The three pillars of Frankfurt’s economy are finance, transport, and trade fairs. Frankfurt has been Germany’s financial capital for centuries, and it is the home of a number of major banks and brokerages. The Frankfurt Stock Exchange is by far Germany’s largest, and one of the world’s most important. Frankfurt is also the seat of the European Central Bank which sets monetary policy for the Eurozone economy, and of the German Bundesbank. A number of major German commercial banks, including Deutsche Bank, Dresdner Bank, and Commerzbank, have their seats in Frankfurt.
Being such a commerce-minded city, and a major transportation hub, has made Frankfurt the trade show and convention epicenter of Europe since the 13th century. Trade fairs continue to be big business for the city.
Germany is the largest economy in Europe and the third largest economy in the world, behind the United States and Japan. It is ranked fifth in the world in terms of purchasing power parity. The export of goods is an essential part of the German economy and one of the main factors of its wealth. According to the World Trade Organization, Germany is the world’s top exporter with $912 billion exported in 2005 (Germany’s exports to other Eurozone countries are included in this total). It is second in imports only to the United States and has a large trade surplus (160.6 billion euros in 2005). In the trade of services (tourism, financial services, engineering, etc) it ranks second behind the United States. Most of the country’s exports are in engineering, especially in automobiles, machinery, and chemical goods. In terms of total capacity to generate electricity from wind power, Germany is first in the world and it is also the main exporter of wind turbines.
Although problems created by the German Reunification of 1990 have begun to diminish, the standard of living remains higher in the western half of the country. Germans continue to be concerned about a relatively high level of unemployment, especially in the former East German states where unemployment tops 18%. In spite of its extremely good performance in international trade, domestic demand has stalled for many years because of stagnating wages and consumer insecurity. Germany’s government runs a restrictive fiscal policy and has cut numerous regular jobs in the public sector. But while regular employment in the public sector shrank, “irregular” government employment such as “one euro” jobs (temporary low-wage positions), government supported self-employment, and job training increased.