In 1991-2003, the growth rate of the German economy was slower not only than that of the United States economy, but also than of the remaining EU Member States. The reasons for economic slowdown in Germany can be attributed not only to the cyclical downswing of the world economy, but also to internal factors, such as incoherent economic policy. The slower economic growth of Germany compared to other EU Member States, especially after 1994, may be the consequence of unsolved structural problems, the nature of the pursued budget policy, changes resulting from introduction of the euro, differences involved with functioning of the labour market. Reduction of budget deficits, as well as "modernisation of social security systems" are the priority targets of the present economic policy of Germany. However, sluggish economic growth does not mean that Germany’s position in the EU is threatened at the moment. The developments in question exert, in the first place, unfavourable impact on macroeconomic performance of the EU as a whole and on its individual economies, as well as on the countries of Central and Eastern Europe, for which Germany is the largest, or second-largest trading partner.