No Way to Escape Imbalances in the Eurozone? Three Sources for Germany’s Export Dependency

Industrial Relations, Social Insurance and Fiscal Federalism

Bibliographic Data

ID7785310
AuthorsAnke Hassel (0000-0001-9976-7129, corresponding author)
Year2017
Volume26
Issue3
Pages360-379
Publication date2017-07-03
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueGerman Politics (JOURNAL)
Journal identifiersISSN: 0964-4008 • E-ISSN: 1743-8993
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/09644008.2017.1342813
OpenAlexW2753031643
LanguageEN
Citations received9
References cited28

Over the last two decades, the German political economy has increasingly relied on export specialisation as a strategy for economic recovery. This export-led development strategy turned out to be a mixed blessing. While, on the one hand, specialisation in high-quality manufactured goods has preserved Germany’s competitive edge vis-à-vis many other industrialised countries, it has, on the other hand, led to an increasing dependency on exports as the engine for growth. There has been no equally strong evolution of a domestic service economy beyond manufacturing-related services. The issue of export dependency becomes increasingly important in light of the financial crisis and global imbalances, vis-à-vis Greece and the Eurozone but also globally. Weak aggregate demand depresses both domestic employment and endangers the still fragile construction of the Eurozone. The paper argues that Germany finds itself in an export-dependency trap due to imbalances between domestic services and export-driven manufacturing. It analyses three sources for the over-reliance on export-oriented manufacturing and weak employment in domestic services: firstly, the industrial relations system, secondly, the social insurance financing of the welfare state and thirdly, fiscal federalism. All three are fundamental pillars of the German political economy and locked into political coalitions that are not easily changed

Business · Economic policy · Economics · Federalism · International economics · International trade · Market economy · Political science · Politics · Social insurance · European Socioeconomic and Political Studies · German Economic Analysis & Policies · Social Policy and Reform Studies

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