The Responses of European Economic Cultures to Europe’s Crisis Politics: The Example of German-Italian Discrepancies

During the past seven crisis years the asymmetry between the North and the South of Europe has become a core problem for the European integration project. In the political discussion two characteristic patterns prevail: while the North argues in favor of more structural reforms in the South, the South claims that the North is not showing enough solidarity. The harsh political discourse that Northern and Southern politicians increasingly engage in omits that Northern and Southern European economies function and work according to very different logics. While the Varieties of Capitalism literature has pointed this out since the 2000s, it remains focused on rational and institutional efficiency considerations. The paper moves beyond this one-dimensional approach complementing it by an exploration of the diversity of the economic culture in which Northern and Southern European economies are embedded. Adopting a neo-Weberian approach that revitalizes the ideas and concepts of the new school of German national economics, the paper argues that the economy unfolds not only within a set of institutions that are rationally trimmed to maximize profits but that these institutions evolve within a cultural environment composed of ideas, ideologies, traditions and collective sentiments of their citizens. The paper exemplifies this by discussing the cultural foundations and embeddedness of the Italian and German political economies and how the diverse needs of these two economies are voiced by central political actors in each country during the Euro crisis between 2010 and 2015. The paper concludes that rather than focusing on strategies of structural convergence, European institutional actors should perceive the variety of European economic cultures as an asset rather than an economic burden for the integration project.