ABSTRACT
The trajectory of German welfare state reform looks paradoxical. When Helmut Kohl came to power in 1982, the programme of the conservative-liberal coalition led by him ostensibly emulated the neo-conservative agenda of Margaret Thatcher and Ronald Reagan. But – notwithstanding initial successes in consolidating public finance – the U-turn (Wende) proclaimed by the new majority did not really happen. Some minor deregulation of the labour market took place, the monopoly of the public service radio was abolished, and some steps toward privatization and deregulation of the public telecommunications monopoly were taken. Later, the process of Europeanization triggered more far-reaching deregulation and privatization of public services, which was largely decided with opposition support. But the core of the welfare state was left intact. Restrictions in social security benefits had already been initiated during the years since 1975, under the social-liberal government of Helmut Schmidt, and neither these nor further cuts after 1982 amounted to dismantling the traditional German Sozialstaat. The reform of the old age pensions law, passed in 1989 with the support of the social-democratic opposition, did not fundamentally affect the basic elements of the system. Still more, the launch in 1993 of nursing care insurance, pushed through after difficult bargaining processes with the opposition and considered as one of the major achievements in social policy in the early 1990s, was clearly indebted to the tradition of the Bismarckian welfare state. And warnings that it would eventually run funding risks comparable to those that might be faced by the old age pensions system were disregarded by most political actors.
