Germany 2

Germany is located in Central Europe. It borders the Baltic Sea and the North Sea. It is between the Netherlands and Poland, south of Denmark. It is slightly smaller than Montana. Germany's economy was the world's third most powerful in 1997. The German economy benefited from robust exports, particularly to other members of the EU and the US, as well as strengthening equipment investments. But anemic private consumption and contraction in the construction industry limited the expansion. Unemployment continued to set post-war monthly records through the end of 1997 and averaged 4.3 million for the year. In preparation for the first of January 1999, the start of the European Monetary Union, the government has made major efforts in 1996-97 to reduce the fiscal deficit. This effort has been complicated by growing unemployment, an erosion of the tax base, and the continuing transfer of roughly $100 billion a year to eastern Germany to refurbish this ex-communist area. In recent years business and political leaders have become increasingly concerned about Germany's decline in attractiveness as an investment target. They cite increasing preference by German companies to locate new manufacturing facilities in foreign countries rather than in Germany, to be closer to the markets, and to avoid Germany's high tax rates, high wage cost, rigid labor structures, and extensive regulations. For similar reasons foreign investment in Germany has been lagging for years. Germany is one of the world's leading industrial nations. Western Germany is among the world's largest and technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, and electronics. Eastern Germany's industries are metal fabrication, chemicals, brown coal, shipbuilding, machine building, textiles, and petroleum refining. Industry employs around 41 percent of the German work force. Germany's biggest industry is