Germany has prescribed austerity and restraint for Europe, while at the same time undertaking extensive fiscal stimulus packages at home

The eurozone crisis is one of the most significant challenges EU policymakers have yet faced. Waltraud Schelkle examines Germany’s reaction to the crisis, finding that while Germany proposed economic self-restraint in 2008, it also embarked on a policy of domestic fiscal stimulus to the welfare system and car industry that amounted to 3 per cent of GDP. She argues that hard times can often lead to a delicate balance being struck between the presentation of policies to the electorate on the one hand, and the need to balance the needs of interest groups on the other: what she terms the ‘dual politics of policymaking’.