BUSINESS

German Corporate Profile (PESTLE Analysis)

German Corporate Profile (PESTLE Analysis)

Political

Stability Factor in Germany

Over the past few years, the euro zone has been struck by a severe crisis. Greece, a member of the euro zone, was at the brink of collapse in 2010. This sparked fears and anxiety among other members who, rightly so, feared the country would default on its debts. There were also concerns over the state of a number of other European Union members of defaulting. These countries included Ireland, Italy, Spain and Portugal. High level of debt and structural weaknesses of the economy were some of the most significant causes behind the collapse, which was thought to be contagious. In 2010, the European Union was forced to attempt to prevent a collapse with the help of the IMF. A euro stability package was agreed upon which was designed to stem the flow of the crisis to other member states of the region. Moreover, the European Central Bank was notified to prepare for extraordinary interventions in markets as a precautionary step. In case of an intervention, the ECB would purchase bonds of euro zone governments so as to maintain the value of the Euro. This has raised fears among foreign and domestic investors thereby reducing the amount of investment being made in the country (Mole, 2006, pp. 44).

Form of Government

The existing system of government in Germany was first conceived in 1949 after the fall of Adolf Hitler when French, American and British occupied territories were combined to form the Federal Republic of Germany or West Germany. In 1990, the German Democratic Republic, also known as East Germany, was integrated with West Germany. The constitution of 1949 accepted a core trait of the German constitution of 1871 that had integrated Prussia with the remaining German territories, with the exception of Austria. The 1949 constitution also drew traits from the Weimar Constitution of 1919 that enforced a power sharing system between the local and central government. This resulted in a more decentralized form of government.

However, akin to every political, the German form of governance also has its weaknesses and strengths. The biggest of this system is the requirement of a consensus in order to take any decision. As a control mechanism, the Bundesrat is the process that regulates the practices of the Bundestag. Because the legislative and executive processes are closely integrated in the parliamentary form of governance, the Bundesrat has the capacity to regulate or review any legislative process, compensating to the loss of separation.

German International Relations

Germany, being a central European nation and a key member of the European Union, the G20, G8, NATO and the Organisation for Economic Co-operation and Development enjoys diplomatic ties with 190 countries with 229 missions worldwide. The country is regarded as one of the major powers of the world and the European Union due to the mass industrialization.

Economic

Inequality in Society

As is the case with a number of rich nations, poverty in Germany is ...