Large-Scale and Green? The German Covid-19 Stimulus Package in International Comparison

Abstract

ABSTRACT The Covid-19 pandemic is a major global crisis the impact of which is likely to exceed the upheavals caused by the last financial and economic crisis of 2008/2009. Germany as an export-oriented economy faces tremendous economic threats in the aftermath of the pandemic such as the collapse of global supply chains, the lockdown of economic sectors and impending job losses. As a reaction, the German government adopted, much as in the previous financial crisis, fiscal stimulus packages as part of a Keynesian-style public spending programme to stabilise its economy. Yet, in addition, the German government explicitly conceptualised its reactions as part of a ‘Package for the Future’ (Zukunftspaket), interlinking it with the second big global challenge: climate change and environmental degradation. We evaluate the German stimulus package on both these goals by comparing it with stimulus packages passed in other G20 countries. Based on a Qualitative Comparative Analysis (QCA) added by a case study of Germany, we identify the driving determinants behind the fiscal policy reactions with regard to the size of the stimulus package as well as its contribution to adopt long-term environmental transformations.