact component of
the national
reconstruction
policies!
Risk of convergence
toward the highest
wage levels to be
determined by the
weakest government! -
Great dependence on foreign trade and very
competitive across the board
Chronic deficit in trade balance from 1946 to 1957
• Great frustration with previous trade-liberalisation
formulas
– Discriminatory for low-tariff countries
– Not effective in agricultural trade (including the Benelux
arrangements). -
Norteamericanos han hecho que esto funciones, crecimiento europea funciona por la discriminación de la USD. Libro: Germany’s comeback in the world market –Ludwig Erhad
1) Discriminar a los EEUU de manera legal
2) Alemana debe persuadir que va a funcionar
3) Manera de discriminar a los EEUU selo BW
a. Custum unión
b. Free trade área -
Los Holandés encontraron a la solución: tiene la capacidad de elegir a mecanismos: déficit comercial balancea más grande. Convertibilidad: unión moneda – acorde técnico. Alemán quieren un mercado abierto: Alemana conquistan a todo los mercado exótico. Una vez que están entrado en mercado- Francia, etc., es irreversible.
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• Why did they receive
attention in 1954?
– Renewal of EPU
• Convertibility of £,
DM & Bf on the
table
• End of intra-
European trade
liberalization on
OEEC lines -
How can discrimination be made legal
and permanent? • Three legal exceptions to the BW’s nondiscrimination
principle
– Customs union (under a series of conditions)
– Free-trade area (under a series of conditions)
– Special waiver
How can discrimination be made
attractive to Germany? It should encompass large markets, be liberalminded
and move toward BWS with credibility -
Tratado de roma: Bélgica no quería una armonización de los salarios: política social común, Francia sí. Alemán no quiere. Alemana tiene miedo que los sindicados afectan al salario.
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European Economic Community (& Euratom)
pre-establish
timetabl:Progressi e remo al of internal tariffs
ahed – Progressive removal – Continuation of quotas’ removal (OEEC)– Progressive establishment of a common tariff – De-liberalization outlawed
– Progressive creation of a common commercial policy
– Progressive removal of all restrictions to the free
movement of goods, services, capital and labor which will not materialized until the 1990s.
– Adoption of CAP special treatment for agricultu -
• ERP (1947) split the continent into West and East
• The Treaties of Rome (1957) split the OEEC into
– The Six (EEC – March 1957)
– The Seven (EFTA – Jan 1960)
– The Left Overs - Finland, Greece, Iceland and Turkey
•Turkey and Greece associated with EEC
•Finland and Iceland with EFTA
• At first, EFTA and EEC competed in their respective
liberalization processes
• In the 1970s, a large west European-wide industrial
free-trade area was generated
• In the 2000s,the EU re-established a common Es-We -
Find a way to make permanent both discrimination
towards the $ area and the locking of the FRG into a
western European block
– Provide stability to the perceived sources of growth, and
– Abort a sudden enforcement of the BW system! -
• The roots of the EEC Treaty of Rome are in the nature
of intra-European trade vigour
• The importance of intra-European trade to sustain
growth, social cohesion and political stability
• The growth of intra-European trade was carried out on
the edge of provisional agreements that could be
suspended almost at any time
• Trade with Germany was crucial for all but FRG aimed
to return on to the world markets!
![11Exports to FRG, important in GDP termsAlan S. Milward, The European Rescue of the Nation-State, London [Routledge] 1992, p. 139.Relative importance of ERP aid and experts to FRG](https://s3.amazonaws.com/s3.timetoast.com/public/uploads/photo/7443450/image/edae68321ebc990590ac43e807605fc6?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=AKIAJB6ZCNNAN7BE7WDQ%2F20251031%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20251031T102428Z&X-Amz-Expires=604800&X-Amz-SignedHeaders=host&X-Amz-Signature=e3e66e1ac677a07dc4e6b90fd10e398d8f7c5de2620f4c77b4fddb317274e8b9)
