2 - Coping with Disparity: Continuity and Discontinuity in Economic Policy since Unification

Summary

Fifteen years after unification, Germany remains an abnormal state in which many of the features of abnormality have become firmly entrenched, that is, “normalized.” This is the best approximation to a shorthand characterization of Germany's political economy in 2005. Whatever features of “normalization”/homogenization/standardization or convergence with an EU or OECD “norm” can be adduced for Germany, there are features of abnormality that persist; these arguably set the Federal Republic apart from comparator states. In this chapter, I examine selective aspects of economic policy, but there is little doubt that these have been and continue to be significantly affected by Germany's abnormal features: the uniqueness of the “German Question” in European history; the trauma of European genocide, defeat, dismemberment, and separation; national division along the systemic fault-line between east and west; its — in part unwelcome — role as hegemonic “first among equals” within the EU; and then unification, this being the first and as yet only experiment in which a state socialist society was absorbed into a prosperous capitalist economy.

It may be that the social-psychological scars of shame and embarrassment over the nation's culprit status are fading, that Germany's democratic culture thrives and stands up well in comparison to that of the “older democracies.” Nevertheless, the unique structural determinants of Germany's geographic centrality, its economic leadership and its experiment with unification will continue crucially to influence the country's development and that of its neighbors for many decades to come and mark it out as a political culture that is not yet normal in the sense of a social and political psychology at ease with itself: relaxed, intuitively confident, not particularly self-reflexive, complacent, lazy, and smug.