The history of Germany had a great impact on its current economic and political life. During the past century Germany was an active player in the international relations, which makes it difficult to track down all impacts and consequences of its policy in the past. In order to find out the impact of historical past we need to review its history from Bismarck’s unification of Germany. The unification of Germany was carried out by anti-democratic means on the Prussian militaristic basis. Its most important stages are: creation (after the Prussian victory in the Austro-Prussian War of 1866) of the North German Confederation (1867) and the declaration of German Empire after the Franco-Prussian war of 1870-1871. In 1875 a unified Social Democratic Party was created. In 80-90s of the XIX century Germany conquered vast territories, mainly in Africa. In 1914, the imperialist Germany unleashed World War, during which a military coalition led by Germany (or Germany and Austria) had failed. Germany signed the Treaty of Versailles in 1919, which pushed Germany back to its original sizes and put under dependence of the winning coalition. November Revolution of 1918 led to the overthrow of the monarchy and the establishment of the Republic (the so-called Weimar Republic). In 1918 the Communist Party of Germany was formed. In 1922 diplomatic relations between Germany and Soviet Russia were established (Rapallo Treaty). In 1933, Germany established a Nazi dictatorship led by Hitler. Hitler enabled Germany to get out of economic crisis and increased its military potential. Nazi Germany annexed Austria (1938), Czechoslovakia (1938-1939) and posed significant threat to world leading countries. On September 1, 1939 Germany invaded Poland thereby unleashing the Second World War. On June 22, 1941 Germany declared war on the USSR as well. On May 8, 1945 Nazi Germany, defeated by anti-Hitler coalition with the decisive participation of the USSR, surrendered unconditionally. The territory of Germany was divided into Soviet, American, British and French occupation zones. The principles of post-war Germany - its demilitarization, denazification, and democratization - were identified on Potsdam Conference in 1945, however, its decisions were consistently performed only in the Soviet zone of influence. The governments of the United States, Britain and France took the course for the economic revival of Germany and its further separation from the Soviet part. In September 1949, the Western allies created the Federal Republic of Germany (FRG). On October 7, 1949 the Soviets established the German Democratic Republic (GDR) in the eastern part of Germany (Adler, 2003). The development of East and West Germany went different ways. East Germany after completing the democratic transformation in 1950's headed for the building of socialism, headed by the Socialist Unity Part. The working people of the GDR under the SED leadership (in the years 1953-1971 the First Secretary of the Central Committee of the SED was Walter Ulbricht, in 1971-1976 the first general secretary of the Central Committee of the SED was Erich Honecker) were building developed socialist society under the tight control of the USSR. Since 1950 GDR was a member of CMEA and since 1955 – the member of Warsaw Treaty Organization. At the initiative of the German Democratic Republic in 1972 signed the Treaty on Basic Relations between East and West Germany, which confirmed the inviolability of existing borders and diplomatic relations between the GDR and the Soviet Union. Federal Republic of Germany was founded in September 1949 by the efforts of the Western powers (U.S., UK, France) with the active participation of the militarist and imperialist circles of Germany in violation of the Potsdam Conference in 1945 against Germany. In 1949-1963 the bloc of parties led by the CDU/CSU headed the German government. Under coalition’s rule West Germany joined NATO in 1955, the EEC in 1957. In 1968, the German Communist Party was constituted. After gaining the winning coalition in 1969 Social Democrats and the Free Democratic Party signed up such agreements: with the Soviet Union and Poland in 1970, Czechoslovakia in 1973, East Germany in 1972. The treaties recognized the inviolability of existing borders after the war. From October 1982 a coalition of CDU/CSU and the FDP came back to power. The period of separate existence of two sovereign German states continued until October 1990. On September 12, 1990 the Treaty on the Final Settlement with Respect to Germany was signed in Moscow. In accordance with the decision of the People's Chamber of the German Democratic Republic (the highest organ of state power) the German Democratic Republic acceded to the Federal Republic of Germany and formed a unified German state solution on October 3, 1990 (Adler, 2003).
