Europeanisation and globalisation as drivers of the German growth model

Authored by: Kurt Hübner

The Routledge Handbook of German Politics & Culture

Print publication date:  December  2014
Online publication date:  November  2014

Print ISBN: 9780415686860
eBook ISBN: 9781315747040
Adobe ISBN: 9781317600152


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The times they are a-changing. During the ‘golden age’ of capitalism, from the mid-1950s to the early 1970s, the western part of Germany turned into an economic powerhouse that swiftly adjusted to the recessionary effects of the first Great Crisis in 1971–3 and then became a widely admired ‘model Germany’. By the early 1980s, however, much of this fascination had vanished, and Germany had become a synonym for the ‘eurosclerosis’ that threatened social and economic achievements in most parts of Europe. German unification and the costs of merging two economies that differed in their institutional settings and level of development caused the state of the economy to deteriorate further. Political reforms were initiated by an incoming ‘Red-Green’ (Social Democratic and Green party) coalition, but without immediately apparent economic outcomes. Some observers concluded that the German growth model had come to an end. It needed another Great Crisis, the Second Great Contraction that started in 2008 and expanded quickly to become the crisis of the eurozone in 2010, for Germany to recover its previous status as an economic powerhouse. Rather than falling into a growth trap like other eurozone economies, Germany benefited, the argument goes, from the ‘Red-Green’ labour market and welfare state reforms that lifted its economy out of recession (Blanchard, Jaumotte, and Loungani 2013).

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