Population 82.1 million
GDP 40,952 US$
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major macro economic indicators

  2014  2015  2016 (e) 2017 (f)
GDP growth (%) 1,6 1,7 1,9 1,6
Inflation (yearly average) (%) 0,8 0,1 0,4 1,4
Budget balance (% GDP) 0,3 0,7 0,6 0,4
Current account balance (% GDP) 7,5 8,5 9,0 8,6
Public debt (% GDP) 74,9 71,2 68,0 66,0


(e) Estimate   (f) Forecast


  • Solid industrial base (1/4 of GDP)
  • Low structural unemployment and well-developed system of apprenticeships
  • Geographic diversification of exports
  • Good competitiveness
  • Importance of family-owned exporting SMEs (Mittelstand)
  • Integration of Central and Eastern Europe in productive process
  • Importance of the ports of Hamburg, Bremerhaven and Kiel
  • Institutional system promoting representativeness and consensus


  • Ageing infrastructure
  • Low birth rate offset by immigration
  • Shortage of engineers and venture capital
  • Highly dependent on world, especially European, markets
  • Prominence of automotive and mechanical engineering industries
  • Persistent but reducing backwardness of eastern Länder
  • Weak productivity of services

Risk assessment

Moderate growth driven by domestic demand and export revival 

Since 2014, growth has been moderate. Household consumption, although it has lost some of the dynamism of 2016 due to the influx of refugees and the fall in the price of energy, confirms its role as the primary contributor.  It is sustained by the steady rise in employment, which could reach 600,000 new jobs in 2017, especially in social services and health.. Despite the probable return of modest inflation, real disposable incomes should grow by roughly 1%, as wages rise due to the shortage of skilled labour. Public consumption slows with the drop in the number of refugees taken in, but public investment in social housing and infrastructure continues to perform well, both at the federal and local levels, whose tax revenues are rising sharply. The private housing also keeps a good progression, supported by a cheap and very accessible credit. However, the construction may encounter saturation of capacity. Slightly negative in 2016, the contribution of trade to growth could be slightly positive in 2017. Indeed, the rise in imports induced by strong domestic demand would be offset by the increase in exports, which benefit from the recovery of large emerging markets ( 23% of outlets, excluding China) such as Brazil or Russia, stabilization of Chinese growth (6% of outlets), consolidation of European (60%) and North American (10%) demand. Against this favourable background, companies are resuming their investment in equipment and buildings, but cautiously, despite the high rate of production capacity utilisation, amid uncertainty linked to the Brexit and US trade policy. In this environment, German businesses' payment behaviour remains generally good. The decline of 4.3% (after a drop of 5.4% in 2016) in the number of insolvencies in the first quarter of 2017 is expected to continue (-5.6% expected in 2017), but the companies concerned (and their liabilities) are bigger. Some sectors will continue to be riskier than average: agriculture, slaughterhouses, electricity providers, metallurgy, publishing, construction, food and domestic appliances retail, and distance selling.


Public and external accounts in surplus

Despite slight fiscal loosening, against a background of tax relief for households and higher spending on transport, energy, defence and early childhood services, which are not offset by the reduced debt service burden (0.5% interest rate on 10-year Bunds, negative on shorter maturities), the increase in revenue linked to growth and the lower cost of refugees and unemployment (5.6% at the end of May 2017) will allow a surplus to be generated. However, structurally, i.e. excluding favourable effects of the economic situation and low interest rates, the balance is only slightly in surplus (about 0.3%),

Although slightly lower, the current account balance will remain broadly in surplus thanks to a massive trade surplus (8.8% of GDP in 2016). The balance of services will post a slight deficit (1% in 2016), with the tourism deficit exceeding the positive balance for financial and IT services, royalties and services to businesses. The income balance is expected to retain a small surplus, with income from investments abroad, which are increasing due to recurring current surpluses, slightly exceeding remittances sent by émigrés and investors to the countries of origin.


A Chancellor well positioned to win the September 2017 elections 

Chancellor Angela Merkel (Christian Democrat, CDU), in power since 2005 and at the head of a grand coalition government since September 2013, with Sigmar Gabriel (Social Democrat, SPD) as Vice Chancellor and Minister of the Economy, will stand again at the next parliamentary elections on September 24. Although criticised for opening the borders to refugees by its right wing represented by the Bavarian CSU and a fraction of the CDU, its popularity reached 64% in June 2017, that of its social democratic rival Martin Schulz, former President of the European Parliament, 34%. The CDU won the three regional elections in 2017 (Saarland, Schleswig Holstein and Rhineland-Westphalia, the latter being a traditional bastion of the left. .



The good macroeconomic situation does not rule out structural problems 

Despite immigration, the ageing population is putting pressure on the economically active population. It is therefore essential to integrate the refugees in the labour market. Female participation in the labour market is still hampered by the lack of childcare facilities, eventhough the gap is closing. The shortage of engineers and researchers is inhibiting innovation - a consequence of there being fewer students in higher education, many having been lured away by apprenticeships. The funding of the transition from 25% to 80% renewable energy by 2050, the phasing out of nuclear power by 2022 and modernisation of coal-fired power stations are controversial measures, The electricity transmission system does not allow optimal exchanges between the north, where wind potential exists, and the south, where solar energy is produced, leading to loss of capacity. Lack of both public and private investment explains these difficulties.


