The Economic Order — Still Modell Deutschland?

Abstract

Analysis of Germany as a world and European actor has conventionally focused on the paradox of the country as an economic giant but at the same time a political dwarf. In the process attention has been drawn to the reasons why Germany punches below its weight in international bargaining and to the implications of this situation. In a parallel manner, a similar central paradox needs to be brought into the foreground in analysis of the contemporary German political economy: between an economy whose actors, notably in manufacturing, are used to being active in world markets and traditions of economic thought and practice that are strongly national, even provincial, in character. This paradox is highlighted in the entrustment of the management of the Deutsche Mark — the second most important currency in world foreign exchange markets — to the Bundesbank, on whose council the majority of members are drawn from the state (Land) central banks.