With coastlines on both the Baltic and North Seas,Germany is bordered by nine countries. Plains and rolling hills in the north give way to more mountainous terrain in the south. Europe's foremost industrial power, and its most populous country apart from Russia, Germany is the world's second-biggest exporter. Unified in the 1870s, it was divided after the defeat of the Nazi regime in 1945. The communist-ruled east was part of the Soviet bloc until the collapse of the East German regime in 1989, which paved the way for reunification in 1990. Tensions created by wealth differences between east and west were then exacerbated by record levels of unemployment. The government committed itself to European union and adopted the single currency, the euro, even though the stable deutsche mark had been a symbol of German pride.

The majority of German-speakers live in Germany itself, although Austria and the greater part of Switzerland are German-speaking, as are parts of eastern France and northern Italy. Germans share a common language, but they speak it in a variety of dialects, reflecting a strong sense of regionalism. The north is still largely Protestant, while the south and southwest, particularly Bavaria (Bayern), have strong Catholic traditions.

The large immigrant population now totals some 7.3 million, the 2.1 million Turks forming the largest single group. Gastarbeiter (guest workers) recruited from the mid-1950s to mid-1970s provided much of the labor on which the former West Germany's economic recovery was built. Legislation in 1999 improved the rights of their children to obtain German nationality.

Germany's once liberal asylum laws were tightened in 1993 in response to a new influx. Ethnic Germans enjoyed privileged access ahead of others fleeing westward after the collapse of communism. Extreme right-wing parties sought to exploit anti-immigrant feeling among disaffected groups including the young unemployed. In 2002 the government relaxed immigration quotas for skilled workers, recognizing the need for specific talents, but concurrently toughened the asylum procedure.

Family ties in Germany are little different from those in the USA or the UK. Millions of couples live together in common-law arrangements, although this is frowned on by the Roman Catholic Church. In rural districts, notably in Bavaria (Bayern), more traditional habits are still observed. The birthrate is one of Europe's lowest, and the population would have fallen were it not for the influx of immigrants since the 1950s.

Germany has a tradition of strong feminism. Women have full rights under the law and play a bigger role in politics than in most other European countries. In the Bundestag (Federal Assembly) elected in 1998, 30% of the members were women. There are six women ministers in the government. From 2001, women were permitted to take on combat roles in the armed forces. However, they are less well represented in top jobs in business and industry. Abortion remains a charged issue. Women in former East Germany once had the right to abortion on demand, but the Constitutional Court, after strong Catholic lobbying, overruled a relatively liberal 1992 compromise law for the whole country. The current regulations, dating from mid-1995, allow abortions (but only after counseling) within three months of conception.

Strengths

Europe's major industrial power. Efficient industry benefits from low inflation environment. Workers and managers live up to reputation for thoroughness and hard work. Strong sectors are cars, heavy engineering, electronics, and chemicals.

Weaknesses

Underestimation of the costs of updating inefficient eastern German economy. High welfare costs; pension obligations (despite reforms in 2001) with an aging population. Rising unemployment. Competition from efficient Asian economies. Relatively few small firms, a short working week, poorly developed service sector.

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West Germany's remarkable postwar recovery, to become the world's third-strongest economy, was based on the concept of a social market economy, under which the state provided welfare and ensured workers' rights, while the economy was largely in private hands. Major banks and businesses are privately owned, except for Volkswagen, partly state-owned. After reunification in 1990, massive investment went into the former East Germany, where state concerns were sold off.

The government of Helmut Kohl successfully put the case for completing European monetary union; the euro was fully adopted in 2002. The SPD-led government elected in 1998 undertook to tackle unemployment and to maintain growth, which reached a ten-year high of 3.1% in 2000. The $46 billion sale of "third generation" mobile phone operators' licenses reduced the budget deficit in 2001. Major tax reforms aimed to balance the budget by 2006. However, global economic slowdown brought Germany into recession at the end of 2001, with unemployment above 10% (meaning over four million out of work) and rising once again.

Germany is a federal democratic republic of 16 Länder (states). The government is led by the federal chancellor, elected by the Bundestag (Federal Assembly). The president's role is largely ceremonial. The "Basic Law" of West Germany, drawn up in 1948, became the 1990 federal constitution of reunified Germany.

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Germany's politics are now strongly democratic, with a long tradition of federative association. Before unification in 1871, Germany was a mass of separate principalities, kingdoms, and city states, a tradition in many ways maintained by Bismarck in his unification constitution. The 1933–1945 Nazi period, during which the federal system was abolished, was very much a hiatus. The Allies reestablished the federal system in West Germany in 1949; in the east, the Länder were restored after reunification in 1990. In many ways, the Länder are at the heart of German political life. Each Land has its own elected parliament and largely controls its own finances. City mayors also wield considerable power. By general consensus the system delivers efficient and commercially astute government. There have been few major differences on domestic policy between the postwar ruling coalitions. All parties support the social market economy on which German prosperity was built.

