Established the Federal Republic of Germany as a federal parliamentary democracy with separation of powers between the Executive, Legislative and Judicial branches of government.
Government Structure under the Basic Law
Bundestag – Elected every 4 years through universal suffrage. 50% of members directly elected, 50% elected through party lists. Parties need to win over 5% of the vote to gain additional proportional representatives.
Bundesrat – Made up of representatives of the Länder, has the power to approve or veto legislation.
President of the Republic – a largely ceremonial head of state elected by Bundestag members & representatives of the federal Länder.
Chancellor – head of government & elected by the Bundestag. Can only be removed from office through a constructive vote of no confidence.
Länder have extensive powers over administration, education, law & order.
Federal Constitutional Court – based on the US Supreme Court, designed to protect the constitution and had powers to settle disputes between the federal government and the Länder.
SPD – (Social Democratic Party) Continuity from 1875.
Espoused a programme calling for public ownership & a planned economy.
Committed to reunification and opposed European integration in the 1950s. In 1959 at Bad Godesberg
US investment through the Marshal Plan ($4.4 million).
Large, adaptable workforce (partly made up of refugees from Eastern Europe).
German determination to pull together for the national good – few disputes between labour and capital.
Germany had fewer burdens on her exchequer than other powers – no overseas commitments, colonial wars etc.
The Korean War (1950-53) increased demand for industrial goods and removed reluctance to buy German goods – exports boomed.
Unemployment fell from 1.9 million in 1950 to 200,000 in 1961.
GNP trebled during the 1950s, annual growth averaged just under 8%
Gap between rich and poor widened, but standards of living rose across the board – average income for industrial workers rose by 250% between 1950 and 1962.
The Social Market Economy
Advocacy of the free market wedded with a corporate framework
The role of the state to pick up the slack left by the market and introduce welfare measures to cancel out the inequalities caused by capitalism.
General agreement that the state should provide a safety net to make sure that citizens did not fall below a certain standard of living.
Equalization of Burdens Law (1950): transferred wealth from the well off to provide for those who had lost everything during the war.
1957: Pensions increased & index-linked so they would keep pace with cost of living.
Increased prosperity due to the economic miracle was slow to filter through to ordinary Germans. But, by the end of the 1950s the population was growing, the working week had been reduced to 45 hours, and ownership of consumer goods had increased.
Defeat and division wrought profound changes in German society: