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Wade Jacoby

This article offers a corrective to the notion that German ordoliberal ideology is the key to understanding German policy behavior during the Eurocrisis and, by extension, to the contours of the electoral debate in fall 2013. First, it shows that ordoliberal thought underdetermines policy choices. That is, different actors clearly influenced by ordoliberal thinking and often stressing different aspects of the broader ordoliberal cannon are arguing for more or less diametrically opposed policy solutions. Second, the article provides evidence that this deep divide inside the ordoliberal policy community has contributed additional incentives to the tentative and inconclusive policy choices of the government throughout much of the Eurocrisis. Third, the article extends the analysis of this very cautious policymaking into the campaign phase and the subsequent coalition agreement. It explains why the two major German parties—including an SPD with a much thinner attachment than the CDU to ordoliberalism—sought to play down the Eurocrisis in their campaigns and in their subsequent coalition agreement. One implication is the low probability of German policy change despite ideological differences.

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Isabelle Hertner and Alister Miskimmon

This article outlines how Germany has sought to project a strategic narrative of the Eurozone crisis. Germany has been placed center stage in the Eurozone crisis, and as a consequence, the German government's crisis narrative matters for the future of the common currency. We highlight how the German government has sought to narrate a story of the cause of the Eurozone crisis and present policy solutions to influence policy decisions within the EU and maintain domestic political support. This focus on the public communication of the crisis is central to understanding the development of Germany's policy as it was negotiated with EU partners, the U.S. and international financial institutions. We draw on speeches and interviews by Chancellor Angela Merkel and two of her senior cabinet ministers delivered at key moments of the Eurozone crisis between May 2010 and June 2012. The article argues that while Merkel and her governments have been able to shore up domestic support for her Eurozone policies, she has struggled to find a coherent strategic narrative that is both consistent with German domestic preferences and historical memory, and with those of other Eurozone members.

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Rainer Hillebrand

This article looks critically at the widely held view that Germany has not done enough to help overcome the Eurozone crisis. According to this line of argument, Germany has refused to comprehensively bail out crisis countries, offer mutual support in order to counter speculative attacks or endorse demand-side growth policies. This is allegedly because of a more narrowly defined national self-interest, increased EU-skepticism, and hegemonic ambitions. This article takes the perspective that such criticisms are primarily rooted in a Keynesian reading of the Eurozone troubles, whereas German policies are informed by another rationale: the ideas of so-called ordoliberalism. Generally, this traditional German school emphasizes the importance of principles, rule-based behavior, and long-term goals—and it believes in the (microeconomic) functioning of markets. Consequently, ordoliberals perceive the crisis as resulting from unsustainable debt levels and a lack of competitiveness in southern Europe, concomitant with a failure of Eurozone institutions. Based on this diagnosis, policy proposals are primarily targeted at debt reduction, as well as structural and EU institutional reforms. While Germany's crisis policy thus appears rational from an ordoliberal perspective, it is considered to be at variance with, and inadequate from the viewpoint of a Keynesian approach.

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The Eurozone Crisis, Greece and European Integration

Anthropological Perspectives on Austerity in the EU

Sally Raudon and Cris Shore

Around 2010, a shift in the EU-understanding of austerity took place – from a future-orientated vision based on concepts of solidarity, cohesion and subsidiarity, to a crisis-driven present shaped around the imperatives of immediate fiscal discipline and debt repayment. This has had contradictory effects, producing widespread divisions, disunity and rising nationalism across Europe on one hand, and new forms of social solidarity and resistance on the other.

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Joachim Schild

France and Germany played a highly visible leadership role during the management of the Euro crisis and the efforts to design a reform governance framework for the Euro area. This article provides a conceptualization of this bilateral leadership, which is then applied to trace the process of Franco-German leadership during the ongoing crisis of the Euro area. Franco-German leadership grew ever more important as the crisis deepened. After the French presidential election of 2012, however, the divergences between the two core states of the Euro area deepened and made the exercise of joint leadership more difficult to achieve. I consider this leadership role to be based on a compromise by proxy logic in which France and Germany, starting from divergent positions, strike bilateral compromises acceptable to other member states that feel their own interests are represented by either France or Germany. Their common capacity to find suitable remedies to cope with crisis, however, is not beyond doubt. The Franco-German approach followed an additive logic, combining the temporary and permanent financial support schemes-a French preference-with a concomitant strengthening of fiscal rules advocated by Germany. In the end, the two governments did not develop a common comprehensive strategy based on a shared conceptual framework.

