This text offers an interpretation of German economic performance. It covers economic policy and macroeconomic performance since the election of the Schroeder government, the Alliance of Jobs employment policy, German corporatism (including finance and industrial relations), the future of the corporate model in a global era and German innovation. The authors argue that while there are worrying aspects in macroeconomic performance, particularly high unemployment and net capital outflows, there are real reasons to be optimistic about Germany's future. The innovation system is dynamic, industrial policy is strong and the corporate model has intrinsic adaptability which has made it both durable and competitive through the centuries of industrialisation. Contributions come from established as well as younger commentators and the result is a treatment of an important topic that will appeal to anyone who has an interest in German politics or the German economy.