Skip to main content Accessibility help
×
Home
  • Print publication year: 2010
  • Online publication date: June 2012

14 - Shared sovereignty in the European Union: Germany's economic governance

Summary

This chapter explores the question of why West Germany, with the most powerful economy within the European Union (EU), chose to give up its stable, highly prized deutsche mark to join the European Monetary Union (EMU) and accept significant constraints on its fiscal and monetary policies. The answer for Germany lies in a series of historical stages after 1945, each reflecting an increasing acceptance of the need to abandon balance-of-power politics for a multiple-level shared sovereignty through economic and political integration with other EU member states. In domestic policy, West Germany developed a “social partnership” in which power and decision-making was shared among major interest groups. In foreign policy, the parallel system was called a “security partnership” with major and minor powers in Europe and North America. As a result, Germany based its international actions on multilateral institutions such as the United Nations, the North Atlantic Treaty Organization, the Council of Europe, the Conference on Security and Cooperation in Europe, and the European Community (later European Union). Internally this approach ensured that no major interest, neither big business nor labor, would dominate. Internationally the multilateral policy encouraged other states to accept Germany's increasing economic strength without fearing it would be harnessed to national political ambitions. The ultimate proof of the wisdom of this approach was the relative ease with which Germany's neighbors, allies, and rivals accepted the unification of the Federal Republic of Germany and the German Democratic Republic.

Related content

Powered by UNSILO
Katzenstein, Peter, “Taming of Power: German Unification, 1989–1990,” in Woo-Cumings, Meredith and Loriaux, Michael (eds.), Past as Prelude: History in the Making of a New World Order (Boulder: Westview Press, 1993)
Wells, Sherrill Brown, Pioneers of European Integration and Peace, 1945–1963 (Boston: Bedford/St. Martin's, 2007)
Duchêne, François, Jean Monnet: The First Statesman of Interdependence (New York: W. W. Norton & Company, 1994)
Schwarz, Hans-Peter, Konrad Adenauer, vol. I (Providence, RI: Berghahn Books, 1995)
Schwartz, Thomas A., America's Germany: John J. McCloy and the Federal Republic of Germany (Cambridge, MA: Harvard University Press, 1991)
Monnet, Jean, Memoirs (Garden City, NY: Doubleday, 1978)
Dinan, Desmond, Europe Recast: A History of European Integration (Boulder: Lynne Rienner, 2004)
Rioux, Jean-Pierre, The Fourth Republic, 1944–1958 (Cambridge University Press, 1987)
Gillingham, John, Coal, Steel, and the Rebirth of Europe, 1945–1955 (Cambridge University Press, 1991)
Eden, Anthony, Full Circle: The Memoirs of Sir Anthony Eden (London: Cassell, 1960)
May, Ernest R., “The American Commitment to Germany, 1949–1955,” in Kaplan, Lawrence S. (ed.), American Historians and the Atlantic Alliance (Kent, OH: Kent State University Press, 1991)
Gilbert, Mark, Surpassing Realism: The Politics of European Integration since 1945 (Lanham, MD: Rowman & Littlefield, 2003)
Urwin, Derek W., The Community of Europe: A History of European Integration Since 1945 (London: Longman, 1991)
Dinan, Desmond, “Building Europe: The European Community and the Bonn–Paris–Washington Relationship, 1958–1963,” in Helga Haftendorn et al. (eds.), The Strategic Triangle: France, Germany, and the United States in the Shaping of the New Europe (Washington, DC: Woodrow Wilson Center Press, 2006)
Dyson, Kenneth and Featherstone, Kevin, The Road to Maastricht: Negotiating Economic and Monetary Union (Oxford University Press, 1999)
Urwin, Derek W., The Community of Europe, 2nd edn. (London: Longman, 1995)
Lankowski, Carl, “Germany: Transforming Its Role,” in Zeff, E. E. and Pirro, E. B. (eds.), The European Union and the Member States (Boulder: Lynne Rienner, 2006)
Dinan, Desmond (ed.), Encyclopedia of the European Union (Boulder: Lynne Rienner, 1998)
Verdun, Amy, “A Historical Institutionalist Analysis of the Road to Economic and Monetary Union: A Journey with Many Crossroads,” in Meunier, Sophie and McNamara, Kathleen R. (eds.), Making History: European Integration and Institutional Change at Fifty (Oxford University Press, 2007)
Verdun, Amy, European Responses to Globalization and Financial Market Integration: Perceptions of Economic and Monetary Union in Britain, France, and Germany (Basingstoke: Macmillan, 2000)
Grieco, Joseph M., “State Interests and Institutional Rule Trajectories: A Neorealist Interpretation of the Maastricht Treaty and European Economic and Monetary Union,” in Frankel, Benjamin (ed.), Realism: Restatements and Renewal (London: Frank Cass, 1996)
Bulmer, Simon J., “Shaping the Rules? The Constitutive Politics of the European Union and German Power,” in Katzenstein, Peter J. (ed.), Tamed Power: Germany in Europe (Ithaca: Cornell University Press, 1997)