Germany Essay, Research Paper

We are a auto shaper with an involvement in making concern in Germany. We know that we have to make a batch of research before we take the dip and open a works in Germany. We & # 8217 ; ve researched the undermentioned subjects on Germany ; national context, function of economic geographics, the cultural environment, legal environment, legal environment, it & # 8217 ; s relationship with the United States, international trade, economic development and economic policies and schemes. This was a streneous undertaking nevertheless we arrived to the decision that it would be profitable to make concern in Germany.

Germany is the universe & # 8217 ; s 3rd largest economic system. While the German economic system

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presently is sing high unemployment and slow growing, the state & # 8217 ; s

economic strength has been the topic of universe fame since the terminal of

World War II. Germany is one of the establishing members of the European

Union ( EU ) , a North Atlantic Treaty Alliance ( NATO ) member, and a

member of the Group of Seven ( G-7 ) industrialized states and the General

Agreement on Tariffs and Trade ( GATT ) /World Trade Organization ( WTO ) .

It joined the common European currency, the euro, on January 1, 1999, and

Frankfurt is the place of the European Central Bank.


Germany consumes about 2.9 million barrels per twenty-four hours of oil, about all

of which it imports, doing Germany the third-largest oil importer in the

universe. German oil imports come chiefly from ( in diminishing order of

magnitude ) Russia, Norway, the United Kingdom, and OPEC ( Libya, Saudi

Arabia, Nigeria, Algeria ) . German imports from Russia have remained

unchanged in recent old ages. However, OPEC & # 8217 ; s portion of German imports has

decreased, while the portion of North Sea oil from Norway and the United

Kingdom has increased. Germany produces about 61,000 bbl/d of petroleum

oil, much of which comes from the North Sea.

In Germany, about three-fourthss of the monetary value of gasolene is made up of

revenue enhancements, compared to around one-third in the United States. The pump monetary value

for gasolene is about three times higher in Germany than the United States.

Gasoline ingestion ( and overall oil ingestion ) have declined somewhat

since 1995. Between 1992 and 1997, the figure of German gasolene Stationss

decreased ( despite a rise in the figure of Stationss in the former East

Germany ) .

Under a jurisprudence which took consequence on April 15, 1998, Germany & # 8217 ; s strategic oil

stock list bureau EBV is required to keep a 90-day exigency reserve of

oil, up from 80 yearss antecedently. In late August 1999, the German authorities

planned to offer a stamp for over 31 million barrels of rancid petroleum oil in

response to increased petroleum monetary values. No farther action was reported on this

stamp as of October 1999.


Polishing costs more in Germany than other states in Europe, as Germany

levies eco-taxes. High costs have initiated a moving ridge of consolidation and some

closings. Overall refinement capacity has increased due to the gap of the Elf

Mider refinery in the former East Germany. The Elf Mider installation was the

foremost new refinery to be built in Europe in over a decennary.


Germany produces really small natural gas, and satisfies most of its demand

through imports. Almost tierce of Germany & # 8217 ; s gas imports come from

Russia. The other chief beginnings of imports are the Netherlands ( about 24 % )

and Norway ( about 20 % ) . Gas ingestion histories for approximately 20 % of entire

energy ingestion in Germany. This portion is expected to lift over the following

decennary, particularly for electric power coevals as atomic power is phased

out. Gas presently fuels merely approximately 10 % of German electricity.

Ruhrgas remains Germany & # 8217 ; s dominant natural gas transmittal company,

keeping 60 % of the German natural gas market. Old ages of Ruhrgas & # 8217 ; s

monopolistic control of Germany & # 8217 ; s gas market have left Germany with a

extremely developed gas substructure. Ruhrgas is presently involved in puting

pipes to link Poland to the German system in order to increase imports

of Russian gas via Poland, a undertaking that could be completed in late 2001.

Ruhrgas has besides bought stock in Russia & # 8217 ; s Gazprom, in an attempt to ease

closer dealingss between the two companies in expectancy of future additions

in German demand for gas.

Competition in the market has developed easy. Ruhrgas & # 8217 ; s chief rival,

Wingas, was formed in 1990 by a joint venture between BASF & # 8217 ; s Wintershall

and Russia & # 8217 ; s Gazprom. At the terminal of 1997, Wingas had become Germany & # 8217 ; s

sixth largest company. Now, with its ain domestic grapevines and links to

export supply lines, Wingas has gained market portion, while Ruhrgas & # 8217 ; s portion

has decreased. Wingas is in the 2nd phase of a grapevine building

undertaking that will link Russia & # 8217 ; s Yamal Peninsula to the German web,

which is expected to increase farther the Wingas market portion. The retail gas

market is expected to be to the full opened, leting consumer pick among

providers and trade names, in December 1999.

