A New Germany, 1990–2023[1]

In the second half of the twentieth century, Germany occupied a special position on the frontline between two competing ideological systems. Its division into two separate states was symbolic of this larger divide. It was the place where the Cold War began and ended. The watershed years from 1989 to 1991 saw the downfall of Communism and the end of the Cold War, which had split Germany, Europe, and, indeed, most of the world into two separate enemy camps. Both developments allowed Germany to reconstitute itself as a single nation-state within universally accepted postwar borders.

This concluding volume of German History in Documents and Images will look at political, economic and social developments since 1990 when, once again, a “new” Germany emerged. Ruptures of its political and economic systems have been a recurrent theme in the twentieth century: in 1918, it referred to the abandonment of monarchy; in 1933 Hitler’s murderous regime took power; the years after 1945 marked the division into two countries with diametrically opposed political ideologies. 1990, the year when East and West Germany unified, is the last of these defining events to date. Nevertheless, the adjective “new” is always temporary and ambiguous as even breaking points in history quickly give way to normalization and change always meshes with continuity in values, institutions, and policies.

Most issues introduced in this synopsis are not unique to Germany; other European democracies have had to deal with profound changes in the last decades, among them the consequences of globalization, the deepening of European integration, and the diversification of political landscapes. Comparisons across borders are commonplace and domestic policy responses increasingly are linked to European and indeed international trends. Globalization and Europeanization have complicated governing and require at times difficult economic adaptations but also provide opportunities for modernization and cross-national diffusion. Moreover, the initial euphoria about the end of Cold War hostilities was short-lived. Without the balancing force of the Cold War, the international system began to totter, and remaining hostilities were soon joined by new armed conflicts from Yugoslavia to Afghanistan. International terrorism assumed new and more frequent deadly forms with repercussions felt across Europe. In new and established European democracies, populist politicians and parties on the political left and (mostly) right challenge the established political parties and the foundations of European integration. Similarities notwithstanding, responses to and consequences of these challenges still carry significant domestic imprints. They were more complicated in Germany than elsewhere due to its status as a newly unified country, its key position in the center of Europe, and the continued legacies of history. This status carried with it uncertainty as well as promise.

This introduction will present some of the most important topics of discussion of the past decades, arranged thematically; bibliographic references are illustrative, not exhaustive and favor newer publications and monographs. We explore the major themes further in our updated selection of documents, images, maps, and videos. The events leading to, and the policies following, unification are at the core of chapters 1, 2 and 3. Chapters 4, 5 and 6 address discourses about German identity, approaches to and policies in dealing with the past, as well as controversies related to cultural, ethnic, and religious diversity. The focus on domestic politics and policies continues with documents on gender, family and demography (chapter 7), economic challenges and recovery (chapter 8), and reforms of the education system (chapter 9). The chancellorships of Helmut Kohl (1982-1998), Gerhard Schröder (1998-2005) and Angela Merkel (2005-2021) frame chapters 10, 11 and 12. Germany’s emerging and evolving role in international relations is the focus of chapters 13 (Germany as Middle Power), 14 (European Integration), and 15 (Global Engagement). The international developments and effects discussed in these chapters intersect as the country’s role in Europe contributes to its international standing, and the status as a middle power is reflected in its European and global engagement. Chapter 16 portrays the Berlin Republic from two perspectives. The first eight documents provide a kaleidoscope of impressions of Berlin as the new German capital while the remaining ones reflect on political themes that depict core features of the Berlin Republic.

1. German Unification

Prompted by political and economic stagnation and encouraged by liberal reforms introduced by the Communist leaders of the Soviet Union, Poland, and Hungary in the second half of the 1980s, GDR citizens hoped for political concessions from their own government. When they failed to materialize – and when, instead, the GDR government stubbornly insisted on the correctness of its path – citizens took action. In the summer and fall 1989, they left their homes in droves, fleeing westward by way of neighboring Communist countries. This mass exodus was soon accompanied by demonstrations in East German cities, where citizens demanded long hoped-for political concessions, including the dissolution of the long-time Communist leadership around Erich Honecker. In quick succession, civic protests compelled the retirement of most old-guard hardliners, the opening of the Berlin Wall, negotiations with oppositional forces at the so-called Round Table, and the formation of new parties.[2]

The call for political participation inherent in the slogan “We are the people” [“Wir sind das Volk”] quickly developed into a demand for German unification under a new motto: “We are one people” [“Wir sind ein Volk”]. Joining the successful Federal Republic seemed to offer East German citizens the quickest path to prosperity and freedom. The success of the “Alliance for Germany” in the first democratic election in March 1990 and the ongoing migration of GDR citizens into the Federal Republic strengthened support for a swift merger of the two German states. Any notion of a “third way” – i.e., reforming the GDR – was firmly rejected. German unification had entered the realm of the tangible practically overnight.

Events proceeded at breakneck speed, and the perception of urgency drove both German-German and international negotiations.[3] On July 1, 1990, the social and economic unification of East and West Germany took place. Political unification required the approval of the Allied powers, and international reservations vis-à-vis German unification came not only from the Soviet Union, but also from the Western Allies, who articulated their concerns with varying degrees of forcefulness. In the “Two-Plus-Four” talks between representatives of the two German states and the U.S., France, the United Kingdom, and the Soviet Union, the U.S. government took a decisive role.[4] At first, the Soviet Union, under the leadership of Mikhail Gorbachev, expressed reservations about unification in and of itself, then about a unified Germany's entry into NATO, and finally about the withdrawal of Soviet troops from GDR territory. After some initial hesitation, Chancellor Helmut Kohl allayed Polish fears about a revision of Germany's postwar borders by officially recognizing the Oder-Neisse Line as the border between the two countries. In a departure from its usual admission procedures, the European Community acted quickly in agreeing to allow the Federal Republic of Germany, one of its founding member states, to expand its territory to include the former GDR.

