Germanys current form of government ” democratic federal republic parliamentary” system. Federal republic of Germany originated in 1945 but was not the government for all of Germany till it was united in 1990. It comprises of 16 states after the merger of the West and the East government of Germany following constitution “GRUNDGESETZ” of the West Germany. The president is a only a position to nominate the ” Chancellor” who is the head of the government. In turn the chancellor recommends or dismiss members of the federal cabinet who help him in the governing of the country. The country is divided into sixteen states who are represented by “Bundesrat” occupying an total number of sixty-nine seats. All constitutional initiatives must first be sent to bundesrat and must pass by 2/3rd votes. The “Bundestag” is the federal assembly which is directly elected by the citizens which consists of 614 seats. The legal body is the Federal constitutional court which makes the supreme court decisions.
Germany political influence over foreign business:
Germany while giving a strong global boast to numerous international businesses faces many challenges of overcoming its “post-writschaftwunder state” and also struggling with high tax rates and unemployment. After the world war the government forced companies to invest in one and other which led to companies too compile a long time planning yielding low profits. Late in 2002 Germany’s parliament ended the capital gain and cross holding giving freedom to companies to invest freely. Ever since the country’s growth has been significant to a position of business leader.
Germany political risk and expropriation:
Germany has stable government with minimum political risk for international business, the corruption level in the country is very low. The policies of the government provide little risk to business expropriation. The judicial system upholds the law and is fair with the foreign business. There seizer of assets and property by the government has not to be feared without a compensation or post-uninfected. Although eminent laws do exist specifically article 14 paragraph 3 of German law which discusses basic rights of property which apply to both individuals and businesses. The law states that “expropriation shall only be permissible for the public good and it may only be ordered by or pursuant to a law that determined by establishing an equitable balance between the public interest and the interests of those affected.” German laws provide property protection laws and by the European union. The European union treaty allows violation of the laws can be brought to European court of justice”.
Even though the country has booming business overall its economy is suffering. The main reason being that the small and medium industries are not prospering its people are more of a saver than spending which is the main reason hurting the economy. Later in 2003 France and Germany supported the USA in the campaign against Iraq hoping it would boost the economy. This strategy was based upon the theory of “Broken Window fallacy by Henry Hazlitt’s Economy” but it failed. Over all the war brought down the economy. Germany has always been a proud country not allowing other countries to boss them or interfere in their politics after their loss in the world war II they renewed their ideas and moved to a more political and business module allowing them to gain status in trade control and even government sanctioned control over businesses.
Assessing the German politics Germany does have companies and business it protects but on the whole it is safe environment for international business and investment. Leading the economy in the European union its political system is open to international business and investors. As in all Germany has low political risk.
Germany’s legal system
Germany’s legal structure:
Germany’s legal structure starts with the constitution known as the basic law which holds two major function it insures the rights of the individuals as well as establishes the bodies of government for the land. The traditional system Germany follows is know as the civil law system, there no precedent set by the judicial rule. The civil law follows a system of codes which consists of five “civil, civil procedure, commercial, and criminal procedure” these code are further divided into five books which includes the general part, obligations, properties, family, and inheritance. The judicial system has to also obey the laws set up by the European union as it is part of the organization. The courts are divided into three category the ordinary courts, the specialized courts, and the constitutional court the highest court in each category is called federal court. The federal court of justice also know as “Bundesgerichtshf” is the last court of appeal for a review. The federal constitutional court also know as “bundesverfassungsgericht” only hears matters dealing with constitutional rights. The constitutional court is divided into two divisions dealing with two different halves of the constitution.
German laws:
German tax law is a very complicated and constantly changing and but Germany has many tax deduction laws which help but it only depends on the companies tax advisors knowledge and loyalty. The tax includes social insurance, a wage tax and a solidarity tax. Ten percent of the writing on taxation is on Germany tax laws. The social tax is equivalent to twenty one percent of the total taxable income which pays for the healthcare and social services. The employer must pay the social tax that matches the amount the employee pays to the government as well. The wage tax is based on the income the personal and it is divided into three ranges. The deduction on these taxes vary and complicated and it mainly helps the rich who are able to meet the requirement. Which is why the government is criticized for its taxation law.