Germany is in the procedure of developing its first offshore gas field in the

North Sea. There are two reservoirs with over 450 billion three-dimensional pess plus

condensate, which will be connected to the German mainland via a new

grapevine. Gas is expected to get down traveling through the new grapevines in early

2000. The new grapevine will be built with extra capacity, in expectancy of

happening extra militias on the new path into Germany. The undertaking is

being undertaken by the Deutsches Nordseekonsortium ( German North Sea

Consortium ) , which is made up of Wintershall ( 40 % ) , BEB Erdgas und

Erdoel ( 40 % ) , BASF ( 12 % ) , and RWE-DEA ( 7 % ) , and it is being

coordinated by Wintershall.

German companies besides are involved in gas undertakings outside Germany. For

case, the German company Lurgi has signed a seven-year understanding with

state-owned Turkmengas to develop grapevines and a processing works

enabling Turkmenistan to export its natural gas. Germany & # 8217 ; s Siemens Power

Generation Group won a contract to provide, put in, and run three gas

turbine units in Egypt.


Coal is Germany & # 8217 ; s merely major domestic fuel beginning. Over 75 % of German

coal is used for electricity coevals, and coal makes up over 50 % of

electricity coevals. Difficult coal production is expensive in Germany, comparative

to production costs in other major coal manufacturers, because German coal is

deep resistance. Difficult coal production has remained a robust industry

merely through heavy subsidisation, which now is coming to an terminal. Lignite, or

& # 8220 ; brown coal & # 8221 ; , production, nevertheless, is cheap in Germany. Germany is

the universe & # 8217 ; s largest lignite manufacturer, with about fifth part of planetary end product.

In March 1997, the German authorities, the excavation industry, and the brotherhoods

reached an understanding on the future construction of subsidies to the German hard

coal industry. Subsidies to the industry are to be reduced from over DM10

billion ( $ 5.5 billion ) in 1997 to DM5.5 billion ( $ 3 billion ) by 2005. The

understanding called for closing of 7-8 of Germany & # 8217 ; s 19 difficult degree Celsius

oal mines ( 14 of

which are in operation as of October 1999 ) , ensuing in an estimated diminution

in employment from 76,000 mineworkers in 1997 to 36,000 by 2005.

Decreasing coal production has brought about alterations in the organisation of

the industry. Two of the major manufacturers, Saarbergen and Ruhrkohle

Bergbau, merged to organize Deutsche Steinkohle ( DSK ) , which accounts for

96 % of German production. DSK is portion of the larger RAG group, which

intends to diversify its retentions and concentrate less on coal as the sector psychiatrists

in approaching old ages.

As domestic production diminutions, Germany is emerging as a important coal

importer. Coal imports rose a reported 20 % in 1997 and another 15 % in

1998. Main providers are South Africa and Poland, with farther supplies

coming from Colombia, Australia, and the United States.

Germany & # 8217 ; s lignite production is separate from difficult coal production. Lignite

was the most of import fuel in the former East Germany. Since reunion,

uneconomical and environmentally detrimental excavation methods practiced during

Communist regulation have been reformed. The industry besides has been privatized.

Lignite production in Germany fell by about 75 % between 1989 and 1996,

largely in the former East Germany. Rheinbraun, a subordinate of RWE, is

responsible for 85 % of German lignite production. Most of its brown coal is used

to bring forth electricity in RWE & # 8217 ; s five power coevals workss.

German companies besides are involved in coal undertakings outside of Germany.

RAG owns portions in the Burton Coal Project and the German Creek coal

mine, both in Australia. Ruhrkohle International Mining, portion of DSK and

RAG, late bought the U.S. coal company Cyprus Amax, which made

RAG the universe & # 8217 ; s second-largest privately-owned coal manufacturer. The

acquisition of Cyprus Amax increased RAG & # 8217 ; s oversees coal production

from about 10 million metric dozenss per twelvemonth ( about 9 million short dozenss ) to

about 72 million metric dozenss per twelvemonth ( 65 million short dozenss ) .