Germany has enjoyed stable governments, with coalitions of the center-left and center-right each holding sway for long periods since the "grand coalition" of 1966–1969. In 1998 the electorate chose moderate SPD leader Gerhard Schröder in a vote for change, ousting long-serving CDU Chancellor Helmut Kohl. Although the SPD-led government soon lost popularity, its CDU opponents were overwhelmed by a party funding scandal in 2000. Kohl was disgraced. His successor as CDU leader was Angela Merkel, the first person from the former East Germany to lead the party. She accepted in January 2002 that Edmund Stoiber, leader of the CDU's Bavarian-based sister party, the CSU, was the stronger candidate to contest the chancellorship that September.

Main Political Issues

The economy

Recession came as a shock to Germans, used to constant growth since the 1950s. Public spending was reined in in the mid-1990s to meet targets for European monetary union, despite unrest as unemployment peaked at over four million. A brief return to growth enabled the SPD to start tackling pension reform, but the economy still dominates the political agenda.

East and west

Most Germans supported reunification after the fall of the Berlin Wall in 1989, but feelings soured as the true costs became clear. Over DM1000 billion have been spent on reconstruction in the east, financed partly by a "solidarity surcharge" on income tax, but the tenth anniversary of reunification in November 2000 was less a celebration than a reflection on past mistakes. People moving west, still seen as "ossis," may find it hard to fit in. Support for the former communist PDS is strong in, but confined almost entirely to, the east.

Far-right violence

Unemployment and resentment of "foreigners" led to a rise in support for far-right parties. Foreign workers, particularly Turks, and asylum seekers have been subject to shocking attacks. The problem of racism, even if no worse than in many other European states, is particularly sensitive, given Germany's history.

During the Cold War, a divided Germany was forced to play a subservient role in international affairs, the west closely adhering to US interests and the east taking its orders directly from the USSR. Since reunification in 1990, the emphasis has changed, and Germany has begun to voice a foreign policy which reflects its position as the most powerful country in Europe. Still firmly Western-oriented, Germany has championed European integration and has considerable economic power over the former Soviet bloc countries through large-scale investment there.

2001 proved to be a seminal year for German foreign policy. Germany was given command of the NATO peacekeeping mission in Macedonia and German troops were involved in the "war on terrorism" in Afghanistan.

The large German army, designed for national defense, is being slimmed down to focus more on mobility and providing support to allied states. The Constitutional Court ruled in 1994 that army units could take part in collective defense activities abroad, opening the way for German participation in NATO operations; the 1999 action against Serbia was a landmark.

With relatively few natural resources, Germany imports over 50% of its energy needs, mainly oil and gas. Coal, the basis of industrialization, now accounts for under a quarter of energy consumption. West Germany invested less heavily than France in nuclear power, and Soviet-built plants in the east have been shut down. The "red–green" coalition government decided in mid-2000 to phase out nuclear power (which provides over 30% of electricity). Renewable resources account for 2% of primary energy consumption, but 6% of electricity production (with a target of 50% by 2050); Germany is the world's leading user of wind power.

Germans are among the world's most environmentally conscious people. Environmental campaigns led by the Green Party, which emerged as a powerful political force in the 1980s, have influenced the policies of all major parties. At national level, the Greens are a significant force in the Bundestag; they joined the SPD-led federal government coalition in 1998, and are strongly represented in Land parliaments and local councils.

Germany has some of the strictest pollution controls in the world, with ambitious targets for reducing carbon dioxide emissions, compelling businesses to become more energy-efficient. Germans recycle half of their waste paper, and three-quarters of their used tires and glass.

The nuclear debate has been vigorously fought and won by the Greens; a gradual program of closing existing nuclear power plants was approved in 2001, although waste disposal is still an issue. Fears in the 1980s that up to 50% of trees were sick or dying because of car fumes and industrial pollution led to Germany becoming the first European country to insist that new cars be fitted with catalytic converters. The east had the highest per capita rate of sulfur emissions in the world, but these have been reduced by the closure of industrial plants and the elimination of the noxious Trabant cars.

Germany virtually invented the modern highway with the first Autobahnen in the 1930s. These have since become Europe's most elaborate highway network. Despite protests from environmentalists there are generally no tolls and few speed limits. The efficient railroad system has been restructured as a first step toward privatization. Germany's high-speed ICE railroad opened its main north–south routes in 1991 and has expanded greatly since then. Urban transportation systems are highly efficient.

