The politics of german unification. Social, economic, financial, constitutional and international issues

Abstract

German reunification in 1990 has markedly changed the character of the Federal Republic of Germany, and especially that of its welfare state. Since its introduction in the 1880s, the modern German welfare state has been characterized by an astounding degree of continuity. Despite the radicality of the political ruptures of 1918/19, 1933, 1945 and again 1989/90, and despite the enormous expansion in the number of persons as well as types and scope of benefits covered, it has not fundamentally changed its norms, institutions, actors or method of financing. This pronounced path dependency, even by European standards, has hitherto constituted its strength. However, the transformation of the employment sphere, the globalization of financial and exchange markets, population aging, and the specific challenges brought by German unification have made reforms ineluctable. In this context, the rigidity of the German welfare state could prove to be a hindrance to its necessary adaptation to new conditions. This chapter investigates the impact of German reunification on German social policy during the years 1989/94, linked to an analysis of the international, economic, financial and constitutional issues which emerged in the course of reunification. The primary goal is to depict and analyze the significance of the extraordinarily complex process of German unification on the basis of both existing sources and interviews with political and administrative actors.