ABSTRACT
This chapter argues that German fiscal performance depends on the political survival of governments. If the electoral risks of fiscal consolidation are high, governments will be very reluctant to introduce harsh measures. Active fiscal consolidation is therefore bound to the political context and the electoral fate of governments in particular. Hypothesizing the link between political survival and fiscal consolidation idea is not trivial. Germany is well known for its relatively conservative and moderate economic policies in general, and its fiscal conservatism in particular. In this sense, Germany is a least likely case for the problem of political survival. While electoral competition is still present, it is less problematic because blame sharing can reduce the reluctance to introduce unpopular reforms such as extending the retirement age. Electoral competition, however, has resurfaced as a political constraint. True, the CDU, and Merkel in particular, had a long honeymoon period in terms of public opinion, but electoral competition is fierce.
