Challenges in the 1980s (West Germany)

Challenges of the 1980s

Gap between richest and poorest widened.1978 - exported more than they importedMost of the world was in recession but Germany's total exports continued to rise.  However, it never regained the economic heights of the 1960s and real economic growth shrank as prices began to rise with inflation.Unemployment - 1.7 million - highest since 1950Cut public spending and was deeply unpopular - especially with those who wanted Germany to return to a social market economy. New government in 1982 determined to cut spending even more - claimed that welfare support created dependency.Public holidays were cut and retirement age reduced to 58.Gov sold off shares in state run institutions - partially privatising them. Policies created a slights but growing improvement - 1986 unemployment was at its lowest. Berlin Wall fell and the FRG economy braced itself for reunification. 

Integration into the European economy

Allies included Western zones of Germany into their organisations that were set up to rebuild EuropeLike Streismann, Adenauer saw political and economic integration with the rest of Europe and vital for economic and political success. Especially concerned with building a close working relationship with France. More concern with establishing trade agreements than with reunification.  

Changing Living Standards 1945-89

HUGE changes.War damage = families torn apart, starvation and homelessness. Refugee influx meant more pressure on housing. Housing and food were the most pressing issues of the late 1940s. Ministry of housing set up to aid rebuilding. Rents were frozen and the building industry was given tax concessions to buildHousing associations set up to build homes - some were state run - others were privately run. Spending PatternsAs the economy strengthened, the standards of living rose and and people began to spend their money again - mainly on consumer goods. Real wages kept ahead of prices, even thought the extent to which they were varied. 1980s - 90% of people were covered by benefits and healthcare. Most people received a state pension.People lived an average of 12 years longer. However, social inequality deepened.