3.3.3

Surviving the Recession, 1960-1969

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Impact of the Recession

In the first half of the 1960s, several countries were hit by a recession.

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The Recession

  • West Germany was affected by a recession in the 1960s.
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Impact on employment

  • The unemployment rate in the Federal Republic grew to 3.8%.
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Impact on inflation

  • The inflation rate grew to 4% in the mid-1960s.
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Impact on the economy

  • Whilst the inflation and unemployment figures were not extremely high, they marked a break from the growth experienced during the economic miracle.
  • There was a fall in confidence in the West German economy.
  • This was accompanied by an economic downturn.

The Grand Coalition Addressing the Recession

Erhard had largely resigned due to the economic problems in West Germany. The Grand Coalition was formed to bring the FRG out of the recession.

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Karl Schiller

  • The Grand Coalition’s economic policies were led by the Economics Minister, Karl Schiller.
  • Karl Schiller was a member of the SPD.
  • Schiller sought to make the FRG’s economy more planned (as opposed to a free market economy).
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Legislation

  • The Stabilisation Law was passed in 1967.
  • This aimed to formalise cooperation between the federal government, trade unions, and employers.
  • This legislation enabled the government to increase its power to achieve economic stability (through changing taxes or raising loans).
  • The Bundestag (1967) on the purpose of the Stabilisation Law: “These measures shall be taken in such a way that they will, within the framework of the market economy, simultaneously help to stabilize prices, maintain a high level of employment, and achieve external balance, accompanied by steady and adequate economic growth.”
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The government’s budget

  • The FRG sought to improve its government budget.
  • Public expenditure was reduced.
  • Taxes were increased.
    • E.g. VAT rose by 2%.

Brandt's Government Addressing Economic Challenges

The Grand Coalition collapsed in 1969. Willy Brandt set up a new government and addressed the FRG’s currency.

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Reasons for the failure of the Grand Coalition

  • There was high demand for the FRG’s currency, the Deutschmark, towards the end of the 1960s.
  • This was because people sought Federal Republic exports.
  • The Grand Coalition was divided over how to revalue the currency.
Illustrative background for Revaluation of the DeutschmarkIllustrative background for Revaluation of the Deutschmark ?? "content

Revaluation of the Deutschmark

  • Under Brandt, the value of the Deutschmark was raised by over 9%.
  • This meant the Federal Republic had a strong currency.
  • This increased the price of West German exports. However, this did not significantly damage the Federal Republic’s balance of payments as West German exports had a well established reputation.

Jump to other topics

1Political & Governmental Change, 1918-1989

1.1Creation & Collapse of Weimar, 1918-1932

1.1.1Creation of a Republic

1.1.2Strengths & Weaknesses of Weimar Constitution

1.1.3Overcoming Challenges to the Constitution

1.1.4The Great Depression

1.1.5The Collapse of Democracy

1.1.6The Collapse of Democracy 2

1.1.7Hitler Becomes Chancellor

1.2Nazi Dictatorship, 1933-1945

1.2.1Establishing a Dictatorship

1.2.2Consolidating Power

1.2.3Nature of Government

1.2.4Government in Wartime

1.2.5Top Grade AO2/3 - Political & Governmental Change

1.3Return to Democratic Government, 1945-1989

1.3.1Creation of the FRG, 1945-1949

1.3.2Consolidation Under Adenauer

1.3.3Consolidation Under Erhard

1.3.4Maintaining Stability Under Brandt

1.3.5Maintaining Stability Under Schmidt

1.3.6Maintaining Stability Under Kohl

1.3.7Top Grade AO2/3 - Return to Democratic Government

2Opposition, Control & Consent 1918-1989

2.1Opposition to Government, 1918-1989

2.1.1Impact of Versailles

2.1.2Political Extremism & Crises, 1918-1932

2.1.3Opposition & Dissent in Nazi Germany, 1933-1945

2.1.4Political Dissent from the Left, 1949-1989

2.1.5Political Dissent from the Right, 1949-1989

2.1.6Top Grade AO2/3 - Opposition to Government 1918-89

2.2Controlling the People, 1918-1989

2.2.1Attempts to Control Extremism

2.2.2Repression, 1933-1945

2.2.3Censorship & Propaganda, 1933-1945

2.2.4De-Nazification Policies of Western Allies, 1945

2.2.5Constitutional & Legal Response to Extremism, 1949

2.3Popular Support, 1918-1989

2.3.1The Nature of Support for the Weimar Government

2.3.2Support for the Nazi Regime

2.3.3The Nature of Support for Democracy, 1945-1989

2.3.4Top Grade AO2/3 - Controlling the People

3Economic Developments & Policies, 1918-1989

3.1Reacting to Economic Challenges, 1918-1932

3.1.1Economic Crises & Government Response, 1918-1923

3.1.2Economic Loans, 1924-1928

3.1.3Policies for Recovery, 1924-1929

3.1.4The Great Depression

3.1.5Change in Living Standards

3.1.6Top Grade AO2/3 - Reacting to Economic Challenges

3.2Controlling the Economy, 1933-1945

3.2.1Attempting Economic Recovery

3.2.2Creating a Command Economy

3.2.3Change in Living Standards

3.2.4Impact of War

3.2.5Impact of War 2

3.2.6Top Grade AO2/3 - Controlling the Economy

3.3Creating the Social Market Economy, 1945-1989

3.3.1Economic Recovery, 1945-1955

3.3.2The Economic Miracle, 1955-1966

3.3.3Surviving the Recession, 1960-1969

3.3.4The Oil Crisis

3.3.5Integration into the European Economy

3.3.6Change in Living Standards

3.3.7Top Grade AO2/3 - Creating Social Market Economy

4Aspects of Life, 1918-1989

4.1Attitudes Towards Women, 1918-1989

4.1.1Role & Status of Women in the Weimar Republic

4.1.2Impact of Kinder, Küche, Kirche

4.1.3Impact of WW2 on Women

4.1.4Role & Status of Women in the FRG

4.1.5Top Grade AO2/3 - Attitudes Towards Women

4.2Education & Cultural Developments, 1918-1989

4.2.1Education in Weimar

4.2.2Cultural Experimentation in Weimar

4.2.3Education Under the Nazis

4.2.4Nazi Culture

4.2.5Education in the FRG

4.2.6Generational Conflict

4.2.7Top Grade AO2/3 - Education & Cultural Development

4.3Position of Ethnic Minorities, 19189-1989

4.3.1Ethnic Minorities in the Weimar Republic

4.3.2Nazi Racial Policies, 1933-1939

4.3.3Nazi Racial Policies During the War

4.3.4Ethnic Minorities in the FRG

4.3.5Top Grade AO2/3 - Position of Ethnic Minorities

5Historical Interpretations

5.1Influence of German History

5.1.1Influence of German History

5.2Hitler & Foreign Policy

5.2.1Hitler & Foreign Policy

5.3Contribution of Other Nations to WW2

5.3.1Weak Nations

5.3.2Appeasement

5.3.3The Rise of Fascism

5.4Reasons for Invading Poland

5.4.1Reasons for Invading Poland

5.4.2Top Grade AO2/3 - Historical Interpretation

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The Economic Miracle, 1955-1966

The Oil Crisis