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The German disease

Germany does not have an uncompetitive economy, but it badly needs to reform its welfare state. Why is it not doing so? Fritz Scharpf says the political system has become blocked by too many vetoes

By Fritz Scharpf   January 1998

Most European countries are trying to reform their welfare states in order to balance competitiveness and social cohesion. But German politics seems unable to respond, and scarcely anyone believes that long overdue reforms will be implemented either by this government or by the red-green opposition, if it wins the 1998 election. But unless you want to claim (with the federal president) that German voters and politicians are more obtuse than others, you have to consider structural causes of the malaise.

Economic globalisation and “Europeanisation” sharpen competition between companies and countries. In Germany, 36 per cent of the working population are…

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