Economic Crisis and New Nationalisms

German Political Economy as Perceived by European Partners

by Antonio Varsori (Volume editor) Monica Poettinger (Volume editor)
©2014 Edited Collection 188 Pages
Series: Euroclio, Volume 84


As of a consequence of the ongoing economic crisis, in 2010 there was a marked deterioration in cross-border relations between Italy and Germany. In both countries the press published articles openly blaming economic hardship on the squandering attitude of southerners or the egoistic and mercantilist policies of northerners. The reigning confusion among economists, split between pro- and anti-Euro positions in both countries, could do nothing to counter this growing wave of populist nationalism.
Out of this situation grew the idea of organizing a conference to discuss the theoretical issues implied by recent economic policy debates, purging them of ideological and nationalistic overtones. This volume publishes the proceedings of the resulting international colloquium, «Economic crisis and new nationalisms: German economic policy as perceived by European partners», which was organized by the Foundation Cesifin Alberto Predieri and held in Florence in November 2012.

Table Of Contents

  • Cover
  • Title
  • Copyright
  • About the author(s)/editor(s)
  • About the book
  • This eBook can be cited
  • Table of Contents
  • Preface
  • Introduction
  • 1. From Theory to Culture: Economics at the Test of Time
  • 2. From Culture to Theory: Economics in Time of Crisis
  • 3. Conclusions
  • Germany and Europe: Between Co-operation and Suspicion
  • Letter to German and Italian Friends. How the European Economic Mechanism Works
  • 1. Letter to German Friends
  • 2. Letter to Italian Friends
  • 3. How the European Economic Mechanism Works
  • 4. Post datum
  • The Economic Crisis and the Euro. Theoretical and Political Reactions to a Singular Historical Experiment
  • 1. A Challenge to European Economists
  • 2. The Actual Situation
  • 3. Different Dimensions of the Crisis
  • 4. Peculiarities of Historical Crises
  • 5. Some Historical Lessons for European Integration
  • 6. The Crisis of Euroland and of the European Union: The Dilemma
  • 7. And Now?
  • References
  • From Friends to Foes? The Euro as a Cause of New Nationalism
  • I. Alarming Trends
  • II. A Theory of the Euro Crisis
  • III. Oil and Vinegar
  • IV. Learning from History: The Emergence of the German and French National Fiscal Systems
  • V. The Forerunners of the Euro
  • V.1 The Latin Monetary Union
  • V.2 The System of Bretton Woods
  • V.3 The European Currency Snake
  • V.4 The European Monetary System (EMS)
  • VI. The Political Reasons of the Euro
  • VII. Summary and Conclusions
  • References
  • How to Escape from the Crisis. The Divergent Opinions of Italian Economists
  • 1. Introduction
  • 2. The Missing Debate at the Origins of the European Monetary Union
  • 3. For a Different Implementation of the European Monetary Union
  • 3.1 Economists who advocate a Social Market Economy
  • 3.2 Keynesian Economists
  • 4. Rhenish capitalism vs European Semi-Periphery Capitalism
  • 5. Europe and the Left-Wing “Critical” Thought
  • 6. The Cultural Anthropology of Italians and the Controversial Effects of Austerity
  • 6.1 Economists from the Italian tradition of Economics
  • 6.2 Italian Economists from Bocconi University and American Universities
  • 6.3 Fiscal Multipliers and the Risk of Sovereign Debts
  • 6.4 Stop the Decline: is it possible?
  • 7. Conclusions
  • References
  • The Genealogy of German Ordo-Liberalism and the European Project
  • 1. Introduction
  • 2. The Ordo-liberal Genealogy
  • 3. Ordo-liberalism and the European Union
  • 4. Outlook: Rules for European Economic Policy
  • References
  • Index of Names
  • Contributors

| 9 →


Italy and Germany: a “Marriage” Destined to Last?

Ginevra Cerrina FERONI

I am pleased that Fondazione Cesifin Alberto Predieri welcomed with enthusiasm the project of the conference titled “Economic Crisis and New Nationalisms: German Economic Policy as perceived by European Partners”.

