Germany: adjustments of an export-led growth regime

This chapter traces the evolution of Germany’s export-led growth regime across three distinct phases, focusing on the interplay between the growth regime and governments’ economic and social policy reforms. In the first phase (1990–2007), post-reunification challenges led to wage restraint, fiscal consolidation, and labor market dualization to restore competitiveness and strengthen exports. The second phase (2007–2019) saw a partial rebalancing, with labor market reregulation and moderate public investment addressing structural weaknesses. In the third phase (2020 onward), crises like COVID-19 and the energy shock prompted a shift toward interventionist industrial policy and Keynesian fiscal measures. These phases underscore how economic policies have evolved to sustain Germany’s export-driven model amidst shifting pressures and priorities.