Europeanisation of German Economic Policies: Testing the Limits of Model Germany

Abstract

This article examines the complex effects - cognitive and material, direct and indirect - of the European Union on German economic policies, with particular reference to the government of Gerhard Schröder (1998-2002) and to Economic and Monetary Union. Particular attention is paid to the questions of institutional fit and misfit, of changing domestic opportunity structures, and of whether Europeanisation has been important in reshaping domestic preferences or in altering the context of domestic action. The changing context of domestic action raises in turn the question of whether Europeanisation is displacing the German model of ‘managed’ capitalism. Two variables are identified as central in answering this question: the nature of domestic governing style and the extent of commitment to ‘negotiation’ democracy over majoritarian democracy and the continuing loyalty of German firms to this model.