Erhard 1963-66

• In October 1963, Ludwig Erhard replaced Adenauer as chancellor as part of a CDU/CSU coalition government. He continued to support the development of economic and social policies which had earned widespread approval during the Adenauer years.
• Following the 1965 elections, Erhard was able to form another government in coalition with the FDP. The economy was improving, with production figures up by 8% and wages by 9% in 1964.
• As a result of the improving economy, Erhard launched a new social and economic programme which encouraged the growth of co-operation with a social market economy. However, his policy was hampered by an economic recession in 1965, caused primarily by excessive public spending. Inflation began to rise by 1966 and Erhard was forced to reduce his spending plans and raise interest rates.
• The CDU/CSU was hit by internal disputes on how to resolve Germany's economic difficulties. The FDP wanted further government spending cuts while Erhard supported the raising of taxes. As a result, the FDP resigned from the government and Erhard was forced to resign in November 1966.