Explaining German Selectivity Regarding European Union Pension Directives

Abstract

Why do German policymakers support some aspects of a single European pension market, but not others? This article argues that the German government’s preferences towards European Union (EU) pension directives are best explained by combining historical institutionalism (HI) and domestic discourse analysis (DA). Each approach by itself is insufficient to account for the observed variation between 1991 and 2007. Arguments based on party ideologies offer less explanatory power. HI explains why all governments – Kohl, Schröder, and Merkel – protected employer-sponsored book reserve pensions, a cornerstone of Germany’s coordinated market economy, from the scope of EU directives. DA allows us to grasp how interests were reframed. While the status quo stance of the Kohl government succeeded in delegitimizing supporters of alternative pension security concepts, the Schröder administration imposed an economically efficient pension reform without much public support. The grand coalition, in turn, abandoned Chancellor Merkel’s initial plan to expand second-tier pensions in the light of rising pressures that the Left Party posed for the Social Democratic coalition partner.