Since the beginning of the global financial crisis a decade ago, Germany has asserted itself as Europe’s dominant economic power; by 2024 it will also have the largest military budget in the European Union. Yet if from the outside Germany looks like an economic powerhouse and a re-emerging geopolitical force, it is also embroiled in a deep social and political crisis.

When Angela Merkel became chancellor in 2005, the two big “Volksparteien” (the mass “catch-all” parties, the Christian Democratic CDU/CSU and the Social Democratic SPD), together still commanded 69.4 percent of the vote. Yet during her chancellorship, these parties have been forced to govern together in three ever-shrinking grand coalitions. Today, a year after federal elections saw a far-right party enter parliament for the first time since 1952, these two forces no longer represent a majority of Germans. The polls give them a combined tally of just 42 percent.

The political system built in the postwar period faces erosion and even fundamental transformation. However, this crisis in the party system is also connected to underlying social and economic processes. Today we see the end of the West German Dream, of an egalitarian “social market economy” with “prosperity for all,” added to the death of the East German Dream of a socialist society leaving capitalism’s insecurities, crises, and class divisions behind. Historians and social scientists always warned that the acceptance of liberal democracy in (West) Germany always depended on the existence of this kind of general welfare and universal social security. So how can it survive today?