The German social security system, pioneered by Bismarck, is one of the most comprehensive in the world. Health insurance is compulsory, and employer and employee contributions are high. Although most hospitals are run by the Länder, some are still owned by Germany's wealthy churches. Almost one-third of health spending is now private.

Germans are increasingly health-conscious, paying great attention to diet. Nearly a million people go on cures every year to the country's 200-plus spas. In the east there is a higher incidence of lung diseases, the legacy of industrial pollution.

Nearly one-tenth of total government expenditure goes on education, which is run by the Länder. They coordinate teaching policies, but have autonomy within their borders. The German approach to education stresses academic and vocational achievement. Sporting or cultural activities tend to be organized informally. Nearly all schools have Internet access.

Young people wanting to leave school must continue studying at least part-time until 18. Those who wish to go to university attend the upper-secondary Gymnasien to prepare for the Abitur exam. Students were taking an average of seven years to complete degrees, until new legislation added shorter bachelor's and master's degrees as in other countries. Research is done as much by major companies as by the universities.

Crime rates in Germany are lower than in most other European countries. This is largely the result of a genuine respect for the law, coupled with a strong police force. Recently, however, higher unemployment has led to an increase in petty theft and a wave of violence, notably against immigrants.

German politicians, once with an enviably clean reputation, have suffered several corruption scandals. Civil service corruption remains rare. People convicted under environmental laws can face ten-year jail sentences.

The effects of the Nazi period, which discredited many of the ruling class, and the destruction of the property of millions of families in the war, explain the relatively classless nature of society. Status is now more closely linked to wealth than to birth. In the west, there are fewer disparities than in most of Europe; workers are generally well paid and social security is generous. Wages in the east, however, are 10% below western rates, and a disproportionate number of unemployed live on welfare benefit. Most Germans own a mobile phone, and almost a third of them had accessed the Internet by 2001.

Northerly beaches and a colder climate make Germany less of a tourist destination than France or Italy. Skiing in the Bavarian Alps, the historic castles of the Rhine valley, the Black Forest, and Germany's excellent beer are all major attractions. Berlin, even before 1989, drew tourists with its rich cultural life and its Wall separating capitalist West and communist East. Now capital of the reunified Germany, and with a dynamic and vibrant atmosphere, it has undergone massive reconstruction.

German unification in the 19th century brought together a mosaic of states with a common linguistic, but varied political, heritage.

• 1815 German Confederation under nominal Austrian leadership.
• 1834 Zollverein Customs Union of 18 states, including Prussia.
• 1862 Otto von Bismarck appointed Prussian chancellor.
• 1864–1870 Prussia defeats Austrians, Danes, and French; north German states under Prussian control.
• 1871 Southern states join Prussian-led unified German Empire under Wilhelm I.
• 1870s Rapid industrialization.
• 1890 Kaiser Wilhelm II accedes, with aspirations for German world role. Bismarck sacked.
• 1914–1918 World War I.
• 1918 Germany signs armistice; Weimar Republic created.
• 1919 Treaty of Versailles: colonies lost and reparations paid. Rhineland demilitarized.
• 1923 France occupies Ruhr; financial collapse and hyperinflation.
• 1929 World recession brings mass unemployment.
• 1933 Hitler chancellor after Nazis become largest party in elections. One-party rule; rearmament.
• 1935 Nuremberg Laws; official persecution of Jews begins.
• 1936 German entry into Rhineland. Axis alliance with Italy.
• 1938 Annexation of Austria and Sudetenland.
• 1939 Invasion of Poland starts World War II.
• 1940 France, Belgium, the Netherlands, and Norway invaded.
• 1941 USSR invaded.
• 1942–1943 Germans defeated by Red Army at Stalingrad.
• 1945 German surrender; Allies control four occupation zones.
• 1949 Germany divided: communist East led by Walter Ulbricht 1951– 1971, Erich Honecker 1971–1989; liberal democratic West led by CDU's Konrad Adenauer, first Chancellor, 1949–1963.
• 1955 West Germany joins NATO.
• 1961 Berlin Wall built.
• 1966–1969 West German grand coalition of CDU and SPD.
• 1969–1982 SPD-led West German governments under Willy Brandt (1969–1974), Helmut Schmidt (1974–1982).
• 1973 Both Germanies join UN.
• 1982 Helmut Kohl West German chancellor, CDU–FDP coalition.
• 1989 Fall of Berlin Wall.
• 1990 Reunification of Germany. First all-German elections since 1933; Kohl heads government.
• 1996 Rising concern over jobs.
• 1998 Gerhard Schröder heads coalition of SPD and Greens.
• 2000 Disgrace of Kohl in party funding scandal.
• 2001 Historic coalition in Berlin city government of SPD and former communist PDS.
• 2002 Euro fully adopted.