Back to the project overview

The importance of the German economy for the EU


vbw – Bavarian Business Association



Issue and objective

Cross-border trade within the European Union (EU) has intensified significantly as a result of the European Single Market. The introduction of the common currency, the euro, 20 years ago has further boosted intra-European trade in most EU countries. Due to its size, the German economy is a major driver of economic development throughout the EU. On behalf of the Bavarian Business Association (vbw – Vereinigung der Bayerischen Wirtschaft e. V.), Prognos investigated the extent to which German demand for European goods and services creates added value and employment in other European countries.

Our approach

The study first looks at the extent of Germany's trade relations with EU member states. Based on a multi-regional input-output model, we then estimate the extent to which German demand secures added value and employment in the EU and how these effects have changed since 1999.

Finally, a scenario analysis is performed using the macroeconomic model "VIEW". It provides an estimate of the importance of German import demand for growth dynamics in the EU for selected scenarios of economic development in Germany. This illustrates whether and to what extent countries in the EU benefit from an economically strong Germany.

Core results

Germany sources almost 52 percent of its imports from the EU, followed by Asia (23.6 percent) and the rest of Europe (10.9 percent). Before Brexit, the share of EU imports was even around 56 percent. Since the UK left the EU, however, it now counts as part of the rest of Europe.

Germany is the most important sales market for countries such as the Czech Republic, Poland, Hungary, Romania, and Slovakia. A quarter to a third of all exports from these countries go to Germany. Overall, the EU member states generate 2.2 percent of their gross value added (around 290 billion euros) through exports to Germany.

Stagnating economic development in Germany would have a significant impact on its European neighbours – far more than zero growth in France and Italy, whose trade links with other EU countries are less pronounced.

The results of the study point to the great importance of the German economy as a driving force for the EU. Above all, EU member states in Central-Eastern Europe can benefit from a strong German economy. On the other hand, these countries, e. g. Poland, also contribute significantly to the economic success of the EU.

The study was presented by Dr Michael Böhmer in Munich on 25 May 2022.

Links and Downloads

To the Study (website vbw, German)

To the vbw Press Release (German)

Project team

Dr Andreas Sachs, Eva Willer, Jan Limbers

Do you have questions?

Your contact at Prognos

Dr Andreas Sachs

Project Manager

View profile

Dr Michael Böhmer

Chief Economist, Head of Corporate Solutions

View profile

Mehr Studien & Projekte zu diesem Thema

More studies & projects on this topic

Accelerated climate protection does pay off

| Project

If the expansion of renewable energy and the implementation of efficiency measures are ac-celerated, electricity prices will fall more quickly, and the GDP will grow faster. These were the findings of our short study for the INSM.

DG REGIO – Evaluation of the European Green Deal

| Project

How effective has the EU cohesion policy been in driving green change in Europe? This and other questions are being investigated jointly with COWI, Milieu, and CSIL, on behalf of the European Commission (DG REGIO).

Germany’s business model 2023

| Project

Why politicians and companies need to act consistently - and how they can do so. Joint study with BayernLB.

Inflation – extra burden and relief for family households

| Project

Calculations on inflation-related additional private household expenditure and the work of the Federal Government's relief package.

The effects of Chinese subsidies on Germany

| Project

Prognos examined the potential impact of Chinese subsidy practices on Germany in three core sectors of the German economy.

Resilient supply chains in the EU

| Project

What are possible solutions when supply chains are disrupted due to external shocks? A survey conducted for the European Commission as part of the European Cluster Collaboration Platform provides answers.

Innovation Index Germany

| Project

How does the expansion of the digital infrastructure affect regional innovation strength? The IID.2022 provides clarification.

The world negotiates on climate

| News

On Sunday, the 27th UN Climate Change Conference (COP27) begins. Various media sources have picked up on Prognos’ studies and expertise.

Change through trade? But with oomph!

| News

The Communist Party in China meets for the 20th time, shortly after, Chancellor Olaf Scholz travels to Beijing for his inaugural visit. What a fitting opportunity to shake up German foreign trade policy. An appeal by Christian Böllhoff.

Disruption to gas supply – consequences for the brick industry

| Project

A study of the production, value-added, and price effects on and through the brick and tile industry in Germany for the Federal Association of the German Brick and Tile Industry.

About us

Prognos – Providing Orientation.

Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound.

Learn more