After the conclusion of the Two-Plus-Four negotiations in September 1990, the East German parliament agreed to political unification of the two German states which took place on October 3, 1990. In the Unification Treaty, representatives of both German governments decided to carry out the merger in accordance with Article 23 of the Basic Law. Whereas Article 146 would have offered an opportunity to build a republic on the basis of a new constitution, the chosen course allowed for the former GDR to be incorporated into the existing Federal Republic. It entailed the transfer of West German institutions, symbols, and laws onto the former GDR.[5] In the course of administrative restructuring, the five East German federal states that had been dissolved in 1952 were reconstituted (Mecklenburg-West Pomerania, Brandenburg, Saxony-Anhalt, Thuringia, and Saxony). Real and perceived time pressures, insufficient planning for the eventuality of unification, but also the conviction that the West German political and economic systems had proven themselves contributed to the transformation of East Germany according to the West German model.[6]

Integrating East and West Germany encountered political and economic obstacles, exposed mental and cultural frictions, and highlighted long overdue reform pressures which took time to resolve.[7] Euphoria quickly turned to disillusionment; talk of a unification crisis began to circulate.[8] Initially, questions of how to deal with the victims and functionaries of the old regime, the conversion of the bankrupt command economy into a profitable market economy, and the dismantling and rebuilding of institutions according to the West German model took center stage. The answers to these challenges elicited clashing opinions, and the differences were often only superficially linked to East-West oppositions.

The unification of East Germany with the democratically sound and economically superior West was supposed to cushion former GDR citizens from the hardship of the transition. Established institutions provided a blueprint, and large transfer payments from West to East funded social services; they guaranteed hefty infrastructure investments and quick modernization. But the expectations of success were eventually disappointed. The excessively favorable exchange rate for the East German Mark was politically motivated and economically difficult to sustain: 1:1 for wages and salaries, and 1:2 for financial assets. Low productivity of only one-third of that in the West coupled with relatively high wages plus uncompetitive industries and the loss of former export markets in the East led to quick and massive de-industrialization. Mass layoffs robbed many East Germans of part of their identity. Soon, over two-thirds of East German workers were forced to change jobs or accept early retirement. Women were particularly hard hit. Helmut Kohl’s promise of “blooming landscapes” [blühende Landschaften] in which a functioning, competitive economy would replace the GDR’s worn-out planned economy took time to evolve. Mass protests were not the only result. Young people, above all, left the rural areas of East Germany for the West.

Assessments of the status of German unification and the transformation of East Germany disagree even after more than three decades; ultimately, they vary according to one’s own personal involvement and the exact area of inquiry.[9] When the country was unified, 16 million East Germans joined 63 million West Germans. The discrepancy in size and power between East and West was only exacerbated by differences in economic development. Progress in narrowing the gap notwithstanding, important political and economic differences remain. The lingering effects of the previous East-West division are evident in the continued dominance of western elites in politics and economics. Politically, voting behavior still differs with eastern Germans showing a greater inclination to vote for parties on the extreme left and right. Economic disparities also linger in unemployment, productivity, and investment.

However, in today’s Germany, East-West disparities co-exist with pronounced North-South differences and within regional variations. Some cities in the East are booming while rural areas continue to lose jobs and residents. Although these developments are particularly pronounced in the East, similar trends can also be observed in some western regions. Equivalence of living standards across Germany is a constitutionally prescribed goal but falls short of uniformity.[10] In retrospect, the post-unification period was a time of crisis and gradual renewal. Regardless of the challenges, the citizens of East and West Germany have managed to forge common ground without shaking the fundamental democratic order. Importantly, despite the travails of the last decades, the majority of Germans regularly express their approval of the decision to unify Germany.

2. Normality and Identity

The merger of East and West Germany in 1990 offered the newly united country the chance to become a “normal” democracy like its western neighbors.[11] The German Question which historically focused on Germany's turbulent changes of political systems and its shifting borders in the heart of Europe seemed finally settled. Germans’ relationships to their state, and that of the world to the Germans, have become less complicated than they once were. However, concerns abroad have not been laid to rest and now refer to Germany’s leadership role in Europe and/or its power attributes that combine economic prowess with military restraint.

Answers to the question of normalization depend, however, mostly on Germany’s handling of its National Socialist past.[12] Today, few people doubt that Germany has accepted responsibility for the crimes committed under Nazism, even if the beginnings were hesitant and progress gradual.[13] A varied memory landscape has emerged, contested only by fringes on the extreme right. But unification added a second layer of Vergangenheitsaufarbeitung (working through the past): How should one deal with the victims and perpetrators of the Communist regime in the former GDR? Particularly prevalent in the first decade after unification, the intense and contentious public reappraisal of the GDR past focused mainly on those who collaborated with the GDR state security service [Stasi], and on the repressive character of the regime in general. Quick implementation of policies relating to lustration, rehabilitation, and restitution addressed grievances. Meanwhile the debate about proper educational policy and adequate historiographical assessment of the Communist dictatorship has been more open-ended.[14]

Contrary to some fears, the controversial discussion of the GDR’s Communist dictatorship has not supplanted the Holocaust as the central pillar of memory culture. Almost all of the historically significant topics that have been hotly debated – beginning with the reception of the Wehrmacht exhibition and Daniel Goldhagen's book Hitler’s Willing Executioners (1996), followed by the Walser-Bubis debate, the compensation of forced laborers, and the victim-perpetrator discussion, up to the Holocaust Memorials in Berlin, the museum commemorating the expulsion of Germans from Central Europe, and the NS Documentation Center in Munich – illustrate the continued dominance of the Second World War and the Holocaust in German memory culture.