Germany is Europe & # 8217 ; s largest electricity market. Generation is fueled by coal

( 54 % ) , atomic power ( 29 % ) , natural gas ( 10 % ) , hydro ( 4 % ) , and oil ( less

than 2 % ) . The industry is undergoing dramatic alterations in fuel mix and in

organisation. Attempts continue to phase out atomic power and to increase

trust on renewable energy beginnings, most notably wind power. The

German power market was liberalized in April 1998, and the branchings of

this alteration are still developing.

Germany had the most expensive electricity in Europe before liberalisation,

and it remains the most disconnected market with over 900 public-service corporations. Industrial

power monetary values have dropped between 30 % and 40 % since April 1998 ( with

residential monetary values presently following suit ) , and amalgamations are now brushing the

industry. An estimated tierce of all German power companies are sing

amalgamations or joint ventures. The largest of the possible amalgamations is between

Viag and Veba, two of the eight major grid operators. A amalgamation of the two

would make Germany & # 8217 ; s largest power company, a differentiation presently held

by RWE. Details of the trade are still under dialogue as of October 1999.

Smaller companies and new entrants to the market complain that the market

is non yet wholly liberalized, as the major grid operators and regional

supply companies make it hard for consumers to alter providers. U.S.-

based Enron, for case, claims that the current grid entree understanding does

non let it to offer competitively priced electricity.

Electricity is clearly on the way toward commoditization. Companies are

publicizing their new energy bundles for residential consumers, and

selling is going a cardinal component of energy companies & # 8217 ; schemes as

& # 8220 ; monetary value wars & # 8221 ; drive down residential monetary values. Topographic point markets have developed,

whereas prior to liberalization long-run contracts were the norm. New power

exchanges are planned for Frankfurt, Hanover, Dusseldorf, Leipzig and

Berlin, and the development of a hereafters market is underway.

Nuclear Power

Presently Germany ranks 4th worldwide in installed atomic capacity,

behind the United States, France, and Japan. Germany & # 8217 ; s atomic workss

comprise about 30 % of Germany & # 8217 ; s electric coevals capacity, and about

29 % of existent coevals.

Nuclear power has become controversial since the September 1998 elections.

The Greens, the environmental party that is portion of the opinion confederation voted

into power in the 1998 elections, are stanchly opposed to the continued usage

of atomic power. Chancellor Schroeder had decided to stop near all 19

atomic reactors in 2005, but he has since rescinded his place. The

authorities now plans to phase out the usage of atomic power beginning in


There are few economically feasible options to rapidly replace such a

important part of the fuel mix, particularly in the aftermath of the liberalisation

of the industry. Over the longer term, nevertheless, high costs ( high fixed costs,

long depreciation periods and long one-year operating times ) associated with

atomic coevals could work to diminish atomic coevals & # 8217 ; s function in

Germany & # 8217 ; s power sector. Nuclear installings presently are originating

plans to cut down production costs and waste disposal costs in order to

go more competitory in the deregulated, highly price-sensitive


Renewables *germe.html*

Germany has a strong committedness to protecting its environment

*germe.html* . It has actively promoted the usage of renewable energy, both

under the Kohl authorities with the Electricity Feed Law, and now under

Schroeder & # 8217 ; s authorities with eco-taxes. In Germany & # 8217 ; s eco-tax government,

energy revenue enhancement ( energy revenue enhancements are slated to increase 10 % over the following three old ages )

gross is used to fund renewable undertakings. As a consequence, Germany is the

largest manufacturer and consumer of air current energy *germe.html*in the universe. A

full 1 % of electricity is generated by air current power. Hydro-power is the 2nd

largest renewable beginning, followed by biomass and solar power.

The growing rate of air current power has accelerated in recent old ages ( it grew 30 %

in 1997 ) . Over the past 10 old ages, more than 5,000 modern electric-generating

windmills have been installed, chiefly along the blowy North Sea seashore. Wind

is expected to bring forth 3.5 % of electricity by 2010. In one part ( Schleswig

Holstein ) , 10 % of electricity now is generated from air current.

Individual German municipalities besides are developing solar power potency.

In Berlin, the Energie 2000 plan purposes to increase solar power usage. City

functionaries and the country & # 8217 ; s power house, Bewag AG, are puting $ 22.5 million

between 1997 and 2000 to back up solar energy undertakings, and 44 possible

solar installing sites already have been identified. Meanwhile, Germany

programs to construct two major workss to fabricate solar energy aggregators, and

purposes to construct sufficient capacity to run into one-third of universe solar engineering



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