Introduction

This part introduction presents an overview of the key concepts discussed in the subsequent chapters. The part argues that the country’s vaunted “relationship banking” may not be as influential as once thought. It reviews Germany’s role defining the European Monetary Union. The part highlights not only the influence of the European Union on Germany’s economic policies but also illustrates the tensions among Brussels, Bonn, and the Lander. It discusses Germany’s efforts to retain and attract long-term productive investment. The part provides an overview of key issues pertaining to Germany’s economic situation and economic policy since unification. One of the most pressing issues challenging policymakers at this time is Germany’s growing budget deficit. During the postwar period officials in the Federal Republic of Germany were loath to undertake debt-incurring government spending. In early 1993 Germany’s leading economic institutes published grim predictions for the country’s expected performance.