Population: 82,431,390

Economy Overview:

Germany's affluent and technologically powerful economy - the fifth largest in the world - has become one of the slowest growing economies in the euro zone. A quick turnaround is not in the offing in the foreseeable future. Growth in 2001-03 fell short of 1%, rising to 1.7% in 2004. The modernization and integration of the eastern German economy continues to be a costly long-term process, with annual transfers from west to east amounting to roughly $70 billion. Germany's aging population, combined with high unemployment, has pushed social security outlays to a level exceeding contributions from workers. Structural rigidities in the labor market - including strict regulations on laying off workers and the setting of wages on a national basis - have made unemployment a chronic problem. Corporate restructuring and growing capital markets are setting the foundations that could allow Germany to meet the long-term challenges of European economic integration and globalization, particularly if labor market rigidities are further addressed. In the short run, however, the fall in government revenues and the rise in expenditures have raised the deficit above the EU's 3% debt limit.

General Business Practices.

a). German is the main language used in court proceedings and business transactions.
b.) The primary monetary unit is the Deutsch Mark (DEM).

Collections.

A. Background of Industry.

(A) In Germany there is about 550 collection agencies, of which 330 are members of the German Collectors Association (BDIU). The estimate for the amount of collections in 1995 was approximately 6 Billion DEM, of which approximately 44% were commercial claims. Collection of both consumer and commercial debts is handled by both Lawyers and Debt Collectors. (B) Collection agencies in Germany need to be approved and registered by the local courts. In order for an agency to be licensed , the agency must demonstrate the following;- - the owners and mangers of the business must not have a criminal record - that they are financially secure, and they themselves do not owe money - they have the required knowledge of the legal process to carry out the business of debt collection. Once the owners are granted a license, they come under the jurisdiction of the Chief Justice of the Local Court, who oversees the activities of the collection agency. If the collection agency doesn't perform as it is required, the owners may be censored by the Chief Justice or the licence may be taken away. Collection agencies in Germany are only allowed pre-legal collection activities, they are not allowed to issue summonses, or execute judgement.

C. General Procedures.

1. There are many methods undertaken by collection agencies. Agencies will normally try to get the debtro to pay through letter or telephone. Normally the first approach is to send the debtor a letter requesting payment, this is done as soon as the claim has been received. Personal contact with the debtor is also attempted, and door knocking is only done in rare instances. If legal action is necessary, collection agency will work closely with lawyers, many agencies have their own in house law firm, this way they can offer their clients full service. Before legal action is undertaken, collection agencies will check the financial status of the debtor and determine their ability to pay. They will deal with the debtor in the pre-legal stage with queries from the debtor and will collect instalment payments and continue to monitor these. If the debtor does not pay the debt voluntary, the creditor may file a payment order at the local court by data transmission. If the debtor does not make a payment objection to the order within the time limit (within two wee