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Country Commercial Guides FY 2000: Germany Report prepared by U.S. Embassy Bonn, released July 1999 Note*

CHAPTER III. POLITICAL ENVIRONMENT

Overview

The top priorities of the German government are to maintain economic growth and to continue fostering the development of eastern Germany. The new states are now an integral part of Germany, contain millions of voters, and are being brought up to the economic standards of western Germany as quickly as possible. Accordingly, a high priority continues to be placed on financing eastern development, implying the likelihood of a flow of major project opportunities for years to come.

In addition, Germany's political leadership also wants to promote Germany's competitiveness and various proposals are being considered to modernize the country's economic situation. Since unification on October 3, 1990, Germany has placed a high priority on improving its relations with its direct neighboring states as well as strengthening trans-Atlantic relations. Recognizing that political stability is nurtured by economic prosperity, Germany has been one of the major sources of assistance to Central European and CIS states. The country continues to emphasize close ties with the United States, membership in NATO, progress toward further European integration, and improved relations with Central Europe. German-American political, economic, and security relationships regardless of which administration has been in power in either country have been based on close consultation and coordination at the most senior levels. High-level visits take place frequently, and the United States and the FRG cooperate actively in international forums. U.S. Government officials enjoy good access to policy- and decision-makers, and are able to raise issues directly affecting U.S. business active in Germany.

Basic Government Structure

Under the German Constitution, known as the Basic Law, the Federal Republic of German (FRG) is a parliamentary democracy with a bicameral legislature, an independent judiciary and executive power exercised by a Prime Minister whose title is Chancellor.

The lower house of Parliament, The Bundestag, currently consists of 669 deputies elected for a 4-year term. Members are elected through a mixture of a direct vote for constituency candidates and a second vote for party lists. The federal and state electoral laws stipulate that parties must receive at least 5 percent of the national vote (or at least three directly elected seats in federal elections) in order to be represented in the federal and state parliaments. The next national elections will take place in the fall of 2002. One must be 18-years old in Germany to vote.

The Federal President may be elected to two 5-year terms, and his or her duties as chief of state are largely ceremonial. Executive power is exercised by the Chancellor who is elected by and responsible to the Bundestag. The Chancellor cannot be removed from office during a 4-year term unless the Bundestag has agreed on a successor.

The upper house, the Bundesrat, comprising 69 members, is composed of delegations from the 16 state governments. Each state has between 3 and 6 votes, depending on the population of the state. The role of the Bundesrat is limited, but it can veto or engage in revision of legislation passed in the Bundestag when the proposed legislation would impose or affect the responsibilities of the states. Among these are matters relating to tax reform, law enforcement and the courts, culture and education, the environment, and social assistance.

The political parties represented in the Bundestag are:

-- The Social Democratic Party (SPD), which abandoned the concept of a working class party in 1959 while continuing to stress social welfare programs. The SPD heads the federal government that took office in October 1998 under Chancellor Schroeder.

-- The Christian Democratic Union and its Bavarian sister party, the Christian Social Union (CDU/CSU). The CDU/CSU is generally conservative on economic and social policy.

-- The Alliance 90/The Greens (Buendnis 90/Die Gruenen), which has an environmentalist, pacifist platform, is the junior partner in the federal coalition government.

-- The Free Democratic Party (FDP) identifies itself as a relatively market-oriented, civil libertarian party.

-- The Party of Democratic Socialism (PDS), which is the successor party to the SED (the communist party of the former German Democratic Republic).