Since Nazi propaganda abused nationalism and patriotism for the benefit of the Hitler regime, the display of national symbols was long regarded with suspicion in postwar Germany, and pride in the “Fatherland” could hardly be justified politically.[15] Today, Germany's political system stands as a source of pride along with its science, culture, and economy, as well as certain national characteristics, and the government’s social welfare legislation. The transition to a different kind of patriotism, with new substance and form, has been facilitated by generational change and, incidentally, the success of the German national soccer team in the first two decades of the new century which lent it an air of cheerfulness and even fun. The dark sides of nationalism in the form of xenophobia, Islamophobia, antisemitism, at times accompanied by violence, have started to rear their ugly heads more prominently in recent years but these incidences are regularly challenged by counter protests and official reprimand.[16]

Aside from the usual class, gender and religious differences, Germany’s cultural diversity is also local, regional, national and international.[17] Throughout the calendar year, established traditions, such as Christmas markets, German-style mardi gras parades, folkloric gatherings or celebrations of religious customs, are now joined by a multitude of open-air concerts, parades, street fairs, and farmers’ markets. Some are local, showcasing distinct customs, wares and/or costumes. Others are expressly multicultural and international. While Germans embrace vacationing abroad and cherish music, art and food items from around the world, integrating the growing number of migrants and new German citizens has been protracted and controversial. Only since 2000 has the focus on ethnic background as a precondition for German citizenship shifted to policies that allow citizenship based on birth or prolonged residence in Germany and grant dual citizenship in some cases.[18]

In 2022 more than one-fourth of the German population had foreign ancestry (in German parlance, “a migration background”) and the arrival of millions of foreigners since 1990 has challenged established notions about what it means to be German.[19] The concept of Leitkultur or dominant culture and its inclusion in so-called integration courses is a hotly debated topic. In an otherwise secular country in which citizens not affiliated with any religion now make up more than one-third of the population and Catholics and Protestants are almost equal in membership, the in-migration of Muslims which constitute about 6-7 percent of the population has also made religion a topic of discussion and contention.[20]

3. Social Change

The ethnic and religious diversification of Germany’s society has advanced significantly in recent decades, challenging politicians, raising fears and anxieties for some and expectations about a cosmopolitan and tolerant country by others. As in all western post-industrial societies, immigration remains disputed.[21] The lifting of the Iron Curtain in 1989/90 immediately intensified the ongoing immigration debate because it resulted in new and unexpected migration movements. More than 400,000 refugees from conflict regions in the Balkans, Africa, and Asia who sought political asylum were soon joined by an equally high number of ethnic Germans from Eastern Europe and the former Soviet Union. In contrast to the first group, ethnic Germans were immediately granted German citizenship. Up until 2005, Jews from the former Soviet Union also enjoyed special immigration status. The more than 240,000 newcomers since 1989 have revived Jewish life and Jewish communities in major cities like Berlin, Frankfurt/M. and Munich. East-West and urban-rural differences in ethnic diversity are pronounced; most foreign nationals and citizens with a migrant background live in the western part of the country and Berlin; many of them are EU nationals taking advance of the freedom of movement and residence it grants.

The large influx of refugees and asylum seekers strained the capacities of the welfare state and led to a marked increase in xenophobia and social envy, a pattern that would repeat itself when conflicts in the Middle East, in particular the civil war in Syria, and in many regions of Africa led to a renewed surge of migration to Europe. At the height of the refugee movement in 2015/16, Germany alone took in more than 1.2 million refugees. Chancellor Angela Merkel famously declared, “we can do it,” citing humanitarian reasons. Many German citizens took an active role in welcoming these refugees but the sudden influx also overburdened many communities. The specter of terrorism and cultural value clashes stoked fears and contributed to the electoral success of the nationalist right-wing party, the Alternative für Deutschland (AfD). In the face of opposition and the challenges of integrating large numbers of newcomers, the initial open-door policy soon led to more restrictive policies and a marked decline in refugees and asylum seekers. However, the decline was short-lived. In the aftermath of Russia’s 2022 invasion of Ukraine more than 1 million people fled to Germany as well.

National and international commentators also point to Germany’s need to attract and integrate migrants to counter over 40 years of low birth rates and an aging population. A topic of discussion only in the last decades, demographics has emerged as a pressing policy issue. Debates center on the effects of demographic shifts on Germany’s population, the role and care of its senior citizens, the financing of the social systems, and its influence on immigration policies. Immigration is crucial to counter the shortage of skilled labor but remains politically contentious. Germany’s future political and social trajectory will be influenced by the success or failure of integrating as many migrants as possible into its cultural and economic fabric.[22]

The declining birthrate coupled with an aging population also brought renewed attention to the traditional role of women as mothers and caregivers and the accompanying difficulty of reconciling work with motherhood. Gender mainstreaming directives by the EU, diffusion of practices from other countries, and the example of the former GDR where the integration of women into the workforce was both an economic necessity and an act of self-determination, also contributed to a pronounced policy shift. Policies enacted since 2007 include the extension of the parental allowance to both parents, the expansion of childcare facilities, and the reform of school structures. Despite considerable progress, in particular in the western part, daycare facilities remain in short supply and the lack of all-day schooling hampers the full-time employment of mothers. Cultural reservations about combining work and motherhood continue to exist as well.

Other policies have addressed equal pay directives and quotas to represent more women on company boards. Politically, the representation of women in politics has long benefited from the introduction of voluntary party quotas. First introduced in the 1980s by the Green Party, they have now been introduced by the SPD, the Left Party, the CDU and, for leadership positions only, the CSU. Women represent 35 percent of Bundestag deputies during the legislative period 2021-2025. Likewise, awareness of gender diversity and identity has increased.[23] Same-sex activities were de-criminalized in East and West Germany prior to 1990 but legal discrimination was only repealed in 1994. Registered same sex partnerships, introduced in 2001, have paved the way for same sex-marriages since 2017.

