Assignment: Reunification & Its Aftermath

NOW F OR AN ORIGINAL PAPER ASSIGNMENT: Assignment: Reunification & Its Aftermath

Ideas and Politics The German Agenda: A Sampler

Reunification and Its Aftermath

Merging the two German states in the 1990s was costly, and West Germans had to pay the price. East Germany’s infrastructure was inadequate, factories were obsolete, and unemployment was high due to numerous plant closings. More than two decades after the Berlin Wall came down, per capita GDP in eastern Germany pales in comparison with the western part; and while GDP has more than doubled in eastern Germany, the economic behemoth in western Germany still dwarfs the east.

Welfare State versus Competitive Economy

The German economy stalled in the mid-1990s and unemployment hit a postwar high of 12.8% in 1998, helping the Social Democrats win control of the government. By 2005, some 5.2 million Germans were jobless—a post–World War II record. German voters brought the center-right Christian Democrats, led by Angela Merkel, the first woman Chancellor in Germany’s history, back to power.

Merkel engineered labor-market and pension reforms. The German economy bounced back strongly in 2010 despite the lingering effects of the 2008-2009 global recession. But chronic budget deficits and crushing public debt in Greece, Portugal, Ireland, and Spain dragged Europe’s economy down and slowed the German recovery in 2011-2012. Not surprisingly, the euro crisis roiled German politics.

Even so, in the 2013 elections Merkel’s CDU/CSU garnered 41.5% of the popular vote, nearly 8% more than in 2009. Germany’s other major party, the SPD, gained 25.7%. The big surprise was the virtual disappearance of the FDP, the centrist junior partner in Merkel’s governing coalition—having failed to get 5% of the popular vote required, the FDP went from ninety-one seats to zero! Merkel heads a “grand coalition” in which the two major parties form a ruling partnership; together these two parties control 80% of the Bundestag seats.