The relationship between Italy and Germany is a sensitive subject. A relation that has developed over the years in very different areas such as: politics, literature, sport, arts, economic relations and law. A long partnership that someone (G.E Rusconi) called “marriage” and, as every marriage lasting over the years, had its ups and downs, its lights and shadows.

Truth to be told the comparison with the German world has always been very important for Italy. For instance, it is paramount to recall that the connection with the German experience within the legal field is an obvious point of reference for Italian jurists, at least starting from Vittorio Emanuele Orlando’s work. Indeed, the historical studies on his works as well as on the events of Italian public law highlighted well the influence of German legal dogmatics on Italian legal science. Likewise, the influences of the Weimar’s constitution (1919) in Italy are well known, in the period between the two wars and afterwards particularly during the years of the Constituent Assembly. However, even during the sixty years or more of the German Basic Law’s enforcement, the so called “German model” has been recalled many times in the debates on Constitutional reforms to be introduced in Italy. I am thinking about the most well known subjects such as: the federal system of the State and form of government. Hence, Italian politico-cultural élites have always shown a great interest towards the German institutional system (certainly greater than the specular one displayed by German politico-cultural élites towards our Country). During a period of economic crisis as the one Italy is facing, the forced comparison with the German model certainly becomes troubling. It says a lot the fact that our economic trustworthiness on the markets is measured daily according to the parameters established by German stability and productivity.

← 9 | 10 →

Nevertheless, Italy and Germany shared a similar historic past: they are both relatively young nations (born respectively in 1861 and 1871); the unification of both Countries was achieved thanks to the role played by leader-States which triggered progressive processes of annexation (Reign of Sardinia and Prussia), and their respective Prime Ministers (Cavour, the Reign of Sardinia’s Prime Minister and von Bismarck, Chancellor of Prussia) played a decisive role in both events.

Other analogies can be found in the Countries’ common authoritarian/totalitarian experiences and in the fact that the advent of authoritarian/totalitarian regimes both in Italy and Germany was caused by the crisis of the liberal State and a weak parliamentarianism.

Furthermore, Italy and Germany came out of the war heavily defeated and with limitations on their sovereignty and national feeling: the reason why the connection to establish a European perspective represented a great opportunity of political identity for both Countries.

Finally, they experienced a real economic miracle in the second Post-war period.

Nonetheless, nowadays the distances between the two Countries are huge. What happened? Why did Germany shift from being “Europe’s big patient” to become its driving force, especially since the Two Thousands, while Italy seems to be destined to a relentless decline? Indeed, there are many differences concerning the state of health of their respective public finances, levels of employment, and productivity, competitiveness on international markets, levels of innovation, research and political stability.

History repeats itself. The Reunification Treaty, enabled Germany to become also a political giant drawing the analysts’ attention and, I would add, a certain level of concern. Once again we face an unquestioned German hegemony.

This could explain why mistrust, nationalism, a spirit of revenge against who is held directly or indirectly responsible for all evils tend to be stirred within the context of a serious crisis. Trite stereotypes are exhumed, disapproving attitudes towards Europe are heightened, a withdrawal from the Euro is proposed and Germany which after a long period of purification from its faults deceived itself in thinking of having made peace with the world, has been hit by a new wave of resentment.

Moreover, the idea, provocative in its essence as much as dangerous for its effects, according to which it is perfectly legitimate to deny help to European Countries that are experiencing some difficulties, as they are guiltily indebted and thusly unworthy, has been supported by Germany as well. This idea is based on the principle that German people have the right (and the duty) to be led by their own reasonable interest with regards ← 10 | 11 → to international financial relationships without fearing moral reprimands (T. Sarrazin).

Refined analyses carried out by economists and political scientists highlighted that the problem is largely ascribable to the birth of the Euro and to the many incoherences of the Eurosystem (G. Guarino). Moreover, they showed that Germany’s hegemony, far from being limited to the single currency, has further increased considering that the new currency was new only in name, since it was actually a replacement for the German Mark (E. Galli della Loggia). Hence, we face a paradox: the currency which was meant to unite European people caused a seemingly unbridgeable division.

