Globalisation, unification, and the German welfare state

This article argues that globalisation threatens the ability of states to continue providing for the economic and social security of their citizens. The neo-liberal Zeitgeist that accompanies globalisation has now carried over to the social democratic parties of Europe, which have moved toward the political centre. Convergence criteria imposed by the European Union to introduce monetary union have added to the downward pressure on European welfare states. The German Sozialstaat predates the development of modern welfare states and is thus firmly anchored in the political culture of the country. Nevertheless, high unemployment, the costs of unification, and concern over global economic competitiveness are taking their toll on the ability of Germany's government to continue funding social welfare schemes. Unification, in particular, has added enormously to public expenditures, while self-sustaining economic development is not in sight.