Internal Developments in the West

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Economic developments in the FRG

Erhard

  • 1964 - Wages increase by 8.5%, production increases by 8% and inflation was at 2.5%. No unemployment.
  • 1966 - Economic recession started in the coal industry and spread. Public expenditure outstripped income. 
  • Accused of overspending on railways and military equipment. Subsidation of agriculture costly. Higher wages caused inflation.
  • Tried to cut expenditure by 10% but Trade Unions were demanding shorter weeks and so could not increase working hours.

Keisinger

  • Federal government given powers to raise loans, alter taxes and build funds for investment in properous times.
  • Central  government had new powers to control spending and tax policies of individual regions
  • More cooperation between central and state government in expanding higher education, agriculture, health and infrastructure.
  • Public spending cut and taxes raised.
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Economic developments in the FRG 2

  • 1967 : Budget was balanced
  • 1968: Unemployment down, Industrial growth at 6%
  • 1969: Inflationfalls to 1.5%

Brandt

  • Money from investors poured in to the FRG so banks gave credit on easy terms - more money in circulation. This created higher prices and so workers demanded higher wages, which increased by 145%.
  • 1971 - 1973: Non-oil commodities increased in price by 70%, and food by 100%. 1973 - the OEPC doubled the prices of oil and the FRG paid 17 billion more for imports leading to a strike in January 1974.

Schmidt

  • Created more jobs - reduced tax and increased Child allowances. Inflation was down to 6% and growth was at 4%. In 1975 unemployment was at 1 million, so expernditure was cut and tax conditions reduced
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Economic developments in the FRG 3

  • 1979: Shah of Iran was overthrown - 150% was added to the price of oil. The FRG didn't suffer as much as other European countries - inflation was at 4.7% between 73-79. Unemployment was never beyond 8%. Guest workers were not taken into account.

Kohl

  • Return to Social Market Economy
  • Spending cuts,  budget increases down
  • Oil prices fell in 1985 - exports increased.
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Political developments in the FRG

Erhard

  • 1965: CDU vote at 47.6%
  • Neo-Nazi National Democratic party won seats but not enough for national government
  • Coalition couldn't agree on how to deal with economical issues. CDU wanted to increase tax while the FDP wanted to cut spending
  • 1966: Erhard resigns.

Keisinger

  • CDU + SPD. The FDP argued that Germany was now a one party state due to huge majority.
  • 1968: Allowance of an elected committee to give emergancy powers during civil unrest combined with Keisinger's Nazi past and the fact that democracy appeared under threat meant that the German Communist party was once again allowed to form..
  • SPD + CDU could not agree over welfare reforms and foreign policy.

Brandt

  • Terrorism forced Brandt to pass harsh measures against terrorists, this stirred up critisism from the young branch of the SPD
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Political developments in the FRG 2

  • Ostpolitik caused a split in the government - only just survived a vote of no confidence using bribery
  • Gunter Guillaume affair - GDR spy.
  • 1968 - 1969 -  protests about veitnam, atom bombs and coalition.
  • 1972 - Brandt forced to pass legislation against carrying arms, storing ammo and drugs.

Schmidt

  • 1977: Mogadishu incident - refused to give into terrorists.
  • Challenges from the green party over runways and nuclear power.

Kohl

  • Damaged by Sleaze 
  • Bitberg Affair
  • 1987: CDU vote down again.
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Social Developments in the FRG

Erhard

  • 1964: Unemployment was non-existant

Brandt

  • Pensions raised 5% and for the war wounded up to 20%. Sickness  benefit went up 9.5%. 1972 Pensions Act - pensions less dependant on financial contributions. Health insurance was improved, Towns Planning Act introduced
  • Expenditure on education  and scientific research raised by 300%. School leaving age raised. 1971 Education support Law made grants available to allow students from poorer countries to continue their education.
  • Allowances for training,  Refugees from the GDR increased, Social Housing budget increased by 36%. Funding for railways increased by 14%. Increased grants for sport. Factory Management Law Jan 1972 gave workers more say, increased power to workers councils.
  • Voting age lowered to 18.
  • Equality of the sexes promoted, abortion becomes easier and criminal law was reformed to be less harsh.
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