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Charlotte Galpin

The European Union has been in its biggest ever crisis since the onset of the Greek sovereign debt crisis in 2010. Beyond the political and economic dimensions, the crisis has also sparked discussions about Germany's European identity. Some scholars have argued that Germany's behavior in the crisis signals a continuation of the process of “normalization” of its European identity toward a stronger articulation of national identity and interests, that it has “fallen out of love” with Europe. This article will seek to reassess these claims, drawing on detailed analysis of political and media discourse in Germany—from political speeches through to both broadsheet and tabloid newspapers. It will argue that the crisis is understood broadly as a European crisis in Germany, where the original values of European integration are at stake. Furthermore, the crisis is debated through the lens of European solidarity, albeit with a particular German flavor of solidarity that draws on the economic tradition of ordoliberalism. Rather than strengthening expressions of national identity, this has resulted in the emergence of a new northern European identity in contrast to Greece or “southern Europe.”

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From Crisis to Resistance?

‘Exception’, Neo-liberalism, and Two Voices in the Left

Theodoros Rakopoulos

Christos Laskos and Euclid Tsakalotos, Crucible of Resistance: Greece, the Eurozone and the World Economic Crisis (London: Pluto Press, 2013), 192 pp. ISBN 9780745333809.

Costas Douzinas, Philosophy and Resistance in the Crisis: Greece and the Future of Europe (London: Polity Press, 2013), 220 pp. ISBN 9780745665443.

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Beverly Crawford Ames and Armon Rezai

Kindleberger’s theory of hegemonic stability states that fixed exchange rate regimes require a leader that will provide it with disproportionate resources to ensure stability. Applying his theory to European monetary cooperation, we argue that, like the tools of Goethe’s “Sorcerer’s Apprentice,” European Monetary Union was constructed as a “self-regulating system,” and it threatens to run amok without a hegemonic leader. Germany has exercised “soft hegemony” in Europe, providing the European Union with disproportionate resources to stabilize the single market. It has the capability to be the Eurozone’s leader. But, by 2017, blinded by its ordoliberal ideology, i t refused to do so, instead placing the burden of cooperation on the weak. If Germany continues to refuse to play the role of the hegemonic leader, European Monetary Union faces collapse.

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Brigitte Young and Willi Semmler

Only a decade ago, slow growth and high unemployment plagued Germany, but the "sick man of Europe" has now moved to outperform the Eurozone average growth since the second quarter of 2010. This confirms Germany's recovery and its status as the growth engine of the continent. This surely is a success story. While Germany (also Austria and the Netherlands) is prospering, the peripheral countries in the Eurozone are confronted with a severe sovereign debt crisis. Starting in Greece, it soon spread to countries such as Ireland, Portugal, and Spain. In the course of the debate, Germany was blamed for the imbalances in Europe. In short, German export performance and the sustained pressure for moderate wage increases have provided German exporters with the competitive advantage to dominate trade and capital flows within the Eurozone. Thus, Germany is seen as the main beneficiary of the EURO. This argument, however, is vehemently disputed within Germany. Many economists and political leaders reject this argument and point to the flagrant lack of fiscal discipline in many of the peripheral countries. Some prominent economists, such as Hans-Werner Sinn, even disputes that Germany was the main beneficiary of the Eurozone. The paper analyzes the two sides of the controversy, and asks whether we are witnessing a more inwardlooking and Euroskeptic Germany. These issues will be analyzed by first focusing on the role of Germany in resolving the sovereign debt crisis in Greece, and the European Union negotiations for a permanent rescue mechanism. We conclude by discussing some possible explanations for Germany's more assertive and more Euroskeptic position during these negotiations.

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Alexandra Hennessy

How do political parties respond to a major economic shock? This article studies this question in the context of the eurozone crisis. Specifically, I analyze the partisan appeals made by German politicians in the run-up to the 2013 federal election in Germany. Contrary to existing models of party responsiveness, I argue that enacting quick crisis resolution mechanisms is not always the main concern of reelection-seeking politicians. Instead, officials may have incentives to deliberately withhold emergency measures in an effort to win a mandate for more comprehensive policy solutions later. The findings have implications for notions of democratic accountability.