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
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.
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
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