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, it 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.
Beverly Crawford Ames is Professor (emerita) of Political Science at the University of California Berkeley. She recently received fellowships from the Turkish National Science Foundation and the European Commission to study the demographics of the refugee crisis. In 2015, she became an “accidental volunteer,” aiding refugees on the streets of Izmir, Turkey, and was forever transformed into a scholar-activist. She has authored numerous books, articles, and chapters on Germany’s role in Europe and the world including: with Alexsia Chan, “The Power of German Public Opposition to ttip,” Business and Politics (Winter, 2017); with Kim B. Olsen, “The Puzzle of Persistence and Power in German Foreign Policy,” German Politics (Winter 2017); “Moral Leadership or Moral Hazard? Germany and the Refugee ‘crisis,’” forthcoming in Crisis, Resilience and the Future of the eu, ed. Akasemi Newsome, Marianne Riddvold, Jarle Trondal (Basingstoke); and with Ludger Helms and Femke van Esch “Merkel III: The curious rise of a ‘conviction leader’” (in progress).
Armon Rezai is Director of Policy at the Vienna Institute of International Economic Studies (wiiw) and Associate Professor of Environmental Economics at the Vienna University of Economics and Business (wu Wien). His research focuses on macroeconomic topics, such as growth and distribution and their application to environmental problems like climate change and economic policy. He has been Fulbright Fellow and Schrödinger Fellow of the Austrian Science Fund.