ABSTRACT
Scholars have portrayed the 1980s as a decade in which the partisan conflict between Christian Democratic Party (CDU) and Social Democratic Party (SPD), as well as factional divisions within the parties. They argue that important reforms were already met with fierce resistance by the SPD opposition during this period. It was not until the advent of the first economic recession after German unification at the end of 1992 that conflict began to slowly emerge in the CDU and SPD, trade unions, as well as employers associations. It was mainly the trade unions who began to quit the ranks of the policy community. In order to understand the prevalence of the old labor market policy (LMP) regime logic, it considers the institutional context of German LMP. The conflict in the camp of employers began for the first time to slowly translate into concrete reform proposals aiming at a liberalization of the traditional German LMP regime in the political arena.
