The End of a Happy Parenthesis. How the War in UkraineI Is Forcing Germany to Rethink Its Model Notes du Cerfa, No. 175, Ifri, September 2023
The period of peace, economic prosperity, and political stability that Germany has experienced since the end of the Cold War ends with the Ukrainian war. The shock wave of this conflict particularly hit its economy and thereby undermines the foundations on which Germany had based its power, its international influence and established its identity.
The return of war on the European continent leaves Germany shattered in its certainties, weakened in its prosperity, and troubled in its confidence in the future. The competitiveness of the German production site is questioned, and the country is exposed to a risk of deindustrialization and economic stagnation. To what extent will the Scholz government be able to demonstrate its adaptability, like Chancellor Schröder did in the early 2000s, by shaping an ambitious reform agenda? The capacity to define a decarbonized economic model, globally competitive and respectful of social standards, will be a determining element. How should the principles of the social market economy and ordo-liberalism be adapted: will the German state get more assertive as regards industrial and commercial policy? Through the choices that will be made in terms of energy mix, modernization of its economy and social policy, Germany constitutes a laboratory for Europe.
Even if the challenges ahead are considerable, Germany retains significant assets, through its financial power, its innovation potential, and its industrial base, but also the strength of its institutions. In the early 2000s, it already demonstrated its ability to turn a difficult situation to its advantage. Regarding its security, the work of reassurance towards the United States and NATO, of catching up on capabilities for its armed forces and of repositioning industrial partnerships, demonstrates an undeniable pragmatism.
Éric André Martin is Secretary General of the Study Committee on Franco-German Relations (Cerfa).
This publication is available in French: "La fin d’une parenthèse heureuse. Comment la guerre d’Ukraine contraint l’Allemagne à repenser son modèle" (pdf).