The End of German Exceptionalism - The Atlantic - 0 views
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what happens in an “economy in search of a political raison d’être,” as the historian Werner Abelshauser once described the postwar Federal Republic, if its GDP suddenly stops growing? We are about to find out.
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Germany’s economy is running out of steam, and not only because of COVID or because Russian President Vladimir Putin has turned off the gas tap.
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A recent poll shows that, notwithstanding this radical program, only 57 percent of Germans now say that they could never imagine voting for the AfD
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Together with—and perhaps because of—its economic malaise, the country is living through a political earthquake. Germany’s wealth, its exemplary parliamentary democracy, and its big efforts to confront its Nazi history are no longer keeping nativist parties at bay.
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Outside the EU, “made in Germany” goods struggle to find new clients. Exports to China have been roughly flat since mid-2015 and may even start to drop, as President Xi Jinping has made clear that he wants to make his country less dependent on European industry
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The Federal Republic is the only big Euro member whose economy has not yet fully recovered to pre-pandemic levels. In fact, German GDP has roughly stagnated since 2019. And German manufacturing is the main problem: Industrial output lags pre-pandemic levels by some 5 percent.
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The reason Germany ceased to be Europe’s growth engine has less to do with Russian energy than with changing circumstances in the export markets where the country’s industrial champions once flourished
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In the 2000s, former Chancellor Gerhard Schröder slashed unemployment benefits and created a low-wage sector to help German exporters increase their market shares across Europe. Since then, many other European countries, including France and Italy, have made reforms to cut labor costs themselves, and Germany faces tougher competition in its biggest export market and has been running a trade deficit in goods with other EU members since 2020.
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We are living through the end of German exceptionalism. The country’s economy is fragile, and the rise of the AfD makes its politics as unpredictable as those of Austria or Italy. In short, Germany is joining the European mainstream. And that means that trouble is ahead.
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German car exports to China were down 24 percent in the first three months of 2023 compared with the same period in 2022
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The U.S. is Germany’s second-largest market after the EU, accounting for 8.9 percent of its exports, but to top off Germany’s troubles, Washington is becoming more protectionist under Joe Biden.
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The obvious solution is for Germany to spend more. Greater investment could raise productivity in a country where the railways have the worst delays among major European countries and cellphone and internet connectivity are underfunded
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Investment could boost demand, and liberalizing policies could rebalance the economy toward services.
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But a dogma of balanced budgets and debt avoidance remains deeply anchored among German politicians and voters.
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Now Germany, whose effort to confront its Nazi history seemed to inoculate its politicians from having to deal with a large far-right party, is also falling prey to populism and nationalism.
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ore and more governments across Europe are led by right-wing parties: in Italy, Sweden, Finland, and soon possibly Spain. In all of these countries, the center-right no longer has qualms about working with the far-right.
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the penny has not yet dropped. Germany’s political elite hasn’t been moved to take the risky step of running up debts and liberalizing at the same time. But until it does, the country’s economy will likely lag European growth. And if the economy ceases to serve as a source of national pride, political forces may thrive by brandishing more nativist concepts of German identity.
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The AfD’s rise to 20 percent in the polls—twice what it commanded in the 2021 parliamentary elections—has many causes. The party’s bastion is the formerly Communist east, where authoritarian attitudes and resentment of traditional parties feed off of feelings of having been the losers in Germany’s reunification
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But something broader is going on. For Germans, the hallmark of good government is “Ruhe und Ordnung,” calm and order. The three parties in Scholz’s ruling coalition—the center-left SPD, the Greens, and the pro-business FDP—squabble over everything
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The party has also benefited from a backlash against Germany’s progressive agenda on climate and migration
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Despite the country’s reputation abroad as a climate champion, in a poll of seven European countries, Germans were the least willing among Europeans to switch to electric cars, cut meat consumption, or spend out of their own pockets to renovate their houses to save the climate.
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But the AfD has also been able to mobilize an anti-immigration electorate in big, rich, formerly West German states, such as Bavaria, the land of Siemens and Weisswurst, and Baden-Württemberg
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the CDU will need to decide whether it will continue marginalizing the far-right or start working with it instead. The AfD is leading the polls in Thuringia and polling a strong second in Saxony
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ermany is joining the European mainstream, with its political class struggling to counter rising far-right support and an economy that is no longer best-in-class. The two things that made postwar Germany unique in Europe are no more
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the rise of the AfD is pushing Berlin to become an unreliable partner in Europe. The CDU was once the champion of Schengen, the EU’s policy to allow for passport-less travel across the continent. The party’s leader, Merz, clearly concerned about covering his right flank, has now called for reintroducing passport checks at Germany’s borders with other EU members, such as Czechia, in order to turn away migrants.
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As the AfD criticizes the “reckless” spending of the Scholz government, the FDP and the chancellor are doubling down on spending cuts. Germany is becoming less willing to spend for itself and the EU.
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The AfD may one day accede to national government, but it cannot do so on its own. To work in a coalition, the party will almost certainly have to compromise on its most radical policy propositions, such as closing the U.S. military base in Ramstein. But even with the AfD merely exerting pressure on German politics, the EU must sooner or later face an adjustment—to a future in which Germany is no longer an economic and political anchor so much as a source of instability.