establishment of the Common Market in 1958.
Management and trade unions were prepared to
work together, investment provided up-to-date
production methods and German goods gained a
reputation for quality in a widening world market
hungry for goods. The over-valuation of the
German currency during the 1950s and beyond
acted as a spur to efficiency and productivity.
Ultimately it was the skill and will of management
and workers that created the ‘miracle’ of recovery
based on export-led growth. The Germans had
come to expect improvements in their standard of
living and low inflation; a sound economy was
regarded as the natural state of affairs.
By 1963 Erhard no longer received the credit for
Germany’s prosperity. The heir apparent had
been kept too long in the wings. Now as federal
chancellor he lacked lustre and soon ran into dif-
ficulties with his FDP partners and particularly
with the ambitious Franz Josef Strauss. There
were Cabinet squabbles over Erhard’s preference
for America to de Gaulle’s France, over the
support price for grain, which caused a deep
Franco-German rift, and over the supply of arms
to Israel. The electorate in the 1960s, however,
was more concerned with continuing the eco-
nomic policies that had served them so well and
were not about to entrust government to the
Social Democratic opposition. Despite Erhard’s
declining prestige, the CDU/CSU won another
resounding electoral victory in 1965. Just a year
later, the FDP ministers resigned; the economic
climate had worsened temporarily, and between
1965 and 1967 the gross national product grew
by less than 2 per cent. Haunted by fears of infla-
tion – another trauma of the 1920s the Germans
could not shake off – government expenditure
was cut back and unemployment averaged 3 per
cent. To German perceptions it appeared as if a
grave crisis was at hand. What in fact had
occurred was no more than a swing in the busi-
ness cycle. As the economy developed the Federal
Republic could not sustain the rates of growth of
earlier years. But Erhard had lost the confidence
of his own party, the CDU, and Strauss and other
leading politicians were ready to fight for the
succession; in the event, Kurt Georg Kiesinger
emerged as his successor and leader of the
CDU/CSU.
The outcome of all the political intrigues and
negotiations was an astonishing one. The FDP
became the opposition party, and the CDU/CSU
and SPD led by the charismatic former mayor
of West Berlin, Willy Brandt, formed a Grand
Coalition in December 1966 under Chancellor
Kiesinger, with Brandt as his deputy and foreign
minister. The coalition had been possible only
because the SPD had formally abandoned its
Marxist doctrines in 1959 at the Gotha party con-
ference. To win the opportunity of becoming the
party of government, the SPD moved to the
political centre. Like the CDU, the SPD now
turned itself into an umbrella party appealing to
a wide spectrum, from the socialist left, who had
nowhere else to go, to the liberal centre. This
became its source of electoral strength, but also
brought with it an internal weakness as the left
wing came into conflict with its right wing. The
years of the Grand Coalition also saw a kind of
midlife crisis for the Federal Republic. A new,
young post-war electorate, bored with bourgeois
values and prosperity, made its presence violently
felt in 1967. Traditional society in the Federal
Republic and elsewhere in Europe and the US
was on the eve of fundamental changes.
1
WEST GERMANY 513
West German unemployment and production, 1950–1970/1
Unemployment Index of growth of industrial production
Number %
1950 1,870,000 8.0 100
1960 270,000 1.0 248
1970/1 185,000 0.7 435