After unification Germany faced many problems due to the incompatibility between two parts at the first step of integration. The collapse of the SED regime and the subsequent annexation of East Germany to West Germany led to a qualitatively new state of the country and changed the lives of millions of Germans. The specifics of the new Federal Republic of Germany today is that the deepest transformations of the five new federal states (the former GDR) are determined not by the public will, but are held in accordance with the settings of West Germany, which funds these changes and gives them pace and direction. The path chosen by Germany after the accession of the GDR to the Federal Republic of Germany proved to be more difficult and complex than originally imagined in the East and the West. It proved to be fruitless to calculate the potential of a united Germany by simple addition of the main indicators that characterized the state of the economy of FRG and the GDR. It became obvious that these figures are like in different dimensions and difficult summation. Moreover, the result of this summation is still a minus. The annual cost to finance the integration of five new lands to the Federal Republic of Germany to West Germany is up to 5% of the gross domestic product of the country. And that means diverting huge funds that could be used for the development of advanced industries and strengthening the weakening German positions on the world market. Nevertheless Germany managed to achieve economic balance and currently is the 4th largest economy in the world after the US, China and Japan. Moreover the growth rate is quite stable (0,7% during the last year) although not even close to China’s (about 6%). The inflation rate of 2% also contributes to Germany’s leadership in the European Union (Destatis, 2013).
In the political life German party landscape has clear contours. The "Greens" (in 1980s) and successor party of the SED entered the existing three-party system after the reunification of Germany in 1990 and developed a stable five-party system. The main two parties are CDU/CSU and SPD which rivalry has more than a 50-year history. The other smaller parties, such as the “Greens”, “The Left” and the “Free Democrats” form coalitions with main parties. Such stable party system was historically determined and is completely incorporated in the European party tradition (division into social-democrats and conservatives). German politics is determined by the membership in the US, where due to economic strength Germany plays the role of a financial donor. This tendency dates back to pre-war German state, when Germany became the largest economic power on the continent. Therefore, there is predisposition to economic growth in Germany (Poguntke, 2001).
The basic principles of German policy towards the EU are characterized by non-partisan consensus. Germans seek viable, but democratically arranged and transparent Europe with a stronger European Parliament. Like many other Europeans they reject the idea of a European super state, and prefer a clearer delineation of competencies. In 2005, Germany overwhelmingly ratified the constitutional treaty in the Bundestag and the Bundesrat and is still interested in further development of the EU in the spirit of the treaty. Germany won both economic and political benefits from the presence of the EU common market, the euro and the process of expansion (Behr & Helwig, 2012). The central position in the world's largest single market can to a large extent be explained by the power of the German export economy. According to German Statistics Bureau, Germany has a positive trade balance of 188 billion Euros (Destat, 2013). In addition, the economic ties with its neighbors in the eastern part of Central Europe can be characterized by integration. German economy is the largest trading partner and a major investor in most cases. At the same time Germany exposed to the effects of European integration. It cannot defend its East German market against competition from EU partners. Therefore, the example of European Union shows historical impact of 20th century on Germany by pointing at Germany’s dominant position in both economic and political life. Germany initiated most political processes in the 20th century Europe and currently plays an active role in EU integration.
The German historical background is characterized by active political, social and economic role of German Empire, Nazi German and FRG. Although Germany was an aggressor in most European wars at the end of 19th- 20th century, its current political and economic policies point at the fact that Germany made the right conclusions. Currently Germany is involved in the main world organizations and seeks to contribute to the world community. After the World War II Germany made a great leap towards democracy and free market as a matter of integration to the world community. Historical background impacts German economy in a way that division between East and West stills matters. German heterogeneity and involvement to the world market make West Germany prosperous, while East Germany cannot compete effectively. Nevertheless, the status of the leading economic power in Europe did not vanish after Great Depression, world wars’ destructions and Soviet domination in Eastern Germany. In the political sphere it can be noticed that the party system in Germany is a direct result of historical evolution of parties from 1875. The after-war period was crucial in determining the Germany’s international policy. Germany became one of the initiators of European community’s expansion after joining EEC, which currently takes form of EU.
Adler, Philip J. World Civilizations. 6th ed. Belmont, CA: Thomson/Wadsworth, 2003. Print.
Behr , Timo, and Niklas Helwig. "Constructing a German Europe?" THE FINNISH INSTITUTE OF INTERNATIONAL AFFAIRS (2012): Web. 9 Oct. 2013.
Destatis. "Fact & Figures National economy & environment - Federal Statistical Office."German Statistics Official Website. Web. 9 Oct. 2013. <https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvironment/NationalEconomyEnvironment.html>.
Poguntke , Thomas. The German Party System: Eternal Crisis?. School of Politics, International Relations and the Environment (SPIRE), 2001.