4. Chancellor of Unity

Prior to the opening of the Berlin Wall in November 1989, Helmut Kohl’s tenure as chancellor seemed to be coming to an end. Few expected him to win another term, despite his incumbent advantage. However, the resolve with which he handled both domestic and international negotiations led to quick unification and earned him the title of Chancellor of Unity. Initially, unification fueled a boom in the German economy, and Germans were celebrating the coming together of their once divided nation and the attendant return of full international sovereignty. In the political sphere, an optimistic Zeitgeist ensured Helmut Kohl's reelection as chancellor in December 1990. The government coalition between the Germany's Christian Democratic Union [Christlich Demokratische Union Deutschlands, or CDU] and the Christian Social Union [Christlich-Soziale Union, or CSU, which operates in place of the CDU in Bavaria only] with the Free Democratic Party [Freie Demokratische Partei, or FDP] continued. This optimism quickly dissipated, however, when the breakdown of the GDR economy and clashes over East Germany's transformation posed substantial challenges to policy makers. Soon the Federal Republic was overcome by the unresolved economic and social problems of previous decades. The increase in right-wing extremism and xenophobia that accompanied the arrival of growing numbers of ethnic German remigrants from the East [Spätaussiedler] and asylum-seekers added further tensions.

In the 1994 election, despite the frustrations associated with the pace of unification, the CDU/CSU and FDP coalition narrowly prevailed. In response to the declining competitiveness of German industries and mounting pressure by business and the media, the CDU’s program borrowed neoliberal ideas, but enacting even a modest economic reform agenda proved difficult due to political deadlock and fierce protests against welfare cuts. In 1997 the term “reform gridlock” [Reformstau] was coined to capture the prevailing sense of frustration: problems were identified and the desire for reform articulated, but proposed solutions to the problems threatened established entitlements and became quickly bogged down in the multilevel decision-making process. The less happened, the more threatening the future scenarios became.[24]

Helmut Kohl’s government was in power at a crucial juncture in European integration. Unification of the two German states was predicated on Germany’s firm commitment to European integration: According to Kohl, unification and European integration were two sides of the same coin. Kohl’s close partnership with French president François Mitterrand deepened Franco-German reconciliation; together they helped pave the way toward a closer union in Europe. The Treaty of Maastricht (1992), amended several times since then, introduced a common foreign and security policy, collaboration in judicial and domestic affairs, and the creation of a single currency, the euro. Its introduction was accomplished against opposition at home in particular since many Germans associated the strength of the D-Mark with political and economic stability; the currency had turned into an important identity marker that citizens linked to economic recovery and international standing.

By 1998, Kohl had been in office for sixteen years, and most voters believed it was time for a change. And with that change came the end of an era. Helmut Kohl will always be remembered as the driving force behind the modernization of the CDU, as a committed European who led the negotiations for a single currency, and as the chancellor of unification. Still, his involvement in and handling of the financial scandal of 1999-2000, in which illegal contributions to CDU party accounts were revealed, cast a lasting shadow over his final years in office.

5. The SPD-Green Coalition

The 1998 forming of a government between SPD [Sozialdemokratische Partei Deutschlands] with Alliance 90/The Greens [Bündnis 90/Die Grünen] immediately brought back memories of 1969, when the SPD had formed a coalition with the FDP. Both coalition governments came to power with expectations of departing from previous policies and charting a new path. In contrast to 1969 – when some felt that the advent of a social-liberal coalition would shake the foundations of the Republic – the losers of the 1998 election greeted the Red-Green coalition with democratic composure. The 1998 election marked more than a switch in government: a generational changing of the guard also took place at the top levels of the political leadership, with the wartime generation giving way to the postwar one. The so-called generation of '68 had earned its political spurs during the rebellious 1960s and had made its way through the institutional ranks. Now some of its representatives, led by Gerhard Schröder and Joschka Fischer, had taken over the reins of government.

Putting into practice a leftist agenda proved, however, more difficult than expected. The initial months of the Red-Green government were preoccupied with internal party squabbles and the difficulties of day-to-day politics. The implementation of urgently needed reforms encountered difficulties, just as it had done in the final years of the Kohl government. In the face of higher national debt, persistent structural unemployment, slow economic growth, low birthrates, and an aging population, not to mention global competition, practically no area of politics escaped calls for reform. Subjects under review included: the financing of pensions and health insurance, the restructuring of the labor market and social welfare, the revamping of educational structures and policies, and the reorganization of the relationship between the federal government and the federal states [Länder].

Unlike the widespread support for earlier reforms in the 1960s and 1970s, which held out the promise of more democracy, social services, and education, now reforms repeatedly provoked resistance and protest. Political roadblocks between the federal government and the states also hampered progress. Often, the political process succeeded only when an agenda was presented by an informal advisory committee and then negotiated by an equally “informal grand coalition” between the two major parties, the SPD and the CDU. Virtually all of the major political undertakings – from the commission on reforming the armed forces, to the immigration commission, to the federalism commission and the pension and labor commissions – proceeded on this basis. Nonetheless, some long overdue liberal reforms were successfully introduced. These included a more modern citizenship law that allows dual citizenship under certain circumstances (2000), a domestic partnership law for same-sex couples (2001), and finally, after four years of negotiations, an immigration and integration law (2005). Important changes were also launched in other areas, with reforms being made to the armed forces, the tax code, the social welfare system, and in education.

Chancellor Gerhard Schröder, however, had promised in 1998 to make reducing unemployment the gauge of his government’s success. When the economy fell into recession in 2001-2002, it was clear that minor adjustments to the welfare state were not sufficient to refuel the economy. Climbing unemployment figures in particular occupied political leaders and the public. In a political show of strength, Agenda 2010 – a multistep labor market program – was passed in March 2003. Inspired by neo-liberal demands for economic competitiveness of a high-wage economy, this reform effort cut back on some of the generous provisions of the welfare state, seeking to draw welfare recipients back into the workforce through incentives. Agenda 2010 called for reductions in unemployment payments and the merger of unemployment and welfare benefits (the implementation of the so-called Hartz IV proposal).

