Socialism can be very successful with relatively small, steady and homogenous populations of advanced cultures. But as the population increases through birth and the immigration of differing, often conflicting cultures, Socialism begins to fail.
Putting my socialism monocle on:
Germany's population, up till the Sixties, was relatively small, steady, and homogenous. And then they threw open their doors in their Gastarbeiter program and signed agreements in the mid-Fifties with various countries, which created a huge influx of foreigners, primarily Turkish.
Those initial workers have settled and have had families of their own x2 generations now. To a large extent, these people have assimilated into the country, but there are still large sections of Berlin (Kreuzberg) and other large cities that have entire districts -- poor and ghetto-like -- in which these people live.
I don't see any evidence that Germany's socialism is failing, certainly in comparison with say, Greece or Portugal. And they certainly have their share of "diverse cultures", especially since the Wall has come down and the country has been overrun by eastern Europeans looking for that gubmint handout that they're so accustomed to.