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Germany - Background
As Europe's largest economy and most populous nation, Germany remains a key
member of the continent's economic, political, and defense organizations. European
power struggles immersed Germany in two devastating World Wars in the first
half of the 20th century and left the country occupied by the victorious Allied
powers of the US, UK, France, and the Soviet Union in 1945. 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. The decline of the USSR and the end of the
Cold War allowed for German unification in 1990. Since then, Germany has expended
considerable funds to bring Eastern productivity and wages up to Western standards.
In January 1999, Germany and 10 other EU countries introduced a common European
exchange currency, the euro.