Protesting these cuts, disillusioned SPD members and trade unionists founded the Electoral Alternative for Labor and Social Justice [Wahlalternative Arbeit und soziale Gerechtigkeit or WASG], which established itself as a political party in January 2005; in 2007 it merged with the Party of Democratic Socialism [Partei des demokratischen Sozialismus, PDS]. High unemployment, which stood at 4.8 million (11.6 percent) in May 2005, internal party disputes over economic and social policies, and one defeat after another in regional elections – with a particularly bad blow being dealt to the party in the traditional Social Democratic stronghold of North Rhine-Westphalia – led Chancellor Gerhard Schröder to call for early national elections. A vote of confidence, which Schröder purposely lost in the Bundestag, paved the way for an early Bundestag election in September 2005. Retrospectively, these reforms – despite their shortcomings – have been widely lauded for refueling the German economy in the years to come.[25]

The SPD-Green coalition’s decision to break with the postwar taboo of military involvement abroad was similarly controversial. Evoking Germany’s responsibility to avoid another genocide on European soil, the objections of the pacifist wings in both parties were overturned in the 1999 NATO mission in Kosovo in which German troops participated. After the 9/11 terrorist attacks in the United States, German troops also joined the NATO-led mission in Afghanistan. Ultimately, the governmental change from Helmut Kohl to Gerhard Schröder introduced a more assertive brand of politics abroad.[26] It included, in particular, a (failed) bid to a seat on the United Nations Security Council and strong opposition to the U.S.-led military intervention in Iraq in 2003. Germany’s international role also increased thanks to the high visibility of its foreign minister, Joschka Fischer, in international affairs.

The SPD-Green coalition is remembered for successfully breaking the “reform gridlock” and shifting the parameters of foreign and security policy in moderate but significant ways. The chancellor, Gerhard Schröder, is also remembered as “the media chancellor,” in recognition of his skills in dealing with the news media. His close relations with Russian president Vladimir Putin benefited German-Russian relations at a time when the West hoped for closer cooperation with Russia but became controversial when Putin increasingly turned autocratic.

6. The Merkel Era

Securing a governing majority in the Bundestag generally involved coalitions between two parties: either CDU/CSU or SPD governed with the help of one of the smaller parties (FDP or Alliance 90/The Greens). The stalemate outcome of the 2005 Bundestag election, however, ended in a Grand Coalition between the CDU/CSU and SPD, the second only in the history of the Federal Republic. Defying all prophesies of doom, the initially unpopular coalition not only survived four years in office and mastered the worldwide financial crisis of 2008/2009 but left office with positive reviews. The much-anticipated return to the more traditional coalition of CDU/CSU and FDP (2009-2013), on the other hand, brought turf and policy battles and, in 2013, a return of yet another Grand Coalition of CDU/CSU and SPD.[27] 2017 was supposed to end the circle of governmental cooperation between the two major parties. Yet, after failed coalition negotiations between CDU/CSU, FDP and Alliance 90/The Greens another Grand Coalition took office in March 2018.

Grand Coalitions, once seen as exceptional and limited to only a few years, had become the norm. Power relations change when two or more parties form a coalition government, and they have to work together while preserving their individual party profiles with a view to the next election. They can undertake fundamental reforms or impede each other. These dynamics are particularly pronounced when the two largest parties govern jointly. Importantly, opposition parties command only a minority of the votes in the Bundestag when the two largest parties govern and they compete to sharpen their profiles. The frequency of Grand Coalitions has emerged as a byproduct of profound electoral changes that have seen the decline of the voter share for the major parties CDU/CSU and SPD (1990: 77.3 %; 2017: 53.4 %; 2021: 49.8 %) and greater representation of minor parties. Counting CDU/CSU at the national level as one party, the number of political parties represented in the Bundestag has climbed from four prior to 1990 (CDU/CSU, SPD, FDP, The Greens) to five with the addition of the PDS, later The Left (Die Linke) in 1990 and to six in 2017, with the AfD. Its inclusion in the Bundestag is a first for a right-wing extremist party in the country’s history.

Neither The Left party nor the AfD are deemed politically acceptable as coalition partners at the federal level. The Left is excluded mostly for some of its foreign policy stances and lingering mistrust toward a party whose origins go back to 1989/90 when it succeeded the ruling party of the GDR, the SED. Nevertheless, its gradual acceptance as a legitimate player (but not coalition partner) has been facilitated by the presence of its Bundestag representatives since 1990. The role of the pariah is now assigned to the AfD; its representatives are clearly seen as outsiders due to their nationalist/xenophobic rhetoric and strong Euroscepticism. Excluding two of the six parties severely limits the repertoire of coalition options. In 2017, this scenario led to coalition negotiations continuing for nearly six months, the longest in the history of the Federal Republic.

Angela Merkel, the first female chancellor and during her time in office often dubbed the most powerful woman in the world, governed Germany from 2005 to 2021.[28] Reforms introduced during the SPD-Green government and long overdue reforms that had been discussed for years were implemented during her tenure. Federalism reforms, mandatory financial debt brakes at the national and state levels, minimum wage requirements, new immigration and integration as well as family and gender policies (discussed above), and the overhaul of energy policies feature prominently among them. Going back to the 1970s, when the first nuclear power plants became operational in West Germany, their presence has met with public apprehension and protest. A policy of phasing out nuclear power introduced by the Red-Green coalition in 2001 was to be annulled in 2010 but, in a surprise move, this decision was quickly reversed when the Fukushima nuclear disaster hit in 2011. Met by widespread public approval, this sudden policy move put further pressure on the diversification of Germany’s energy sector and the cost of energy; all nuclear reactors were to be shut down by the end of 2022 (the last three nuclear reactors were taken off the grid in April 2023).[29]

Angela Merkel’s long tenure in office was facilitated by the impressive recovery of the German economy despite roadblocks. Germany’s path from the “sick man of Europe” to the European economic powerhouse was accompanied by protests and setbacks. At a time of increasing economic growth and declining unemployment rates and sovereign debt, the international financial crisis of 2008/09 hit the economy hard. Stimulus packages and bank reforms made decisive contributions to stabilizing the economy and it recovered quickly. Competitiveness also increased thanks to the beneficial exchange rate of the euro and exports boomed. The export surplus reached new heights and unemployment figures were at the lowest since unification. Basic features of the German economic model, such as reliance on family-owned businesses, cooperative industrial relations, emphasis on vocational training, and high-quality goods, have survived.[30] At the end of Angela Merkel’s time in office, the German economy contracted for the first time in a decade mostly due to the Covid-19 pandemic. Overall, the German economy fared better than those of its European peers but stagnation and recession were just around the corner. The causes are manifold and include the high costs of energy, shortages of skilled labor, bureaucratic hurdles, lagging infrastructure investments, and a changed export market, to name some of the most important ones.

