The contradictions and tendencies within state responses to the current crisis: the case of Germany
Research & Knowledge Transfer Edge Hill University Manchester, UK
This paper considers why it seems that national governments are pursuing contradictory responses to the current crisis - as can be seen in the co-existence of large-scale intervention and bail-outs, plus fiscal expansion, and a continued implementation of key tenets of neo-liberalism in a range of policy areas. I will argue that we should expect the state to exhibit such contradictions, for it is an intrinsic element of its institutional materiality. In consequence, it is essential that analysis uncovers the asymmetries, repetitions and tendencies at the heart of everyday state practices in order to understand the trajectory of state policies and institutional configurations. In turn, this will enable us to assess the extent to which the current crisis is the catalyst for a fundamental reorientation of various national state trajectories or not.
I will then consider the example of Germany, whose government has in the space of a few weeks moved from a critique of "crass Keynesianism" to a reflationary fiscal package which seems to bear the hallmarks of exactly this approach. At the same time, though, the government committed itself to paying off as soon as possible the extra debt incurred over the next few years, to the extent that Chancellor Merkel suggested that the constitution should be amended in order to ban excessive government borrowing. This, combined with the recent Agenda 2010 reforms, would reaffirm Germany´s shift since unification towards a neo-liberal trajectory. However, the rise of the Left Party and the increased public sentiment towards "social justice" may well prove to be intervening factors, and for this reason the paper concludes by considering the importance of the 2009 general election for Germany´s subsequent trajectory.