Economy of Germany
Germany possesses the world's third most technologically powerful economy after the US and Japan and is part of the world's largest economy, the European Union.
While exports remain strong, the local market of the basically capitalistic economy has started to show problems commonly blamed on the generous social benefits. Unemployment has been a problem for several decades, and is now usually considered a long-term, not just cyclical, problem.
The integration and upgrading of the eastern German economy remains a costly long-term problem, with annual transfers from the west amounting to roughly $100 billion without conditions in the East actually improving after 1997.
Some economists have started saying that the transfers hurt more than they help since they don't encourage the East to get out of the slump by its own effort, while at the same time preventing dearly-needed infrastructure investment and upkeep in the West. There are still almost no internationally renowned companies headquartered in the East; most have only established subsidiaries.
Since the end of WWII the government is making efforts to integrate more and more with France, both economically and politically, to form what is today called the Franco German locomotive. This alliance is the basis of what is called the "core" countries in favour of greater integration of the European Union.
The recent adoption of the Euro and the general political and economic integration of Europe including the eastward expansion of the European Union are thought likely to bring major changes to the German economy in the early 21st century.
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