Blackwell Reference Online

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Chancellor of the Federal Republic of Germany (FRG: West Germany) (1963–6). An academic economist, he spent the last years of the Second World War in a research institute. He was not a Nazi sympathizer and in 1944 he drafted a memorandum for reviving the German economy after the war. This was based on the social market economy , a free market for maximum efficiency and a welfare state to look after the interests of the workers. He was appointed by the American occupation authorities as Economic Director of Bizonia (the British and American sectors) in 1948. Erhard abandoned Nazi controls, abolished rationing and introduced a new currency, the Deutschmark, steps which led to the wirtschaftswunder (economic miracle), whereby the FRG rose from the devastation of war to become the leading European economy. After the first federal elections Chancellor adenauer appointed Erhard Economics Minister, a post he held from 1948–63. His economic reforms and the affluence they produced contributed greatly to the political stability of the FRG. When Adenauer resigned in 1963 Erhard replaced him as Chancellor and head of a coalition of the CDU (Christian Democratic Union) and the FDP (Free Democratic Party). He remained popular with the electorate in the 1965 general election, but his proposals for higher taxes to balance the budget were rejected by the FDP, whose ministers resigned. Erhard ... log in or subscribe to read full text