Montesquieu Instituut: van wetenschap naar samenleving

Germany versus The Netherlands to combat the euro crisis

donderdag 13 december 2012, 14:18

DEN HAAG (PDC) - Germany seems to have more advantages than The Netherlands in being a figurehead for strengthening the euro zone, stated Hanco Jürgens, PhD Researcher of the Amsterdam Institute for German Studies. During the fifth lecture of the series of the Montesquieu Institute he made an analytical comparison between The Netherlands and Germany. He did that by outlining the nations' governmental systems and their economies in terms of Gross Domestic Product (GDP), their successes and the involvement of social partners in policy-making.

Jürgens started off with similarities between the prominent countries. The neighbors need each other when it comes to trade and their more or less similar economic status and vision. Nevertheless, the PhD researcher also mentioned the differences: Germany is a federal nation, whereas The Netherlands is a de-centered unitary nation.  Moreover, the difference between the Dutch polder model and the German social market economy in terms of governance is that the Dutch involve social partners in policy-making. The Germans on the other hand let the state regulate the market and their policy. Although both countries are capitalistic, however the Dutch aim more for the stakeholder value and the Germans aim more for the shareholder value.

Above all, Hanco Jürgens compared the economies of both ‘Nachbarstaten’ – neighbor states- in extent to a possible figurehead for challenging the euro crisis on a supranational level. Both countries have booked successes in their economic dimension. There are several similarities when it comes to wage restraints, a low exchange rate of the Euro, high skill education and cuts in welfare arrangements. Yet Germany seem to have more economic success factors by doing trade with the Asians, the large German car industry and a booming economy of ‘hidden champions’ – rarely known Small and Medium Enterprises with a high rate on the global market and a revenue below €3,1 billion a year. Plugging up the results of the comparisons to extent of a possible figurehead to combat the euro crisis on a supranational level, it can be said that Germany has an additional advantage in both its economic policy-making as in its governmental structure which is very alike the European institutional level.

Due to the better economic success factors, Germany has the most beneficial policy in comparison to The Netherlands on the best approach in combating the sovereign debt crisis, according to Jürgens. Moreover, questions were raised about complicated comparisons between the nations and answered by Hanco Jürgens.