ABSTRACT
Unlike in the period immediately after World War II, economic strength was now tightly coupled with political power at the European level. This chapter argues that the most recent developments are not so much the outcome of radical changes in the political economy of Germany as the result of smooth adjustment processes in the social, economic, and political features of ‘model Germany’ (see Chapter 5) that have driven this growth regime from the very beginning. Those changes in the institutional setting were driven by opportunities and challenges created by processes of Europeanisation and globalisation. Rather than the end of model Germany, as anticipated by writers like Streeck (1997), we saw the resurrection of the German growth regime. Unlike other modes of capitalism, model Germany was successfully adapted to the new situation. The particular strength of model Germany is accompanied by economic as well as political weaknesses, however, that may give rise to fundamental economic and political problems.
