Editing History of Germany (section)

==== Economic crisis of 1970s ====
{{See also|Steel crisis}}
[[File:Bundesarchiv B 145 Bild-F051012-0010, Bonn, Empfang Staatspräsident von Frankreich.jpg|thumb|left|[[Helmut Schmidt]], left, with French President [[Valéry Giscard d'Estaing]] (1977)]]
After 1973, Germany was hard hit by a worldwide economic crisis, soaring oil prices, and stubbornly high unemployment, which jumped from 300,000 in 1973 to 1.1 million in 1975. The [[Ruhr]] region was hardest hit, as its easy-to-reach coal mines petered out, and expensive German coal was no longer competitive. Likewise the Ruhr steel industry went into sharp decline, as its prices were undercut by lower-cost suppliers such as Japan. The welfare system provided a safety net for the large number of unemployed workers, and many factories reduced their labor force and began to concentrate on high-profit specialty items. After 1990 the Ruhr moved into service industries and high technology. Cleaning up the heavy air and water pollution became a major industry in its own right. Meanwhile, formerly rural Bavaria became a high-tech center of industry.<ref name=ardagh/>

A spy scandal forced Brandt to step down as Chancellor while remaining as party leader. He was replaced by [[Helmut Schmidt]] (b. 1918), of the SPD, who served as Chancellor in 1974–1982. Schmidt continued the ''Ostpolitik'' with less enthusiasm. He had a [[PhD]] in economics and was more interested in domestic issues, such as reducing [[inflation]]. The debt grew rapidly as he borrowed to cover the cost of the ever more expensive welfare state.<ref>{{Cite book |last=Sinn |first=Hans-Werner |url=https://archive.org/details/cangermanybesave00sinn |title=Can Germany be saved?: the malaise of the world's first welfare state |publisher=MIT Press |date=2007 |page=[https://archive.org/details/cangermanybesave00sinn/page/183 183]}}</ref> After 1979, foreign policy issues grew central as the Cold War turned hot again. The German peace movement mobilized hundreds of thousands of demonstrators to protest against American deployment in Europe of new [[medium-range ballistic missile]]s. Schmidt supported the deployment but was opposed by the left wing of the SPD and by Brandt.

The pro-business [[Free Democratic Party (Germany)|Free Democratic Party (FDP)]] had been in coalition with the SPD, but now it changed direction.<ref>{{Cite book |last=Cerny |first=Karl H. |title=Germany at the polls: the Bundestag elections of the 1980s |date=1990 |page=113}}</ref> Led by Finance Minister [[Otto Graf Lambsdorff]] the FDP adopted the market-oriented "Kiel Theses" in 1977; it rejected the Keynesian emphasis on consumer demand, and proposed to reduce social welfare spending, and try to introduce policies to stimulate production and facilitate jobs. Lambsdorff argued that the result would be economic growth, which would itself solve both the social problems and the financial problems. As a consequence, the FDP switched allegiance to the CDU and Schmidt lost his parliamentary majority in 1982. For the only time in West Germany's history, the government fell on a [[vote of no confidence]].<ref name=tipton/><ref>For a primary source see Helmut Schmidt, '' Men and Power: A Political Retrospective'' (1990)</ref>