Th is work has been published by the European University Institute, Robert Schuman Centre for Advanced Studies. © European University Institute 2018 Editorial matter and selection © Josef Hien and Christian Joerges, 2018 Chapters © authors individually 2018 doi:10.2870/83554 ISBN:978-92-9084-711-3 QM-05-18-106-EN-N Th is text may be downloaded only for personal research purposes. Any additional reproduction for other purposes, whether in hard copies or electronically, requires the consent of the author(s), editor(s). If cited or quoted, reference should be made to the full name of the author(s), editor(s), the title, the year and the publisher Views expressed in this publication refl ect the opinion of individual authors and not those of the European University Institute. Artwork: © Albert Hien RESPONSES OF EUROPEAN ECONOMIC CULTURES TO EUROPE’S CRISIS POLITICS: THE EXAMPLE OF GERMAN-ITALIAN DISCREPANCIES Edited by: Josef Hien and Christian Joerges TABLE OF CONTENTS Acknowledgements 6 Introductory Explanations 6 Contributors 20 A) The Political Economy of Germany and Italy The German Political Economy under the Euro – and a Comparison to the “Southern Model” Philip Manow 27 The Political Economy of Public Sector Wage-setting in Germany and Italy Donato Di Carlo 48 Geo-Politics of Exporting Too Much: Contrasting Trajectories of Germany and Japan Margarita Estévez-Abe 63 Ideational Differences between Italian and German Governments during the Crisis Frederico Bruno 74 A Cultural Political Economy Approach to the European Crisis Josef Hien 80 B) Sectors of the Political Economy of Italy and Germany Worlds Apart: The Divergence of Southern-European Housing-Construction Economies and Northern European Export Economies Sebastian Kohl & Alexander Spielau 99 Banking Crisis Interventions in Germany and Italy: the Unpleasant Case of the New European Bank Resolution Framework Frederik Traut 108 Comparing the German and Italian Approaches to Banking Union Lucia Quaglia 120 Maternal employment, attitudes toward gender equality and work-family policies. German-Italian Discrepancies? Agnes Blome 129 C) German and Italian Perceptions, Differences and Misgivings Italy and Germany during the Crisis: Support for the EU and Reciprocal Views Alessandro Pellegata 140 The Political Space in Italy and Germany during the Crisis: Italian and German Populism Compared Hanspeter Kriesi 148 The political economy of recovery in Southern Europe Manos Matsaganis 157 Accommodating EU‘s influence vs protecting national sovereignty. Ilaria Madama and Matteo Jessoula 162 European Integration and Political Ownership: Fiction and Reality behind Structural Reforms and Risk-Sharing Filippo Taddei 170 D) The Legacy of the Welfare State in Europe An Alternative to the Constitution of the EU’s Single Market? Florian Rödl 176 Industrial Relations and Labour Law in the EU Economic Governance Mechanisms: The Cases of Italy and Germany Francesco Costamagna 182 What to expect from Germany for the European Pillar of Social Rights and beyond? Marcel Hadeed 188 The EU Political Culture of Total Optimism is not Dead: Reflections on the European Pillar of Social Rights Vladimir Bogoeski 196 A ‘more political’ leadership for the President of the Commission? A mixed-methods language-based analysis Pamela Pansardi 201 E) The Demise of Law The EU as “Honest Broker”? German and Italian Perspectives on an Adminstrative Body Anna Katharina Mangold 215 Integration-through-crisis as a distinct integrative mode: Placing expediency ahead of democracy? Nicole Scicluna 220 Should the Specifics of National Political Cultures be Characterised as “Democratic Acquis” and Can they be Defended by Law? Beyond the Nostalgia-Controversy between JÜrgen Habermas and Wolfgang Streeck Christian Joerges 229 The End of the Universality of Norms as a Model for Europe: The Error of “Seeing like a State” (J.S. Scott) in the Postmodern Condition Karl-Heinz Ladeur 237 F) Justice Deficits and Solidarity Is the EU Unjust? Glyn Morgan 244 A European Minister of Economy and Finance:Assessing the Commission’s proposal and Comparing the Positions of Germany and Italy Tiziano Zgaga 253 Re-solidarizing Europe and Defusing the Crisis Maurizio Ferrera and Carlo Burelli 263 Summarising Comments Concluding Remarks: Economic Cultures and the Politics of Interdependence Visnja Vukov 269 Two Annexes Order in the Eurozone: Maurizio Ferrera and Claus Offe in Conversation Maurizio Ferrera and Claus Offe 278 Germany is Quietly Rebalancing its Economy – But This will not Fix the Eurozone’s Flaws Donato Di Carlo 282 ACKNOWLEDGEMENTS INTRODUCTORY EXPLANATIONS We had excellent support for this project from both sides of the Alps. In particular, we want to thank the DAAD for trusting us to do something mean- I. Political Turmoil ingful with the money that we won in the frame- work of the “Hochschuldialog mit Südeuropa, When we started our preparation for this project 2018”. Second, a big thanks goes to all members only a year ago, our prime concerns were the