ECONOMIC CRISES, STRUCTURAL CHANGE 121
economic perspective, growing capital exports were certainly one of the
downsides associated with consistent trade balance surpluses. Export
trade may have stimulated domestic investments and sometimes off set a
sluggish domestic economy, but, at the same time, the FRG was transfer-
ring goods abroad whose equivalent value had to be invested as a credit
or in the form of foreign investments. Simultaneously, the surpluses put
upward pressure on the D-Mark and therefore drove up prices and costs,
which in turn created a lasting problem given the country’s increasing
reliance on exports.^68
Naturally, this high degree of integration within the global market was
also a potential problem regarding imports during phases of tougher in-
ternational competition. This was refl ected most poignantly in the suc-
cess of Japanese exports on the West German market in the 1970s and
1980s, but also in the growing share of newly industrializing countries in
West German imports of industrial goods. As the joint foreign trade pol-
icy of the EEC was more or less in tune with the GATT tariff reductions,
the protection aff orded to German industry was signifi cantly reduced on
this front. Protectionism shifted, as in other countries, from customs du-
ties to nontariff trade barriers, such as compulsory or “voluntary” import
quotas as well as targeted subventions that varied greatly from sector to
sector. In general, the Federal Republic counted among the countries that
were less inclined toward protectionism. As by far the largest portion of
the country’s foreign trade took place within the EEC and the European
Free Trade Association (EFTA), many sectors could hardly even contem-
plate possible ways to withdraw from competition through such mea-
sures, especially because the EC also controlled national subsidies and
could prohibit certain state aid programs by court order.^69
National reactions to the structural problems emerging in many of the
member states varied noticeably, however, and the economic and mone-
tary union outlined in the Werner Plan of 1970 seemed to retreat into the
distance. In the 1980s, economists and journalists began to attribute this
stagnation to a “eurosclerosis” of the EC and its member states. In part
because of the pressure exerted by such claims, the Single European Act
(SEA) was passed in 1986 with the aim of establishing a single market
and unifying economic and monetary policy. As a result of this treaty,
several concrete steps were taken toward a further liberalization of the
cross-border movement of goods, labor, and capital.^70
But, the economic eff ects of the single market should not be overes-
timated. Although trade within the EEC continued to grow, this political
integration had only a minimal eff ect on the specialization of the individ-
ual national economies.^71 The success of European industrial policies in
pioneering large-scale technologies in the IT and aerospace branches,