Economy

As the world's third-strongest economy, Germany plays a leading role internationally thanks to its overall economic performance. Israel's economy is characterized by its global orientation and its high technology sector."Silicon Wadi" is considered to be the world's most innovative location after the USA. For many years now, Germany and Israel have been important trade partners to each other.

Germany

Germany is the most important market in Europe, with the highest gross national product and the largest population. When it comes to international trade in goods and services, Germany ranks second after the USA. Industry is the most important sector of the German economy. It is very diversified and holds an internationally leading position in many different fields. Germany is the world's third-largest automobile manufacturer, and the areas of machine construction and plant engineering are also extremely important at an international level.

In addition to industry, the services sector also plays a vital role and has, in fact, almost reached a comparable volume. Traditional trades are a distinctive characteristic of the German economy and have long been the core of economic life. With approximately 863,000 companies, this is the most diverse economic sector. Germany is also the world leader in the chemical industry. Technologies for the use of renewable energy, information technology, and biotechnology are some of the most innovative German sectors and have above-average growth rates.

Israel

Israel's gross domestic product (GDP) of $18,000 per capita is average by European standards. It exceeds the cumulative GDP of all of Israel's neighbouring countries. Israel's economy has successfully recovered from the 9/11 crisis and the Second Intifada and is characterized by its global orientation and a high level of technological development. The high technology sector is the locomotive of the Israeli economy, with the communications sector and the life sciences acting as driving forces. High technology products make up about 50% of Israel's exports, and "Silicon Wadi" is considered to be the world's most innovative location after the USA. Israel ranks 17th in the World Economic Forum's Global Competitiveness Report 2007/2008, which measures the competitiveness of all countries in the world.

In addition to state funding measures, Israeli companies have mainly benefited from domestic and foreign private venture capital. When it comes to the mobilization of such capital, Israel holds a leading position among European countries. International companies profit from Israel's high technology boom through their company bases, R&D centres and production sites.

Bilateral economic relations between Germany and Israel

For many years now, Germany has been Israel's second most important trade partner after the USA. In 2006, the total trade volume was $4.9 billion. Approximately 8% of Israeli imports came from Germany, and 5.5% of Israeli exports were Germany-bound. The key German exports are chemical products, plastic and rubber products, metals, all sorts of machines, vehicles, and measurement and medical technology. Germany's key imports from Israel are chemical products, particularly pharmaceutical products, and electrotechnology/electronics.

The main German investors in Israel are SAP, Siemens, Volkswagen, Deutsche Telekom, Daimler-Chrysler and Henkel. In return, numerous Israeli companies operate in Germany, including Federmann Enterprises (semiconductor materials) and Iscar (machine tool manufacture). They invest in German companies, set up bases in Germany, or use Germany as a logistics base, particularly for trade with Eastern Europe.

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