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Pertinent Historical Question: Which Country Really Rules the World? (Part II)

 

 

 

  Wednesday, June 15, 2009 

 

 

  By Ivan Simic

 

   

Weimar Republic established extraordinary relations with both the United States and the USSR, and was admitted to the League of Nations as a permanent member, which gave her a good international position and the ability to veto.

The Great Depression later harmed Germany as it did to the rest of the western world, which was subject to debt repayments for loans. Yet, Germany survived financial crises thanks to production of steel, large foreign investments and German industrial influence in the United States.

Nazi Germany or the Third Reich arose in the wake of the national shame, embarrassment, anger and resentment which resulted from the Treaty of Versailles. More or less everybody knows that Adolf Hitler was the ruler of Germany from 1933-1945 and leader of Nazi Party from 1921, and that Germany eventually lost the World War II.

In June 1933, the "Reinhardt Program" was introduced. It was an ambitious project for the development of infrastructure. It combined indirect motivations, such as tax reductions, with direct public investment in waterways, railroads and highways. In addition, the German car industry experienced a boom and military spending in Germany exceeded 10% of GNP (higher than any other European country at the time).

By the late 1930s, the aims of German trade policy were to use economic and political power to make the countries of Southern Europe and the Balkans dependent on Germany. The German economy would draw its raw materials from that region, and the countries in question would receive German manufactured goods in exchange. Already in 1938, Yugoslavia, Hungary, Romania, Bulgaria and Greece transacted 50% of all their foreign trade with Germany.

Nazi regime encouraged German businesses to form cartels, monopolies and oligopolies, whose interests were then protected by the state. As big business became organized, it developed an increasingly close partnership with Hitler and the Nazi government. The government pursued economic policies that maximized the profits of its business allies, and in exchange, business leaders supported the government's political and military goals. Those German businesses include; Krupp, Thyssen, IG Farben, Deutsche Bank, Siemens, Salzgitter, Munich Re, among others.

After the end of WWII, Germany was divided to four regions: West Germany, East Germany, Saar protectorate and Ruhr area. The Allies decided to abolish the German armed forces as well as all munitions factories and civilian industries that could support them. This included the destruction of all ship and aircraft manufacturing capability.

The first level of industry plan, signed by the Allies in March 29, 1946, stated that German heavy industry was to be lowered to 50% of its 1938 levels. German steel production capacity was set at about 5,800,000 tons of steel a year, equivalent to 25% of the prewar production level. Germany was to be reduced to the standard of life it had known at the height of the Great Depression, car production was to be set to 10% of prewar levels, among others.  In addition, the costs of the occupation were charged to the German people, about $2.4 billion per year. The first plan was subsequently followed by a number of new ones in order to destroy German industry for the next century.

From May 1945 until September 1947, the US, UK, and France exported German coal for $10.50/ton, while the world price floated closer to $25-$30 per ton. During this period, the Allies took roughly $200,000,000 out of the German economy from this source alone. Germany received many offers from Western European nations to trade food for desperately needed coal and steel, however, the Allies disallowed the Germans to trade.

Allies also confiscated large amounts of German intellectual property. The US and the UK pursued a dynamic program to harvest all technological and scientific experience, as well as all patents in Germany. The so called intellectual reparations taken by the US and the UK amounted close to $10 billion.

Additionally, the Ruhr Agreement was imposed on the Germany as a condition for permitting them to establish the Federal Republic of Germany. By controlling the production and distribution of coal and steel, the International Authority for the Ruhr in effect controlled the entire West German economy. French were very interested in Ruhr area since their first occupation of Ruhr in January 1923, as a reprisal after Germany failed to fulfill reparation payments demanded by the Versailles Treaty. French aimed at dismantling German heavy industry, to place the coal rich Ruhr area and Rhineland under French control (or at a minimum internationalize them), and also to join the coal rich Saarland with the iron rich province of Lorraine. Consequently, in 1947, France removed the Saar from Germany and turned it into a protectorate under French economic control.

In 1951, West Germany agreed to join the European Coal and Steel Community (ECSC). This meant that some of the economic restrictions on production capacity and on actual production that were imposed by the International Authority for the Ruhr were lifted, and that its role was taken over by the ECSC. The area returned to German administration in January 1, 1957, but France retained the right to mine from its coal mines until 1981.

Failure to win the war did not affect Germany that much, as Germany managed to secure its local industry and foreign business investments. For Hitler was important to secure private investments of its countryman and financiers, since he personally believed in private capital. One of such cases was the Lex Krupp, a document signed into law on November 12, 1943 by Adolf Hitler to avoid inheritance law and ensure that the Krupp family enterprise remain intact.

Despite all oppressions against Germany and the German people, West Germany, soon benefiting from the currency reform of 1948 and the Allied Marshall Plan, saw the fastest period of growth in European history from the early 1950s. This period soon became known as the "economic miracle" or Wirtschaftswunder. Industrial production increased by 35%. Agricultural production substantially surpassed pre-war levels. The poverty and starvation of the immediate postwar years disappeared, and Western Europe and especially West Germany embarked upon an unprecedented two decades of growth that saw standards of living increase dramatically.

After everything that happened to Germany, in 1955, West Germany joined NATO. A major reason for Germany's entry into the alliance was that without German manpower, it would have been impossible to field enough conventional forces to resist a Soviet invasion.

On October 3, 1990, German Democratic Republic (East Germany) joined the Federal Republic of Germany (West Germany), making today’s Federal Republic of Germany (Bundesrepublik Deutschland).

Germany rapidly prospered after WWII, regaining its position as the strongest European country and economy.

Today, despite all wars, reparation payments, destruction of land, exploitation of industry, Germany is standing strong. Germany is a federal parliamentary republic of sixteen states. Germany is a member of the United Nations, NATO, G8, the OECD, IMF, among others. It is a major economic power with the world's fourth largest economy by nominal GDP. It is the largest exporter and second largest importer of goods in the world. Germany has a high standard of living and comprehensive system of social security.

Germany’s economy has enormous impact on our lives as we speak. If we look around us, we will find that German products are dominating our lifestyles. Companies like DHL, T-Mobile, Adidas, Puma, Audi, BMW, Mercedes, Hugo Boss, Henkel, Bayer, among others are key factors in today's life.

It is not a secret that Germany is the most influential and most powerful country in Europe since the 3rd century, and now European Union. However, how did Germany managed to have such influence on the United States of America. 

For the past century, German influence in United States was seen trough wealthy individuals, Government officials and companies like Krupp, Thyssen, IG Farben, Deutsche Bank, Siemens, Salzgitter, Munich Re and one political party; The Christian Democratic Union of Germany (CDU).

Ivan Simic lives in Belgrade, Serbia. Address: Paloticeva 12, 11000 Belgrade, Serbia, Tel: +381 63  7508500.                                                                                                                           
     

 

                                                                                                                                  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

                                                                                                           

 

 


 

                                                            

 

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