Economic nationalism in Germany and Italy

Abstract

Nationalist blame games have accompanied the history of European integration at least since the 1960s. Often, the hegemonic position that the German economy, its export nationalism and its strong currency have occupied since the late 1960s has been the target. Italy, on the other hand, was categorised as a chronic deficit country whose unstable governments squander the successes of their export-strong industry through unsound budget management. Surprisingly, conflicts of this kind have often motivated further steps of integration. The European monetary union at the turn of the century was meant to end German currency nationalism and provide Italy with an external anchor for consolidation. However, the particularities of the German and Italian economies go too deep into their specific national histories, institutions and political practices to 'converge' in a European economy. The EU cannot solve conflicts of this kind, but it can offer solutions and institutional reforms - if the states involved are willing to participate.