The Global Financial Crisis and the Euro Crisis as Contentious Issues in German-American Relations

Abstract

This article examines the impact of the 2008–09 global financial crisis on the dynamics of transatlantic relations. The financial crisis has revealed systemic weaknesses in the governance of the eurozone and fundamental divisions between national governments in the EU on how these should be addressed. In the context of German domestic politics the financial crisis has resulted in increasing scepticism towards US-style liberal market capitalism. Germany managed to maintain its strong economic standing under the adverse circumstances of the financial crisis. Domestically the post-crisis political consensus has hence emphasised the strengths of Germany’s coordinated market economy in contrast to the liberal model of the US. This article offers a comparative analysis of how the crisis was perceived and how it has been addressed in Germany and the US. It argues that the financial crisis has significantly changed the parameters of the bilateral relations between Germany and the US in the context of wider EU–US transatlantic relations.