Population 82.5 million
GDP 42,177 US$
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major macro economic indicators

Main economic indicators 2015 2016 2017(f) 2018(f)
GDP growth (%) 1.5 1.9 2.5 2.1
Inflation (yearly average, %) 0.1 0.4 1.6 1.5
Budget balance (% GDP) 0.6 0.8 0.7 0.8
Current account balance (% GDP) 8.5 8.3 8.1 7.7
Public debt (% GDP) 70.9 68.1 65.0 61.8


(f): forecast


  • Solid industrial base (more than 20% of GDP)
  • Low structural unemployment; well-developed apprenticeship system
  • Geographic diversification of exports
  • Strong competitiveness
  • Importance of family-owned exporting SMEs (Mittelstand)
  • Integration of Central and Eastern Europe in production process
  • Importance of the ports of Hamburg, Bremerhaven and Kiel
  • Institutional system promoting representativeness and consensus


  • Ageing infrastructure
  • Demographic decline, partially 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 in Eastern Länder
  • Weak productivity of services
  • Low start-up activity

Risk assessment

Dynamic growth will continue in 2018

The German economy had a very good year in 2017, and the outlook remains positive for 2018. Economic growth is expected to remain above estimates for potential growth (approximately 1.5%). As a consequence, Germany is expected to experience an upswing for the ninth consecutive year. Economic growth is especially driven by internal demand.

One of the key factor’s to this success is the strength of the labour market, which has seen increasing employment and dynamic gains in incomes. In late 2017, the amount of open positions stood at 1.1 million: an all-time high. Labour demand is especially high in the trade, education, and health sectors, accompanied by high levels of demand in manufacturing industries and for part-time workers. Therefore, by the end of 2018, the threshold of 45 million people in employment could be reached for the first time ever, with the unemployment rate set to continue its downward trend towards 5%. In addition to this, export growth picked up in 2017 and will likely remain dynamic in 2018 as well, due to the broad-based upswing in the world economy.

Growth in public consumption will likely slow with a drop in the number of refugees taken in, but public investment in social housing and infrastructure will probably continue, accompanied by a probable strong growth in the construction of private homes. In contrast, business investment in equipment and buildings is set to pick up very gradually, despite the high rate of production capacity utilisation, against a background of continued uncertainties, especially from the external environment (e.g. Brexit, because the UK is among Germany’s top-five trade partners). Given the much stronger import growth linked to lively domestic demand and the stabilisation of trade terms, trade’s contribution to growth is expected to be close to zero. In this environment, German businesses’ payment behaviour will likely remain generally good. The number of insolvencies is expected to fall by about 5% (after a drop of more than 7% in 2017).


Public and external accounts in surplus

Despite slight fiscal loosening against a background of expected tax relief for households, higher pension obligations, and higher spending on transport, energy and early childhood services, the public balance will continue to show a small surplus, due to ongoing strong growth in taxes and social contributions. The maintenance of a significant primary surplus (i.e. excluding debt interest) and of a positive differential between growth and the average interest rate should result in another reduction in the debt burden. Although slightly lower, the current account balance is set to remain broadly in surplus thanks to a massive trade surplus. The balance of services traditionally posts a deficit, especially due to tourism. The income balance is expected to remain in surplus with income from investments abroad, which are increasing due to recurring current surpluses, exceeding remittances sent overseas by emigrants and investors.


Political uncertainty

After general elections in September 2017, the Germans have been faced with the longest negotiations to forming a new government since the Second World War (WWII). After the failure of exploratory talks between the two conservative parties – the Liberal Party, and the Green Party – new talks began at the start of 2018 between the Conservatives and the Social-Democrats to again form a Grand Coalition. If inconclusive, new elections could take place in the spring. The weak election results of the conservative parties and widespread political tendencies in the new parliament have significantly weakened Chancellor Angela Merkel’s position. Far-reaching reforms, also in the area of economic policy, are unlikely to take place, as room for consensus-building will be contained – even after new elections. Due to sound public finances, there is some room for tax relief and higher expenditures. Nevertheless, the next government – which could even be a minority one for the first time in Germany’s history after WWII – could be quite fragile.


Last update : January 2018


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
Naar boven
  • Nederlands