Why it’s so nice to live next door to Germany

Economy8 Jan ’23 at 14:14Author of the book: Mark VanHarveldt

With an area of ​​357,580 square kilometers, a population of 83 million and a GDP of 3.346 billion euros, the Federal Republic of Germany is the fourth largest economy in the world. After USA, China and Japan. Germany is the world’s largest exporter of goods and services, after China and the United States. We live next door! We derive much of our prosperity from our very strategic location next to Germany.

With an area of ​​357,580 square kilometers, a population of 83 million and a GDP of 3.346 billion euros, the Federal Republic of Germany is the fourth largest economy in the world.  We live next door!  We derive much of our prosperity from our very strategic location next to Germany.
With an area of ​​357,580 square kilometers, a population of 83 million and a GDP of 3.346 billion euros, the Federal Republic of Germany is the fourth largest economy in the world. We live next door! We derive much of our prosperity from our very strategic location next to Germany. (AP)

It is a rule of thumb in international (trade) relations: if you have a small domestic, you have a large foreign country. For the Netherlands, that foreign country is called Germany. We maintain close relations with our largest neighbors in all respects. With a trade volume of €172 billion in 2020, the Dutch-German trade relationship is one of the largest in the world, so the German and Dutch economies are strongly intertwined.

Germany is our most important trading partner. Thanks to the port of Rotterdam, the Netherlands is the most important transit country in the European Union, not only in terms of exports and imports. Germany is a very important transit country to other European countries.

Largest export partner

After China, the Netherlands is the most important supplier of goods to Germany. In 2021, we exported 133.4 billion euros worth of goods to our big eastern neighbors, up from 106.8 billion a year ago. Among these exports, the top 5 are crude oil and petroleum products, electrical appliances, fruits and vegetables, various manufacturers and telecommunication equipment. That 133 billion is relatively large: in 2021 we exported about 63 billion to our second export partner, Belgium, and about 38 billion to the British.

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A fourth import partner

Conversely, we also import what we need from Germany: more than 92 billion euros in 2021. The top 5 are road transport vehicles, electrical equipment, special machinery, medical and pharmaceutical products and miscellaneous machinery. This makes it the fourth largest importer of German goods. The largest is in the United States with almost 122 billion euros, followed by China (103.6 billion) and France (102 billion).

What else do we get from Germany: food and live animals, beverages and tobacco, raw materials, mineral fuels, animal and vegetable oils and numerous chemical products. In short, everything that makes a country run.

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Services

Both Germany and the Netherlands have an important service sector. Important? Both countries earn about 70 percent of their GDP. Think of the banking sector, insurance companies and transport and logistics companies, services that are exported. In 2020, we exported €27.5 billion worth of services to Germany and imported €22.2 billion. These include transport services, telecommunications and computer services, industrial services, travel, construction services and financial services.

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border

We share about 576 kilometers of border with the Germans. There is free movement of goods, services, capital and people, and we have a common currency. Hence the economic potential of this border region is high.

The Netherlands borders the two German states of Lower Saxony and North Rhine-Westphalia, the Netherlands’ most important trading partner, with more than 70,000 Dutch residents. Together with the states of Baden-Württemberg, Lower Saxony and Bavaria, North Rhine-Westphalia accounts for more than 85 percent of Dutch-German trade.

Apart from permanent reciprocal residence (more than 150,000 compatriots live throughout Germany, approximately 77,000 Germans seek asylum with us), around 52,000 Dutch and Germans respectively are so-called border travelers and live on the other side of the border.

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Sources consulted: Netherlands Enterprise Agency, CBS, Chamber of Commerce, website of the German Embassy in The Hague and Consulate General Amsterdam

Document: Trade Statistics-Germany-July-2022.pdf

Document: Internationalization Monitor Germany 2020.pdf

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