The fiscal compact - Europe's "hard core" based on German economic conditions. OSW Commentary No. 71, 2012-03-07

On 2 March, the leaders of 25 EU member states signed the Treaty on stability, coordination and governance in the economic and monetary union. It will introduce new fiscal constraints and officially vest new competences in the eurozone countries. Thus, their right to coordinate economic policy among them will be sanctioned. So far, the Lisbon Treaty has only provided for organisation of informal Eurogroup meetings, to be attended by representatives of the European Commission. The principles introduced by the compact, if the eurozone countries are really determined to observe its provisions, will create a new way of managing the single currency. Within the next few years, the most indebted countries will have to carry out radical reforms to boost their competitiveness and adjust it to German standards. During this period the Federal Republic of Germany will most probably decide to offer higher loan guarantees to relieve these countries’ budgets. The compact’s political consequences are also of great significance, especially considering how the treaty was finalised. The eurozone states have in fact accepted that the direction for changes will be devised by France and Germany, and the role of European institutions such as the Commission or the Parliament may weaken. From the perspective of eurozone candidate countries, the introduction of the fiscal compact means expanding the scope of conditions they must meet to become members of the single currency area. In the future, a country, in order to adopt the single currency, will have to meet the structural deficit criterion, and also most probably carry out economic reforms such as unifying its fiscal system. These goals will be achieved across the eurozone gradually, in the subsequent stages of the economic governance reform.

The future of the Franco-German tandem. OSW Commentary No. 83, 2012-07-11

Following the victories of François Hollande in the presidential election and the Socialist Party in the parliamentary election, the existing model of relations between Germany and France as symbolised by the Merkel-Sarkozy duo is undergoing a transformation. Along with the defeat for Sarkozy, who had fostered close cooperation with the German Chancellor, we are witnessing a change in the German-French modus operandi, which was based on making confidential agreements concerning the anti-crisis measures in the eurozone and then presenting ready-made solutions to other EU members (as in the case of the successive versions of the document currently known as the fiscal pact). However, a conflict in bilateral relations, which would mean a total breakdown of the Franco-German engine, is rather unlikely. In fact, François Hollande’s proposals have diminished the appearance of the two states’ exceptional compatibility, and have restored the specific relationship affected by the natural rivalry between two states, who because of their economies’ different orientation have divergent interests. Nevertheless, both sides are destined to reach a compromise, as neither can attain its goals in the face of the other’s opposition. In the long term, Hollande is likely to maintain a common front with Germany in fighting the crisis, while at the same time trying (with his allies from the south of the EU) to limit Berlin’s political and economic superiority.

The Fall of the East German Birth Rate After Unification: Crisis or Means of Adaptation? CES Germany & Europe Working Papers, No. 05.6, 26 June 1995

Since the fall of the Wall, Eastern Germans have drastically changed their demographic behavior. Marriages and births have dropped to an unprecedented low level. Our paper tracks birth rates of the East German population, past, present, and future. We propose a simulation model of future cohort fertility. The hypotheses we develop build on the historical record of reproductive behavior in the German Democratic Republic (GDR) since 1960 and on an analysis of the pattern of change between 1990 and 1994. The particular emphasis lies in the assumption that East German couples will rapidly westernize their family size by trying to reach completed fertility levels of the corresponding West German cohort. This implies that the resulting adaptation process includes the postunification crisis as a logical first step.

The Grundgesetz After 50 Years: Analyzing Changes in the German Constitution. CES Germany & Europe Working Papers, No. 09.3, December 1999

Fifty years after its original drafting, the German constitution has seen its text amended many times. Indeed, among OECD countries, the Grundgesetz has one of the highest rates of constitutional change. This paper analyzes these changes. It does so in a quantitative manner in its first section, before proceeding to ask how the numerous changes can be explained. Three approaches from the legal and political science literature are presented: one emphasizing historical-structural factors, one analyzing changes as constitutional revisionism, and an institutional approach which focuses on the conditions for constitutional amendment. The strengths and weaknesses of each approach are then compared and contrasted, before the article concludes with an assessment of the characteristics of Gemuw constitutional policy.