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We'd rather pay than change the politics of German non-adjustment in the Eurozone crisis
[journal article]
Abstract Germany's large current account surplus has been widely criticized, especially against the backdrop of the role of macroeconomic imbalances in the Eurozone crisis. We argue that Germany’s resistance to reduce its massive current account surplus through an expansionary policy at home is rooted in dis... view more
Germany's large current account surplus has been widely criticized, especially against the backdrop of the role of macroeconomic imbalances in the Eurozone crisis. We argue that Germany’s resistance to reduce its massive current account surplus through an expansionary policy at home is rooted in distributive struggles about the design of possible adjustment policies. To explore this argument, we leverage original survey data from 135 German economic interest groups, qualitative interviews with interest group representatives and policymakers, and data from public opinion surveys. We show that while there is general support for internal adjustment among German interest groups, they disagree heavily about which specific policies should be implemented to achieve this goal. Together with a broad public and elite-based consensus to avoid a break-up of the Eurozone, this polarization turns financing into a politically attractive strategy. Rather than being rooted only in German ordoliberal ideas or Germany's export-oriented structure, distributive conflicts contribute significantly to Germany's resistance to reduce its large current-account surplus. Because similar dynamics can be observed in other surplus countries, we argue that distributive struggles within surplus countries played an important role in interstate conflicts about the management of the crisis.... view less
Keywords
political economy; comparative political science; Eurozone; crisis; equilibrium; distribution conflict; pressure group; current account; qualitative interview; public opinion; Federal Republic of Germany
Classification
Economic Policy
Political Economy
Free Keywords
International political economy; Comparative political economy; Global imbalances; ZA5633: Politbarometer West 2011 (Cumulated Data Set, incl. Flash); ZA5641: Politbarometer 2012 (Kumulierter Datensatz inkl. Kurzbarometer); ZA5677: Politbarometer 2013 (Kumulierter Datensatz inkl. Kurzbarometer)
Document language
English
Publication Year
2020
Page/Pages
p. 573-599
Journal
The Review of International Organizations, 15 (2020) 3
Issue topic
The Political Economy of the European Union
DOI
https://doi.org/10.1007/s11558-020-09390-1
ISSN
1559-744X
Status
Published Version; peer reviewed