Likewise, it is unquestionable that the survival of the European Union cannot but be linked with the solution of the European constitutional issue. Under the current circumstances, politics cannot be considered as an option for Europe to manage either the currency or the entire system: it is a necessity. The path is hard and full of traps, but there are no other ways left.

Likewise, it is unthinkable to go towards a united Europe without establishing a European schooling standard or choosing an official language (P. Savona).

However, “to bang one’s fists on Europe”, according to a widespread vulgate, will become a feasible prospect only if we are credible in Europe (L. Bini Smaghi). The task is to better employ the huge sources coming from tax levy which cannot be further increased without causing the Italian system to collapse. This is the issue. The problem of Italian economy is essentially about growth. However, within an economy where public spending is worth more than the half of the national product, no growth acceleration will be possible unless public spending will be more effective and efficient. Hence, there is a need for politics, a brave one, but political consensus hinders brave actions which could tackle that network of specific, strengthened and stratified interests that weigh on our Country’s institutions, economy and society. The history of many missed reforms in the past is exemplary. This is why I cannot be fully optimistic. Behind numbers there are human beings with their history and character, for better and for worse.

As it happens in every marriage, we ought to learn from our partner and we can learn the following from our German friends: the culture of rigour, not so much (or not only) the one applied to public accounts, but the one to adopt as a lifestyle. A culture of rigour which, in my opinion, stands for: compliance with rules, awareness of the common good, meritocracy in every field without discounts, exceptions or do-goodism. Being aware that this is the winning solution would mean to ← 11 | 12 → have the tools to appear before Europe having what it takes to excel in global competitiveness.

However, Germany’s political and economic hegemony is not under discussion. That is why it is not a matter of asking whether Europe should be led by Germany or not, but how this leadership should be exerted, i.e. how Germany should organise its auctoritas. The real issue lies in the fact that Germany – perhaps the least anti-European Country of the Union – has to take on its responsibilities before Europe, abandoning its tendency to disengagement, and playing an active role in establishing a European constitutional framework (A. Bolaffi).

The European elections held on May 25, 2014 seem to have highlighted new equilibria. On the one hand, they registered a numerically significant affirmation of Euro-sceptical parties (first among them Le Pen’s right-wing party); on the other hand, they witnessed the end of the Franco-German axis in leading Europe, considering the fall of Hollande’s left-wing party in France as opposed to the undisputed victory of Renzi’s left-wing party in Italy.

Will an Italo-German axis henceforth lead Europe? It is too early to say. Certainly, starting from today the role played by Italy will be reflected in its relationship with Germany and thus with Europe.

In other words, Italy and Germany: a “marriage” destined to last?


ISBN (Softcover)
Publication date
2014 (August)
attitude southerners northerners confusion Italy
Bruxelles, Bern, Berlin, Frankfurt am Main, New York, Oxford, Wien, 2014. 188 pp., 23 fig., 3 tables

Biographical notes

Antonio Varsori (Volume editor) Monica Poettinger (Volume editor)

Antonio Varsori is Professor of International History at the University of Padua, where he is also Director of the Department of Politics, Law and International Studies. He is President of the Liaison Committee of historians of contemporary Europe at the European Commission, President of the Italian Society of International History and a member of the editorial boards of several journals. He has published extensively on the Cold War, European integration and Italian foreign policy. His recent publications include European Union History: Themes and Debates (ed. with Wolfram Kaiser, 2010), and L’Italia e la fine della guerra fredda. La politica estera dei governi Andreotti 1989-1992 (2013). Monika Poettinger is Associate Professor of Economic History at Bocconi University and the University of Florence. She has published extensively on the industrialization of Lombardy, merchant networks and German entrepreneurial migrations. Her recent publications include Deutsche Unternehmer im Mailand des neunzehnten Jahrhunderts. Netzwerke, soziales Kapital und Industrialisierung (2012) and Firenze e l’Europa liberale. L’Economista (1874-1881) (ed., 2013).


Title: Economic Crisis and New Nationalisms
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188 pages