Last update : June 2017


Bank transfer (Überweisung) remains the prevalent means of payment. All leading German banks are connected to the SWIFT network which enables them to provide a quick and efficient funds transfer service. SEPA Direct Debit Core Scheme and the SEPA Direct Debit B2B are the new forms of direct debit.


Bills of exchange and cheques are not used very widely in Germany as payment instruments. For Germans, a bill of exchange implies a critical financial position or distrust in the supplier.


Cheques are not considered as payment as such, but as a "payment attempt": as German law ignores the principle of certified cheques, the issuer may cancel payment at any time and on any grounds. In addition, banks are able to reject payments when the issuing account contains insufficient funds. Bounced cheques are fairly common.


As a general rule, bills of exchange and cheques are not considered as effective payment instruments, even though they entitle creditors to access a "fast track" procedure for debt collection in case of non-payment.


Debt collection

Amicable Phase

The amicable collection is an essential step to the success of collection management. The collection process generally begins with the debtor being sent a final demand for payment, via ordinary or registered mail, reminding the debtor of their payment obligations.


According to the "Law for the acceleration of due payments" (Gesetz zur Beschleunigung fälliger Zahlungen)a debtor is deemed to be in default if a debt remains unpaid within 30 days of the due payment date and after receipt of an invoice or equivalent request for payment, unless the parties have agreed to a different payment period in the purchase contract. In addition, the debtor is liable for default interest and reminder fees upon expiry of this period.


Debt collection is recommendable and common practice in Germany.


Legal proceedings

Fast-track proceeding

Provided the claim is undisputed, the creditor may seek order to pay (Mahnbescheid) through a simplified and cost-efficient procedure. The creditor describes the details of their claim and is subsequently able to obtain a writ of execution fairly quickly via the Online-Dunning Service (Mahnportal), direct interfaces or (only for private individuals) pre-printed forms. Such automated and centralized (for eachBundesland,federal state) procedures are available all over Germany.


This type of action falls within the competence of the local court (Amtsgericht) for the region in which the applicant’s residence or business is located. For foreign creditors, the competent court is the Amtsgericht Wedding (in Berlin). Legal representation is not mandatory.


The debtor is given two weeks after notification to pay their debts or to contest the payment order (Widerspruch). If the debtor does not object within this timeframe, the creditor can apply for a writ of execution (Vollstreckungsbescheid).


Ordinary proceedings

During ordinary proceedings, the court may instruct the parties or their lawyers to substantiate their claim, which the court alone is then authorised to assess. Each litigant is also requested to submit a pleading memorandum outlining their expectations, within the specified time limit.


Once the claim has been properly examined, a public hearing is held at which the court passes an informed judgement (begründetes Urteil).


The losing party will customarily bear all court costs, including the lawyer’s fees of the winning party to the extent that those fees are in conformity with the Official Fees Schedule (theRechtanwaltsvergütungsgesetz/ RVG). In the case of partial success, fees and expenses are borne by each party on a pro rata basis. Ordinary proceedings can take from three months to a year, while claims brought to the federal Supreme Court can reach up to six years.


An appeal (Berufung) may be brought against the decision of the Court of First Instance if the objected amount in dispute exceeds EUR 600. An appeal will also be admitted by the Court of First Instance if a case involves a question of principle or necessitates revision of the law in order to ensure ’consistent jurisprudence’.


Enforcement of a court decision


Enforcement may commence once a final judgement is made. If debtors fail to respect a judgment, their bank accounts may be closed and/or a local bailiff can proceed with the seizure and sale of their property.


For foreign awards, in order to obtain an exequatur, the creditor needs a notarized German translation of the decision which also has to be recognized, an enforcement order of this judgment, and an execution clause. Judgments of courts of member states of the European Union are recognized without further procedure – unless certain restrictions arising from European law are applicable.


Insolvency proceedings

Out-of Court proceedings

Debtors may attempt to renegotiate their debts with their creditors, which helps to protect debtors from early payment requests. However, the procedure is in the creditors’ interest as it can be faster and tends to be less expensive than formal insolvency.


Sustainable restructuring

Following a petition filed before insolvency court on the basis of illiquidity or over-indebtedness, the court may open preliminary insolvency proceedings, where it appoints a preliminary administration aimed at exploring the chances of restructuring the company. If the administration authorizes this restructuration, it then initiates formal proceedings and nominates an administrator in charge of continuing the debtor’s business whilst preserving its assets.



Liquidation may be initiated upon demand of either the debtor or the creditor provided that the debtor is unable to settle its debts as they fall due. Once recognized through a liquidation decision and once the company has been removed from the register, the creditors must file their claims with the liquidation administrator within three months of the publication.


Retention of title

Retention of title is a written clause in the contract in which the supplier will retain the ownership over the delivered goods until the buyer has made full payment of the price. There are three versions of this retention:

  • Simple Retention: the supplier will retain the ownership over the goods supplied until full payment is made by the buyer.
  • Expanded Retention: the retention is expended to further sale of the subsequent goods; the buyer will assign to the initial supplier the claims issued form the resale to a third party.
  • Extended Retention: the retention is extended to the goods processed into a new product and the initial supplier remains the owner or the co-owner up to the value of his delivery.
Insolvency trend Germany 2014
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