Exposure to globalization, changes in productivity and competitiveness have come with social costs: a decline of the power of labor unions; long-term stagnation of real wages; increase in inequality and poverty; emergence of a dual wage earner structure. The liberalization of the economy shielded many employees from the negative side effects but introduced precarious, low-paying jobs, often with short-term contracts. These changes also have long-term consequences for pension benefits and wealth accumulation. In addition, no country relies more heavily on its export industries for its economic growth and wellbeing, which creates dependencies. In response to growing public debt, a so-called debt brake was introduced in 2009 to balance national budgets by 2016 and state budgets by 2020. A balanced national budget was achieved in 2015. Skeptics challenge these regulations and point to lagging infrastructure investments, for example country-wide access to high-speed internet. These concerns have gained traction in recent years as structural economic problems have become more prominent. Strict fiscal rules are being called into question.

Hallmarks of Angela Merkel’s time in office are also associated with her role in the European Union and her profile in international politics more generally. After the successful introduction of the euro in 1999/2002, reverberations of the 2008-2009 global financial crisis exposed its inherent problems. Extending a joint currency to countries with highly divergent economies (20 to date) and the lax enforcement of criteria that were supposed to stabilize the finances of member states proved disastrous, in particular in the southern European countries, with Greece being particularly hard hit. The crisis catapulted Angela Merkel and Wolfgang Schäuble, the finance minister, to the center of negotiations in Brussels. Their insistence on debt reduction to restart economic growth and to alter economic behavior in the affected countries, quickly drew forceful criticism from abroad.[31] Similarly, the large influx of refugees after 2011 exposed the weaknesses of the EU’s asylum and immigration policies. The opening of Germany’s border in summer/fall 2015 to a large number of refugees invited criticism since the German government had not consulted fellow EU leaders and, for many, had instituted a precedence that would only encourage more refugees to follow.

Yet, Angela Merkel’s determination and skill in circumventing the unravelling of the EU and the euro are widely acknowledged. She assumed the leadership role in the passage of the Lisbon Treaty (2009) and has been a key figure in EU-Russian relations and in negotiating the Minsk II Agreement in 2015 that sought to bring peace to Ukraine. German leaders remained an important power broker in settling disputes and keeping channels of communication open even after President’s Vladimir Putin’s authoritarian turn, the annexation of Crimea, and the meddling of his government in the internal affairs of western democracies. Despite sanctions imposed on Russia, trade relations and, by implication, Germany’s energy dependence on Russia continued until Vladimir Putin’s actions in Ukraine in 2022 sent shock waves through western democracies. German political and business leaders had to ask themselves whether they had put too much credence on diplomacy and business interests while downplaying Vladimir Putin’s increasingly aggressive foreign and security policy.

At the start of Angela Merkel’s fourth term in office in March 2018, Germany was in an enviable position, economically and politically. However, her last election also signaled change ahead. Her fourth and final term as chancellor ended in 2021. Merkel’s unusual background as physicist and her upbringing in the Communist East have been used to explain her leadership: cautious, pragmatic, systematic, cooperative and non-ideological. Weighing options based on evidence and not rushing to conclusions are the hallmark of the “Merkel method;” it built on delaying decisions but at times led to surprise policy changes. Most importantly, this policy style crossed party lines. The CDU’s move to the political center by embracing, among others, more open immigration and gender policies, has blurred distinctions between left and right and contributed to the electoral decline of the SPD. Lamenting the loss of the conservative core of their party, some CDU voters switched their support to AfD and FDP in the 2017 Bundestag election. To some critics, the centrist consensus of recent years also has stifled crucial policy debates. Electoral campaigns of recent years were mostly lackluster. Confronted with new cultural and economic divides, the representation of the AfD in the Bundestag, and in an unsettled international environment, the relative harmony of German politics is being severely tested.

In 2021 the long Merkel era came to a somewhat surprising end, because she retired from office and her chosen successor Annegret Kramp-Karrenbauer failed to turn her minister of defense portfolio into the chancellorship. Due to some campaign missteps, the leading CDU candidate Armin Laschet, prime minister of North Rhine Westphalia, lost the election against the former Hamburg Mayor and federal minister of finance Olaf Scholz, a sober North German leader of the SPD. In the coalition negotiations that followed an untested arrangement of three parties at the national level between SPD, Alliance 90/The Greens and FDP emerged, since there was wide agreement that another Grand Coalition should not be formed. This so called “traffic light coalition,” according to its parties' colors red, green and yellow, was an unprecedented arrangement in which governing proved difficult, since the three partners Olaf Scholz, Robert Habeck and Christian Lindner insisted on contrasting welfare, environmental and neoliberal policies.[32] While the media had a field day in amplifying their differences, in practice the coalition which had claimed to modernize Germany managed to find just enough compromises to hold the government together. It remains to be seen whether this will remain true in the future.

7. Europe and the World

German unification in October 1990 generated a variety of contradictory responses and expectations; the world watched with curiosity if not trepidation how Germany would develop. For some, it conjured up old fears of German “special paths” [Sonderwege] and of renewed German dominance in Europe. Others, however, saw it as a chance for Germany to be recognized in the international community as a “normal” state like any other.

