Social Insurance in Germany

Germany has one of the most comprehensive and generous systems of health, old age, disability, and unemployment insurance in the world. Basic universal healthcare and old age and disability pensions are financed equally by employer and employee contributions. Long-term nursing care for the elderly is financed by payroll taxes. Parliament sets the rates of these insurance programs, which are administered by boards staffed by trade unions and employers’ associations. The German welfare state began in the 1880s with Chancellor Otto von Bismarck’s old age and disability insurance, and it has always enjoyed broad support. With the birth of West Germany in 1949, the welfare programs continued to grow as the result of a social partnership between business and labor, and the economic policies of the CDU/CSU governments.

These programs were based on the belief that a well-ordered welfare state can be highly productive at the same time that it takes care of its weaker members. Such generous benefits, however, depend upon high tax rates.

Germany is a member of numerous European and international groups. It is a member of the North Atlantic Treaty Organization (NATO), to which West Germany’s external security has been tied since 1955. As a condition for remaining in NATO following reunification, Germany reduced the size of its already limited armed forces and continued to forswear the production and use of nuclear, biological, and chemical weapons. Together with France, Germany has played a leading role in the European Union (EU). Under EU auspices, Germany has pressed for a more unified and cooperative Europe in economic, political, and security affairs.

Both Germanys were members of the United Nations (UN), and united Germany joined the UN in 1990. Germany also participates in UN agencies such as the International Atomic Energy Agency (IAEA), the International Labor Organization (ILO), the International Telecommunications Union (ITU), and the United Nations Educational, Scientific, and Cultural Organization (UNESCO). Germany belongs to the World Health Organization (WHO), the Communications Satellite Corporation (INTELSAT), and Interpol (the International Criminal Police Organization).

Encarta

François Mitterand and Helmut Khol