Wirtschaftswunder

At the founding of the European Common Market in 1957, West Germany's economic growth stood in contrast to the struggling conditions at the time in the United Kingdom.

This small capital stock was compounded by the difficulty in converting the German economy to the production of civilian goods, as well as rampant monetary and regulatory problems, leading to an unusually low economic output during the first post-war years.

These initial problems were overcome by the time of the currency reform of 1948, which replaced the Reichsmark with the Deutsche Mark as legal tender, halting rampant inflation.

Walter Heller, a young economist with the U.S. occupation forces who was later to become chairman of the Council of Economic Advisers under President of the United States John F. Kennedy, wrote in 1949 that to "remove the repressive effect of extremely high rates, Military Government Law No.

This move was conducted without the permission of the Allied occupying powers, and was opposed by the Social Democratic Party, most West German manufacturing interests, and according to Erhard, at least some of his own advisers.

As noted by the British journalist Terence Prittie in the early 1960s: Today the German working-man leads a comfortable life and wears a well-filled waistcoat.

David Eversley wrote: As real incomes rose, so public authorities were enabled (and indeed encouraged) to raise funds, both from taxation and through borrowing, to accelerate the rate of investment and current spending in projects which are partly immediately productive, partly conducive to the creation of the good life, as seen in Germany ... Any superficial examination of the German townscape, let alone perusal of the statistics, shows that Germany has spent sums on hospitals, libraries, theaters, schools, parks, railway-stations, socially-aided housing, underground railways, airports, museums, and so on which are simply not to be compared with British efforts in this direction.

From 1962 to 1973, the percentage of households with refrigerators rose from 52% to 93,% with vacuum cleaners from 65% to 91%, with television sets from 34% to 87%, and with cars from 27% to 55.%[12] In addition to the physical barriers that had to be overcome for the West German economic recovery, there were also intellectual challenges.

[14][15][16] During the more than two years that this policy was in place, new industrial research in Germany was hampered because it was unprotected and freely available to overseas competitors, encouraged by occupation authorities to access all records and facilities.

The Marshall Plan was only extended to Western Germany after it was realized the suppression of its economy was holding back the recovery of other European countries and was not the main force behind the Wirtschaftswunder.

Apart from these factors, hard work and long hours at full capacity among the population in the 1950s, 1960s and early 1970s and extra labour supplied by thousands of Gastarbeiter ("guest workers", since the late 1950s) provided a vital base for the sustainment of the economic upturn with additional workforce.

Through the nationalisation of key industries (VOEST, AMAG, Steyr-Puch) and yet more long working hours,[clarification needed] full economic capacity was reached.

This economic policy was known in journalistic circles as the Raab-Kamitz-Kurs, named after Julius Raab, Austrian chancellor from 1953, and his Finance Minister Reinhard Kamitz similar to the West German Adenauer-Erhard-Kurs.