With the advent of the Cold War, two German states were formed in 1949: the western Federal Republic of Germany (FRG) and the eastern German Democratic Republic (GDR).The democratic FRG embedded itself in key western economic and security organizations, the EC, which became the EU, and NATO, while the communist GDR was on the front line of the Soviet-led Warsaw Pact.
A constitutional amendment approved in 2009 limits the federal government to structural deficits of no more than 0.35% of GDP per annum as of 2016, though the target was already reached in 2012.
The German economy suffers from low levels of investment, and a government plan to invest 15 billion euros during 2016-18, largely in infrastructure, is intended to spur needed private investment.
The German Government introduced a minimum wage in 2015 that increased to $9.79 (8.84 euros) on 1 January 2017.
Stimulus and stabilization efforts initiated in 20 and tax cuts introduced in Chancellor Angela MERKEL's second term increased Germany's total budget deficit - including federal, state, and municipal - to 4.1% in 2010, but slower spending and higher tax revenues reduced the deficit to 0.8% in 2011 and in 2016 Germany reached a budget surplus of 0.6%.
The decline of the USSR and the end of the Cold War allowed for German reunification in 1990.
Since then, Germany has expended considerable funds to bring eastern productivity and wages up to western standards.
Following the March 2011 Fukushima nuclear disaster, Chancellor Angela MERKEL announced in May 2011 that eight of the country's 17 nuclear reactors would be shut down immediately and the remaining plants would close by 2022.
Germany plans to replace nuclear power largely with renewable energy, which accounted for 29.5% of gross electricity consumption in 2016, up from 9% in 2000.
In 2008, the global financial crisis hit the economy particularly hard, due to the importance of its financial sector.