Ludwig Erhard

Ludwig Erhard , born on February 4th, 1897 with Fürth and dead on May 5th, 1977 with Bonn, was a West German politician Christian-Democrat of liberal orientation . Federal minister for the Economy of 1949 to 1963 and federal chancellor of 1963 to 1966, it is regarded as the father of the “German Economic miracle” of the post-war period and the social economy of market.

Formation

After a training in the trade and its participation in the First World War, it studies the economy.

Career

Post-war period

In 1945 he is professor with Munich and economic council of the American military government of occupation. In 1945 - 1946, he becomes Minister commercial and the industry of Bavaria, its wallet including the management of the money supply and the appropriations. Starting from 1948 he is director of the administration of the economy of the “bizone”, then of the “trizone”. It prepares there the reform of the currency and the return to a released market economy of the contingencies related to the desideratas of the occupying powers.

Federal minister for the Economy

With the creation of the the Federal Republic of Germany in 1949, he becomes Minister for the economy of the government of Konrad Adenauer and keeps this station until the departure of this one, in 1963. It is the person in charge of the fast projections of the economy of the FRG thanks to the social economy of market which it installation. Its successes make of him a “electoral engine”. In spite of their recurring disagreements, his duet with the Chancellor saves the CDU/CSU in 1953, 1957 and 1961 with each time a notable advance on the SPD (which however pursued it in 1949).

Federal chancellor

When in 1963, Konrad Adenauer, 85 years old, must be withdrawn in the middle of its mandate under the pressure of FDP, its partner of coalition, the nomination of Erhard as successor is awaited by all. In spite of the been obstinated opposition of Konrad Adenauer, the CDU/CSU subjects indeed its candidature for the Bundestag, which approves it.

Chancellor as from October 1963, it gains the elections of 1965. The formation of the government poses problem however: the FDP refuses to take part in a government where Franz Josef Strauß (CSU) would be Minister for Defense. Erhard finally yields at the request of its liberal partners.

Its foreign politics consists in benefitting from the period of relaxation of the Cold war to propose a standardization of the relations with the countries of the Warsaw Pact. By its peaceful note of the March 25th 1966, it proposes with the countries Eastern bloc an agreement of renunciation of violence. This attempt will fail because GDR will be opposed to it while, on its side, the FRG - clinging to the Doctrine Hallstein preventing the diplomatic representation of two German States in the same capital - will not be able to engage of thorough negotiation.

In parallel, the Franco-German relations cool because Ludwig Erhard and its Foreign Minister Gerhard Schröder (CDU) privilege the relations with the the United States, contrary to the European vision wanted by Charles de Gaulle. However, within the CDU/CSU a group of gaullists develops leads by Franz-Josef Strauß which recommends a co-operation reinforced with the France.

The interior policy is marked by a fold of the economy, outcome at a beginning of unemployment and a budgetary crisis. This subject is the object of dissensions within the coalition, ministers FDP leaving the government the October 27th 1966 at the time of the budget discussion.

After this episode, CDU does not have any more but one relative majority to the Bundestag. The Erhard government is very weakened whereas occur a defeat at the polls in the Land of Rhineland-of-North-Westphalia (more populated), then important pushed extreme-right-hand side (NPD) at the time of the regional elections of November 1966 in Bavaria and Hesse.

In reaction, deputies of CDU decide to start negotiations with SPD in order to form a great coalition, and the two parties agree on the name of Kurt Georg Kiesinger for the post of chancellor, assisted by the social democrat Willy Brandt. Erhard resigns on November 30th, 1966.

May 23rd, 1967 it leaves the presidency of the CDU, which it occupied since March 1966, in Kurt Georg Kiesinger. He will be elected honorary president of the party.

He dies the May 5th 1977 with Bonn.

It remains in the German history of the post-war period the father of the German economic miracle.