Unification and the resulting acquisition of full sovereignty strengthened the role of the Federal Republic as a power in the heart of Europe and gradually expanded the scope of its activities and responsibilities. It has outgrown its earlier characterization as a regional power but its emerging and evolving role in international relations remains controversial: Is it the dominant leader of Europe, even its hegemon? Or is it a reluctant leader, too slow in response and risk-adverse? Is it unique in its constellation of economic power and military moderation? Germany conceives of itself as a team player [Mitführungsmacht] with the potential to influence outcomes [Gestaltungsmacht]. The self-restraint that characterized the foreign policy of the old Federal Republic is still predominant, but it is being increasingly supplemented by signs of self-assertion.

Germany has evolved into a prominent soft power and is routinely ranked among the “top countries” in the world. Soft power is notoriously difficult to define but refers to the attraction of a country to others based on its values, policies, and institutions. Attraction alone, however, is not influence in and of itself. It needs to be backed by actions. German governments have been under pressure to play a more active and extensive role in international affairs. Changes in German foreign and security policy have been first and foremost responses to transformations in the international arena and not the result of deliberate new strategies. At a time when the reshuffling of the international order from U.S. hegemony into a multipolar configuration creates conflicts and ambiguities, Germany has positioned itself as key player in Europe with growing but limited global aspirations. These policy adjustments have been gradual and based on long-standing commitments to acting as a civilian power and in concert with others. A civilian power prioritizes international cooperation and joint problem-solving; military action is the policy of last resort. This concept is tied to multilateralism, a commitment to acting with others instead of going it alone. [33]

The culture of restraint and adherence to multilateralism have been tested in a rapidly changing international environment. Policy tools are multidimensional; they provide options and require choices. For example, in Germany’s relations with China economic interests feature prominently but conflict with rule of law and human rights considerations. Diplomacy can be bundled with economic sanctions as seen in recent actions against Russia. In the nuclear negotiations with Iran, Germany, along with the five permanent members of the UN Security Council and the European Union, used diplomacy to defuse tensions and advance economic interests. International military involvement has been justified on various grounds: to keep or promote peace, protect civilian populations, and fight against terrorism.[34]

Calls for greater international involvement have translated into concrete action in the area of international security. The Bundeswehr has evolved from a purely defensive army into an operational military and peace-keeping force, whose soldiers participate in NATO, EU, and UN missions on various continents although the overall troops involved remain small. For example, in March 2018 approximately 3,600 soldiers were deployed abroad.[35] Demands for the modernization of the German armed forces have involved the suspension of conscription in favor of a professional army of now approximately 185,000 soldiers. Calls for upgrading and further modernizing the underfunded armed forces are routine and tied to Germany’s NATO membership; they reached new dimensions after Russia’s invasion of Ukraine.

Germany’s security relies on NATO, an alliance of 32 countries in 2023. German military expenditures as a percentage of GDP declined precipitously after 1990 and only saw modest increases for many years. Contributions to NATO still fell far short of the envisioned of 2 percent agreed upon by NATO member states in 2006 and reaffirmed after Russia’s annexation of Crimea in 2014. Yet, drastic increases in military spending proved difficult in a domestic environment in which military buildup is frowned upon. It took the wake-up call of the Russian invasion of Ukraine in 2022, combined with pressure to ramp up European defense forces, that pushed the German government to substantially increase the defense budget. Germany’s NATO contributions are expected to meet the 2 percent goal in 2024. In terms of overall numbers, in 2023 Germany was the second-largest contributor to the NATO budget after the U.S. Growth in military spending is being matched by upturns in development and humanitarian aid which are seen as equally important to security and peace. Widespread German pacifism and skepticism toward foreign military deployment notwithstanding, the reorientation of the role of the armed forces has met with relatively little public friction.

Good and close relations to one of Germany’s key partners, the United States, have been built on strong military ties within NATO and a dense network of business and citizens’ connections.[36] This amicable relationship has been tested. Vehement opposition to German participation in the Iraq War led to considerable transatlantic tensions but these were quickly repaired and relations strengthened again after 2005 and, in particular, when Barack Obama replaced George W. Bush.[37] The election of the populist Donald Trump to the presidency has met with a rather negative response in Germany and invited discussion about the future roles of Germany and the U.S. in their bilateral relations and in global affairs more generally. Trust in the international leadership of the U.S. declined markedly during the Trump presidency.[38] Relations improved again during the Biden presidency but Germans in particular and Europeans in general have learned from the Trump years and the Russian invasion of Ukraine: they can no longer rely solely on the United States for their security umbrella.

Multilateralism binds Germany to the EU (another civilian power), its major alliance partners and international organizations in general. If consensus and pragmatic adaptation characterize Germany’s foreign policy, then this characterization rings even more true of its European policies. Unification coincided with the deepening and widening of European integration and the introduction of the Euro. Germany’s international transformation took place alongside the transformation of the EU into an engaged international actor, in particular in questions of international trade. The deepening and widening of European integration became both an opportunity and a liability. It was a liability because the permeability of national borders stoked anxieties about immigration and sparked fears about the potential negative economic and political consequences. But Germany’s central location also offered the opportunity to expand its relationships with its neighbors to the East and surround itself with democratic allies. German politicians therefore became early advocates of NATO and EU expansion. Between 1995 and 2013, membership grew from 12 to 28 and, after the United Kingdom left the alliance in 2020, it now stands at 27. Other member candidates are lining up at the door. Rapid political and geographical expansion has encountered difficulties of a new scale; the permissive consensus of the past when EU affairs were largely elite affairs has given way to greater popular skepticism.[39]

New and deepening frictions first surfaced in summer of 2005 when voters in France and the Netherlands failed to ratify the European constitution. The euro crisis which erupted in 2010 exposed pronounced economic north-south differences and tested European solidarity amidst rising nationalism. Conflicts abroad and persistent poverty in many countries in the Global South led to a rise of refugees and migrants, further exposing the weaknesses of EU immigration policies and lack of solidarity. More recent challenges include democratic backsliding in some existing and aspiring member states and a resurgent Russia in the East. The outcome of the 2016 Brexit referendum in the United Kingdom and the country’s exit in 2020 illustrate the extreme side of growing euroscepticism, but elements of it exist everywhere. These far-reaching and rapid developments have raised questions about the limits of the EU. They concern its territorial expanse, the purview and conception of democracy, the future of the currency and that of the European integration project.[40] The recent economic recovery of the eurozone member countries alongside challenges in the international environment, on the other hand, have also thwarted overt pessimism by demonstrating the positive sides of European integration.

