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 the country
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 2002, Germany and 11 other EU
countries introduced a common European currency, the euro.