The Erhard method

In an article published in newspaper Le Monde in 1954, under the title “ Liberal policy or realistic policy ”, French Pierre Mendès France supported, in a reasoning based on arguments theoretical and abstracted, that the “Erhard method”, which made the success of the raising of Germany was not really liberal, but was due above all to the success of the monetary reform of 1948 and the American assistance of the Marshall plan, applied to a powerful apparatus of production of war which was always there after the end of the war and which it was just enough to give to flood, in spite of disassemblings and the various obstacles with the development imposed by the allies on German industry.

In fact, German lived since the end of the war in a planned economy and very rationed (milk, eggs, coal, clothing, shoes…) in which the black-market, barter and the flights reign, major the part of the population living in addition under the threat of the commissions of denazification. The people were thus with the search for a certain economic stability and policy, while aspiring to safety. In order to answer these waitings, CDU had adopted at the time of its congress of Ahlen of the February 3rd, 1947 a program of socialist inspiration (grateful nevertheless property right and of private initiative) while being presented (in opposition to the still Marxist SPD) in the form of a party of the economic reforms and social carefully. Its slogan of the years 1947-49 is rather symptomatic time and positioning of CDU: “ Sicherheit - Keine Tests! ”. (that one can translate by “ safety. No hazardous experiments! ”)

But Ludwig Erhard, charged by the allies with the administration with the economy and finances in the zones English and American, prepared in the greatest secrecy a radical monetary reform which will be started Sunday June 20th, 1948. This reform, cancels immediately - in one day! - the Reichsmark which does not have any more any course and replaces it by the Deutsche Mark. Each German receives only one installment of 60 payable DM twice and each company receives also 60 DM per employee. That corresponds to the cancellation of 90% of the old currency.

This radical reform had the advantage of making disappear immediately the black-market and the mode from barter. To have money German is obliged to put itself at work, the stores fill again of goods and the request largely exceeds the offer what involves a rise of the prices which encourages a production released from very forced. The production, compared with that of 1936, passes in three months from 45% to 75%, that is to say an increase in the 2/3.

In the zone under Soviet control, the new marks are prohibited what has as a consequence an important immediate depreciation of the Eastern mark. By retaliatory measure, Russian, undertakes as of the June 25th, 1948 the blockade of West Berlin which will last one year. In December 1948, the trade unions marxisants foment a general strike “ to put an end to the Draconian conditions which the market economy imposes”. This strike is very expensive for Germany, of 760.000, at the end of 1948, the double number of unemployed in 1949 to reach 2 in February 1950 million.

With the congress of Düsseldorf, the July 15th, 1949, CDU adopts a program really liberal opposite with that adopted with the congress of Ahlen; it is about a true fundamental charter of the liberal economy. Over this program, CDU gains of a breath the legislative elections of the August 14th, 1949. Elected at the Bundestag, Ludwig Erhard becomes Minister for the economy in the government of Konrad Adenauer. The September 19th, 1949, the Deutsche Mark is devaluated of 20%, but in a general way the economy as a whole becomes powerful, and as of 1952, Germany generates its first trade surplus.

The April 20th, 195 O, the High-Commissioners combined, reproaching him for wanting too outrageusement to support the important benefit and the large incomes, prohibit a tax reform to him which envisaged very important abatements of taxes leading to a reduction in the revenues from taxes. The German public opinion protested very vigorously against this veto considered as an unacceptable interference in the interior matters of the new Federal republic. The Allies yielded, nine days later, and this movement is regarded as the founding document of the return of the Germans to political freedom.

Ludwig Erhard wanted greatest freedom economic and greatest possible political freedom and thought that the natural taste of the research of the profit by the economic actors was to be favoured by the injection in the social body of “justifying factors of inequality”, which paradoxically would condition the democracy. In May 1963, to the Bundestag, it says: “I will resist of all my forces… I do not want to give up the German market economy. There are countries which are today in the middle of their fourth four-year plan, and one knows enough where they arrived with their three first… I speak about a Western country… Since I must say it to you, I hope that there will not be false interpretation: France. ”

External bonds

Ludwig-Erhard-Stiftung
Ludwig-Erhard-Initiativkreis Fürth

Simple: Ludwig Erhard

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