Economy in Germany

Country Data Germany

Germany is a founding member of the European Union, with Berlin as its capital and German as its official EU language. It has been part of the EU since 1 January 1958 and adopted the euro in 1999 as a founding member of the euro area. Germany has also participated in the Schengen area since 1995, enabling free movement across much of Europe. With its large geographic size, population, and high GDP per capita measured in purchasing power standards, Germany stands as the EU’s largest economy and one of its most influential member states.

Politically, Germany is organised as a federal parliamentary republic. Executive power is led by the chancellor, who heads the government, while the president serves as head of state with primarily representative and ceremonial duties. The federal structure consists of 16 states (Länder), each with its own constitution and a high degree of autonomy in internal affairs. Three of these states—Berlin, Hamburg, and Bremen—are city-states, reflecting Germany’s historically decentralised system of governance.

Germany’s economy is highly diversified and strongly export-oriented. In 2020, industry formed the backbone of economic activity, reflecting Germany’s global strength in manufacturing, engineering, and industrial technology. Public administration, defence, education, healthcare, and social services represented another substantial share, while wholesale and retail trade, transport, accommodation, and food services also played an important role. Trade relations are deeply integrated within the European Union, which accounts for more than half of German exports. France and the Netherlands are among the most important EU export partners, while the United States and China represent Germany’s largest markets outside Europe. Imports follow a similar pattern, with the majority sourced from EU member states—particularly the Netherlands, France, Poland, and Belgium—alongside significant volumes from China and the United States.

Within the European Union, Germany plays a central institutional and political role. It is represented by 96 Members of the European Parliament, the largest national delegation, reflecting its population size and political weight. German government representatives actively participate in the Council of the European Union, contributing to the formulation, negotiation, and adoption of EU legislation and policy coordination across all major areas. Germany has also held the rotating Presidency of the Council of the EU numerous times since the early years of European integration, underscoring its long-standing leadership role within the Union.

At the European Commission level, Germany is prominently represented, with Ursula von der Leyen currently serving as President of the European Commission. The Commission maintains an official presence in Germany, supporting engagement between EU institutions, national authorities, and the public. Germany is also strongly represented in EU advisory bodies, with 24 members on the European Economic and Social Committee and 23 representatives on the European Committee of the Regions, ensuring that social, economic, and regional interests are well reflected in EU policymaking.

Germany maintains a permanent representation to the European Union in Brussels, which serves as the primary channel for communication with EU institutions and for advancing German positions within the EU framework. As the EU’s largest economy, Germany contributes a significant share to the EU budget in line with its economic capacity. These contributions help finance EU-wide programmes and projects that support innovation, infrastructure, environmental protection, social cohesion, and economic development across all member states, reflecting Germany’s central role in advancing shared European priorities.