Commercial exchanges between France and Germany
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It is generally acknowledged that the opening of economies is a growth factor. The economic history of France provides an illustration between 1945 and 1973. However, for 150 years, there have been anomalies, where we have seen a large deceleration of the economy in the nineteenth century, since 1973.
As European countries are the main partners of the French economy and these countries are stakeholders in the process of regionalization, it is interesting to understand how the opening of the French economy to these countries including Germany has influenced France's economic growth. A historical analysis of each country and its economy gives us an initial answer, and then we test the co-integration relationship between growth and trade between France and Germany.
Germany and France are both countries with a long rich history and a radiant civilization, and friendship between both peoples goes back far into history. Currently, the Franco-German relations maintain a good momentum of development through the exchange of visits between leaders, and intensive contact between persons of different levels.
The bilateral economic and trade exchanges, which continued to develop, had become one of the most important aspects to push forward the cooperation and friendship between France and Germany. GDP growth in Germany has been only 0.9% in 2005, a result insufficient to ensure a recovery in employment: Since 2001, the near stagnation of the German economy (0.8% growth in 2001, 0.1% in 2002, -0.1% in 2003 and 1.6% in 2004) is mainly due to weak domestic demand.
The performance of foreign trade on the other hand allowed Germany to avoid a recession. 2006 is expected to grow stronger: the German government has adjusted its growth forecast in January and is now focusing on a rate of 1.4%. The German institutes of economic advance, for their part, the assumption of growth of between 1.5 and 1.8%.
The fiscal deficit has been 3.3% in 2005. Germany and beyond for the fourth consecutive year the 3%. To fight against the budget deficit, a draft "Law to budget" was adopted by the Cabinet which organizes the recovery of three of the VAT and the stability program of Germany, which summarizes the strategy fiscal consolidation the government until 2009 and is back below the budget deficit of 3% from 2007.
Germany should therefore be able to demonstrate an improvement in the deficit of 1% over the period 2006-2007, which would enable it to comply with the recommendations of the European Commission. This has given up on 1 March 2006 to tighten the excessive deficit procedure against Germany and agreed to evaluate the efforts of Germany over two years (planned deficit reduction of 1% on 2006 2007), and not one year as he was originally scheduled (mandatory reduction in the deficit of -0.5% per year).
Germany posted a trade surplus in 2005, dramatically higher than 150 billion euros that the place again at the forefront of exporting nations (2003, Germany became the world's leading exporter to the United States and well ahead Japan, China and France). These results are explained by a combination of geographic and sectoral segmentation and by judicious efforts on production costs.
Tags: France; Germany; commercial exchange; economy of France and Germany