of the ERC-funded REScEU project at the Univer- deepening of the social and economic asymme- sity of Milan, especially, the Principal Investigator tries between the North and the South under the Maurizio Ferrera, who REScEUed us from a small impact of the financial crisis, with Germany and financial disaster, and without whom all this would Italy providing an example of existential impor- have never happened.1 Third, we wish to thank tance for the EU as a whole. Both of us had resided the Villa Vigoni for providing the most fantastic in the two countries for prolonged periods in the setting, food and administrative support imagin- past, and we had never witnessed such a surge in able for the conference. Fourth, we want to thank antagonistic feelings on both sides of the Alps as Brigid Laffan at the Robert Schumann Centre of occurred during the Euro crisis. This can even be the European University Institute for giving us measured: while it had been common in Germany, a platform for publication. Fifth, we are deeply at the beginning of the crisis, to talk about the grateful to Ines Andre-Schulze for her administra- PIIGS states (Portugal, Ireland, Italy, Greece and tive support and the third-party funding bureau Spain), with Italy figuring among them as an 2 at the Hertie School of Governance in Berlin. A important member, the percentage of Italians cheer for our tireless language editor Chris Engert having a positive image of Germany crashed only and to our beloved ones. from 75 to 65 per cent during the immediate crisis period, and now the majority of the Italians thinks that Germany has too much influence in Europe Josef Hien and Christian Joerges, Stockholm/ and that it uses this influence at the expense of Milan and Bremen/Berlin, October 2018 Southern Member States.3 While our application for funding was still pending, we witnessed two crucial events that increased the pertinence of our project way beyond our expectations. First, on the 24 September 2017, for the first time in post-war German history, a far right party entered the German Bundestag with a landslide victory, receiving 14 per cent of the popular vote and 100 parliamentary seats. Second, only five months later in Italy, the far-right Lega party and the Movi- mento Cinque Stelle emerged as the big winners from the Italian federal elections of the 4th of 1 The work of Josef Hien for this collection has been carried out within 2 This notion has disappeared from the public discourse; it the framework of the REScEU project (REScEU: Reconciling Econo- re-surfaced somewhat modified in Commissioner Oettingers mic and Social Europe: the role of ideas, values and politics) hosted at comments on the plans of the present Italian government; see, the University of Milan and financed by the European Research Coun- for references, the contribution of K. Mangold, F 1. cil (grant no. 340534). Josef Hien also wants to thank the Institute for 3 Olmastroni, F. / Pellegata, A. (2017): Once we were friends. Future Studies in Stockholm, Stefan Svallfors and Gustaf Arrhenius EU support and reciprocal views between Germany and Italy. who have hosted him as a guest during the late stage of this project. http://www.euvisions.eu/friends-support-reciprocal. INTRODUCTORY EXPLANATIONS 6 March 2018. Forming a previously unthinkable II. The Challenge of Euro- coalition between right-wing and left-wing popu- pean Varieties lism, they entered into government. We are not so naïve as to believe that the variety of Europe’s It is difficult to identify uncontroversial state- crises could be understood and adequately anal- ments in the crisis literature. Among them, ysed as though these were isolated events. The however, is the - at first sight - counter-intuitive course of Italy’s economic and social policy has so factum brutum that, notwithstanding the enor- obviously been affected by the migration burdens mous efforts of Europe’s crisis politics, the econ- that Italy has had to shoulder and the lack of Euro- omies and welfare systems of the EU did not pean solidarity; the bitter disappointment could converge, these differences became instead more be turned into populist critique of the constraints pronounced. We owe the most influential expla- that European rule imposes upon national poli- nations of this phenomenon to the Varieties of cies and the public announcement of disobedi- Capitalism (VoC) studies initiated by the seminal ence by members of the Italian government. In a volume of Peter A. Hall and David Soskice.4 Their similar vein, the Alternative für Deutschland (AfD) message was that different countries in Europe in Germany had been founded as an anti-Euro have developed different institutional complemen- rescue party, which catalysed quickly through the tarities that give them specific economic advan- immigration crisis of 2015 into a xenophobic far- tages.5 The crisis drastically showcased a strong right populist party, sharing many positions with variety of this within the co-ordinated market the Italian Lega.