Germanys Economy and Challenges as a country and as a member of the

Germanys Economy and Challenges as a country and as a member of the Germany's Economy and Challenges as a country and as a member of the EU – Essay Example Germanys Economy and Challenges as a Country and As a Member of the EU The Current Political and Economic Situation of Germany within Europe Germany, a dominant country in Europe, enjoys several benefits as a member of the European Union (EU). The adoption of the euro spurs investments in European countries since there is lower interest rates. German companies and investors have a competitive edge owing to its stable manufacturing base and the economic and political environment. The current economic and political situation of Germany within Europe offers some current and future challenges. Economically, Germany has the largest national economy within Europe. The country plays an important role in a period where there is extensive globalization, especially in economic terms. Germany has a globalized economy mostly because of its social market economy policy, which has consequently ranked it as among the world’s leading exporters. Apart from hosting trade fairs, Germany has the largest stock market listed companies globally. Alongside the United States, it is committed to an open, ever-changing and ever-expanding world economy. The economic environment offers several current and future challenges as a member of the EU. Germany fairs well in terms of national debt than the other EU countries, characterized by high tax revenues and a thriving economy. Even though, its spending surpasses tax revenues, coupled by an extremely high debt in most states and municipalities. In addition, Germany mainly constitutes an aging population, and this coupled by soaring unemployme nt rates, means that there is less tax revenue because of the depletion of social security at a faster rate than before. As a requirement of the EU, Germany lowered its budget deficit below 3% of GDP, to avoid future fiscal problems. Politically, Germany has a parliamentary government that promotes a democratic constitution. Its constitutional structure accentuates the protection of individual freedom and division of powers in a federal arrangement. There are several political parties, such as Christian Democratic Union/Christian Social Union, Social Democratic Party, and Free Democratic Party, which influence the political situation for the region. The Basic Law provides stability and liberty in the region, which is similar to the liberal Western democracies. The political environment offers several current and future challenges. Violent hate crimes, racism, and neo-Nazism are current challenges that affect the future of Germany as a member of the EU owing to their intermittent turmoil. In addition, the euro-crisis is a pivotal foreign-policy issue that affects the operations of the country. The political fragmentation in the region is bound to worsen the situation because the country’s leader does not ha ve a majority vote and an overriding support from its citizens (Ewing 2013). Germany is the worlds biggest single exporting nation, dominates the European Union, and there is recent interest in the use of the German-based euro as an international currency. These economic factors are significant if Germany strives to avert any future challenges because of its political and economic situation. Germany is a globally competitive player owing to its political standing and economic policies, which most of its European neighbours have not adopted suitably. References Ewing, J. (September 16, 2013). Germany’s Political Fragmentation May Pose Challenge for Merkel. The New York Times.