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Germany’s business fundamentals, while facing long term demographic challenges, remain quite sound. Europe’s largest economy benefits from a highly skilled work force, a large capital stock, a low level of corruption and a high level of innovation. Relatively poor in domestic energy and raw materials (with the exception of lignite and potash salt), Germany utilizes its highly qualified labour force to engineer and produce value-added goods and services for export. The world’s largest exporter from 2003 to 2008, it is a leading producer of machinery, vehicles, chemicals, household equipment, as well as wind turbines and solar power technology. Of the Fortune Global 500 largest companies, 37 are headquartered in Germany. And despite its strengths, Europe’s beacon of stability faces its own challenges. As a net beneficiary of a globalized economy, it is sensitive to consumer demand in foreign markets. At home, German business is also adversely affected by long-term pressures on sustained growth – in particular, a declining population due to low fertility rates and falling net immigration.

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