The SPD and the German export-led model, from entrenching to rebalancing: different paths of policy 'redemption' in the 2010s

The literature on the German growth model (GM) has frequently highlighted bipartisan political consensus in maintaining policies aligned with the GM's macroeconomic requirements, including wage moderation and fiscal conservatism. These policies supposedly reflect the interests of a cross-class alliance in the export-sector, limiting the autonomy of ruling parties, regardless their partisanship. This paper focuses on the pivotal case of the SPD, a key actor behind both the Haartz Reforms and the debt-brake, and a supporter of domestic austerity, especially during the late 2000s and early 2010s. However, the party faced mounting pressures in the 2010s due to political-electoral and economic-distributional imbalances resulting from its previous policies and German export-led growth. These prompted the SPD to seek ways to "redeem" itself while at the same time "rebalance" the GM. This paper examines two distinct paths of "redemption" undertaken by the party, comparing the transformations of wage and welfare policies, which culminated in the introduction of the Statutory Minimum Wage, with the more complex trajectory in fiscal policy in the pre-COVID-19 2010s, in which the party struggled to change course. The paper argues that contrary to GM expectations, the SPD retained a considerable degree of agency from producer groups. For instance, the adoption of the SMW occurred despite significant business opposition, while the debt-brake remained despite favourable positions toward fiscal expansion among producer groups. First, it explores less-studied episodes-efforts of Social-democratic shift from supply-side policies back to more progressive positions. Second, it challenges the prevailing focus on material interests and structural power of export groups, presenting a more nuanced perspective on GM politics and change. Lastly, it offers empirical insights into the politics of the German GM, highlighting the agency and ideas of political actors during moments of crisis and contestation.