Examples Of German Economic Nationalism

Economic nationalism has become a recent but clear feature of the German government. In the last few days, both Chancellor Angela Merkel and Finance Minister Peer Steinbrück came out bluntly against the European Commission’s attempt to liberalize the German economy, both citing the current financial turmoil as a reason to avoid new reforms.

On September 23, Ms Merkel travelled to Wolfsburg (Lower Saxony) to take part in a meeting at Volkswagen. She held a speech before 18,000 workers in which she defended the 1960 VW Law. The latter allows the region of Lower Saxony to retain a decisive power in the management of the largest European car company. "Many, many people are bound to suffer" because of the financial crisis, she said. "This is why I want more market organization. And the Volkswagen Law is part of that organization". A few days later, Mr Steinbrück held a testimony before Parliament to discuss the current credit crisis. He said that in recent months the three-pillar banking sector has been "an anchor of stability". He went on to criticize the requests by the EU Commission to open up Germany’s public banking sector: "Given the difficult market situation I would urge the EU Commission to show sense of responsibility and sensitivity, for example in the case of WestLB". There is talk that the EU might oppose a 5-billion euro state-led rescue package  for the troubled bank. Interestingly enough the two leaders belong to different parties: the Chancellor is a christian-democrat, while the Finance Minister is a socialdemocrat. In any case, both cited the current crisis as a reason to block or at least slow any further opening up of the German economy. Elections are set for the end of next year and at a time of uncertainty, both economic and financial, defending a few home turfs appears to be politically popular with Germans. No real surprise. Speaking to the business newspaper Handelsblatt in July 1997, Mr Steinbrück explained that Germany ought to defend a few strategic sectors: "Telecommunications, banks, mail services, logistics and energy". By the way: the German ambassador to Rome played a crucial role in the last few weeks by helping Lufthansa’s CEO Wolfgang Mayrhuber meet Italian trade unionists as the airline tries to buy a stake in Alitalia. On the one hand, Germany is opening its home market, for example by liberalizing services. On the other hand, it is increasingly protecting strategic sectors. The aim is to allow German companies to strengthen their position at home in order to better expand in Europe. For decades Germany’s political establishment was ruled by the Ordnungspolitik, in which the government limited its intervention in the economy to very general policy guidelines. Today, German laissez-faire appears increasingly to be a feature of the past.