Germany’s place in Europe is framed by a strong commitment to European integration and close relations with its neighbor France. Franco-German relations are indispensable for the success of European integration and have been its driver. Close relations provide a sense of equilibrium even if the power advantage has shifted from France to Germany since unification. The 2017 presidential election in France pitted a strong supporter of European integration, Emmanuel Macron, against a decidedly Euroskeptic contender, Marine Le Pen. Macron’s victory in 2017 and then again in 2022 was greeted with widespread relief in Germany. The two countries remain at the center of European integration but amicable rhetoric often disguises policy differences in security, economic, and energy policy that are difficult to reconcile and have implications for Europe.

The fast pace of European integration in the 1990s and 2000s, the attendant geographic enlargement of the EU, crisis narratives, and concerns about protecting German interests have left their imprint on the German public even if the majority identify with Europe.[41] Euroskeptic voices are articulated by members of the Left Party and the AfD, depending on issues. The Federal Constitutional Court has repeatedly been asked to adjudicate in matters relating to the EU. Its rulings provided the legal basis for the introduction of the euro, the expansion of the rights of the Bundestag and the Bundesrat in EU affairs, and the constitutionality of Euro bailouts while also setting limits to supranationalism.

8. From the Bonn to the Berlin Republic

With the benefit of hindsight, a good deal more has changed for the Republic and its citizens than anyone could have predicted more than three decades ago. The past decades have been a time of transition, one that set in just when people had found their bearings in the old Federal Republic. Unification came extraordinarily quickly and changed virtually every aspect of life for citizens of the former GDR. The political, economic, and social reforms affecting Germany as a whole were pushed through rather hesitantly in comparison, but their long-term effects have been significant. Unification, Europeanization and globalization acted in overlapping and at times competing ways and required new approaches to problem-solving and behavior. [42] Germany's international standing and the scope of its foreign and security policy have gradually and steadily grown. Debates about the unification process, the causes, responses and effects of political and economic reforms, and the role of the Federal Republic on the world stage have often been pointed, since individuals are affected in a manner that is both personal and immediate.

The disappearance of the Bonn Republic (1949-1990) and the gradual emergence of the new Berlin Republic was not an abrupt process; rather, it was an evolutionary adaptation to new national and international conditions along a continuum. The term “Berlin Republic” emerged in conjunction with the debate about Germany's capital and initially expressed fears that moving the seat of government from Bonn to Berlin might also signal a turning away from the post-nationalist orientation of the “successful democracy” [geglückte Demokratie] of the “old” Federal Republic.[43] Compared to the Bonn Republic, the Berlin Republic is more diverse in its population, less patriarchal and more egalitarian in its gender relations, and more neoliberal in economic terms, although principles of the social market economy still feature strongly. A strong civil society that emerged in the last decades of the old Federal Republic has taken root. The Berlin Republic shares with the Bonn Republic a commitment to democracy. Significant progress has been made in the normalization of the Federal Republic's international status, and the relationship of German citizens to their state is characterized by a new national consciousness that combines distinct layers of criticism and pride, love of one’s homeland, and international openness. It is precisely due to the successful remaking of cultural norms that nationalistic rhetoric, an emphasis on traditional gender role models, and anti-immigration sentiment reasserted themselves among some groups.

In September 2021, the British news magazine The Economist published its seventh special issue on Germany since the mid-1990s. Their titles allow a glimpse at core topics of the most recent decades: “Divided Still” (1996), “An Uncertain Giant” (2002), “Waiting for a Wunder” (2006), “Older and Wiser (2010), “Reluctant Hegemon” (2013), “The New Germans” (2018) and “After Angela” (2021). Germany today, so the editors in 2018, is both more open and more fragmented. However, the centrist consensus shared by the great majority of elites and the public as well as the adaptability of its policies may bode well for mastering future challenges.[44]..\The title “After Angela” refers to her lengthy tenure at the helm of and her impact on the Federal Republic but also notes multiple challenges that lie ahead. Indeed, when work of the new government started in December 2021, the coalition partners SPD, Alliance 90/The Greens and FDP put the country’s modernization front and center. But within three months, the national and international landscape changed dramatically when Russian troops invaded Ukraine. Chancellor Olaf Scholz promptly pronounced a sea change (Zeitenwende) in foreign and security policy, stoking anew the ongoing debate about Germany’s international role and its failure to adequately fund its military, the Bundeswehr. Importantly, it also brought scrutiny to Germany’s close relations with Russia. At the forefront was the Nord Stream II pipeline project which would have further increased Germany’s already high energy dependence on Russia. Millions of Ukrainian citizens fled their home country, testing once more Europe’s and Germany’s ability to house and integrate large number of migrants. The war in Ukraine and the economic sanctions against Russia forced a major remake of Germany’s energy policy. Consumer energy costs soared and Germany had to find new energy sources to compensate for the loss of cheap Russian gas to sustain its energy-intensive industries. Internal coalition squabbles made negotiating these issues more taxing.

Authoritarian regimes have been on the rise worldwide and polarization and fragmentation of the political landscape have become a hallmark of many democratic regimes. Social and political divisions have deepened. Military budgets rise amid renewed conflict and international competition for influence; trade disputes have become more common. Domestic and international configurations of power are in flux. In these times of transition and despite political, economic, and social challenges, Germany continues to fare well compared to many other countries. How their political leaders respond to important shifts in the domestic and international environments matters not just for future generation of Germans but will impact the future of Europe.