Deutschmark nationalism and Europeanized identity: Exploring identity aspects of Germany's adoption of the Euro

Abstract

What does the adoption of the euro tell us about German national identity? Are there elements of national identity that can help explain Germany's acceptance of European monetary union? The prevailing literature often portrays the internal German debate about the euro as a battle between Germany's ‘Europeanized identity’ – which pushed in favor of the euro – and ‘Deutschmark nationalism’ and national economic pride – which emphasized retaining the Deutschmark. In contrast, this paper argues that the distinction between Germany's Europeanized identity and economic nationalism is exaggerated. Rather than viewing it as a constraint on German acceptance of the euro, economic pride already represents a form of post-national identity. Unlike language or ethnicity, economic pride does not function well as an identity marker. Deutschmark nationalism was so obviously a constructed form of identity that it was open to alternative interpretations as well. Most importantly, there is no logical barrier to expanding the principles behind Germany's economic success to the rest of Europe. The paper concludes that extending the basic principles of the German monetary order to the rest of Europe was a consistent solution to this interaction of different identity issues at stake in the German debate over the euro.

Notes

1. For an analysis of the monetary geography and the ‘one nation/one money’ formula see Benjamin Cohen, The Geography of Money (Ithaca: Cornell University Press, 1998).

2. On the process of national monetary unification in particular during the nineteenth century see Eric Helleiner, The Making of National Money: Territorial Currencies in Historical Perspective (Ithaca: Cornell University Press, 2003).

3. On the relationship between money and collective identity see Emily Gilbert and Eric Helleiner (eds.), Nation States and Money: The Past, Present and Future of National Currencies (London and New York: Routledge, 1999); Eric Helleiner, ‘National Currencies and National Identities’, American Behavioral Scientist 41 (1998), pp.1409–36; Helleiner, The Making of National Money; Matthias Kaelberer, ‘The Euro and European Identity: Symbols, Power and the Politics of European Monetary Union’, Review of International Studies 30 (April 2004), pp.161–78; Marcia Pointon, ‘Money and Nationalism’, in Geoffrey Cubitt (ed.), Imagining Nations (Manchester: Manchester University Press, 1998), pp.229–54.

4. For an evaluation of money's imagery see Jacques E.C. Hymans, ‘The Changing Color of Money: European Currency Iconography and Collective Identity’, European Journal of International Relations 10/1 (2004), pp.5–31.

5. For an analysis of these broader developments see Benjamin Cohen, The Future of Money (Princeton: Princeton University Press, 2003).

6. The conceptual argument made in this section is valid for the 11 countries that joined EMU as well as the three countries that decided to stay out of EMU. An investigation as to why Britain, Denmark and Sweden are exceptions to my generalization here is beyond the scope of this essay. Similarly, I will not address the issue of enlargement to Central and Eastern European countries.

7. The exceptions were late twentieth century Dutch banknotes, which featured ‘post-modern’ conceptual designs rather than depictions of recognizable entities. For analysis of images on European banknotes see Hymans, ‘The Changing Color of Money’.

8. Formally, the EMS was built around a basket currency, the European Currency Unit (ECU). However, in reality the strongest currency within the system became the focal point for all others. For an explanation of the basic dynamics at stake here, see Matthias Kaelberer, Money and Power in Europe: The Political Economy of European Monetary Cooperation (Albany: State University of New York Press, 2001).

9. On these mechanics of the EMS see Daniel Gros and Niels Thygesen, European Monetary Integration (London: Longman, 1992); R.W. Hafer and A.M. Kutan, ‘A Long-Run View of German Dominance and the Degree of Policy Convergence in the EMS’, Economic Inquiry 32/4 (1994), pp.684–95; Heinz-Dieter Smeets, ‘Does Germany Dominate the EMS?’ Journal of Common Market Studies 29/1 (1990), pp.37–52.

10. Kathleen R. McNamara, The Currency of Ideas: Monetary Politics in the European Union (Ithaca: Cornell University Press, 1998).

11. As cited in Cris Shore, Building Europe: The Cultural Politics of European Integration (London and New York: Routledge, 2000), p.109.

12. Elie Cohen, ‘The Euro, Economic Federalism, and National Sovereignty’, in Anthony Pagden (ed.), The Idea of Europe: From Antiquity to the European Union (Cambridge: Cambridge University Press, 2002), p.265.

13. For data on the psychology of national monies and the euro, see Carole B. Burgoyne and David A. Routh, ‘National Identity, European Identity and the Euro’, in Keith Cameron (ed.), National Identity (Exeter: Intellect, 1999), pp.107–24.

14. The Netherlands and – partially – Belgium would not ordinarily be considered weak currency countries. However, they did not exercise monetary policy-making authority either. As a matter of fact, they were tied to Germany even more thoroughly and for a longer time period than others in the EMS. For a definition of weak and strong currency country status see Kaelberer, Money and Power in Europe.

15. Thomas Risse, ‘The Euro between National and European Identity’, Journal of European Public Policy 10/4 (2003), pp.497–8.

16. For assessments of these debates see Jakub Borowski, ‘Costs and Benefits of Poland's EMU Accession; A Tentative Assessment’, Comparative Economic Studies 46/1 (2004), pp.127–45; Lucio Vinhas De Souze and Bas Van Aarle, Euroarea and the New EU Members: Monetary and Exchange Rate Strategies (New York: Palgrave, 2003); and Susan Schadler, ‘Charting a Course Toward Successful Euro Adoption’, Finance and Development 41/2 (2004), pp.29–33.

17. Cohen, ‘The Euro, Economic Federalism, and National Sovereignty’, p.276.

18. For interesting scholarly treatments of this subject see Dorothee Heisenberg, The Mark of the Bundesbank: Germany's Role in European Monetary Cooperation (Boulder: Lynne Rienner, 1999); Karl Kaltenthaler, Germany and the Politics of Europe's Money (Durham and London: Duke University Press, 1998); Peter Henning Loedel, Deutsche Mark Politics: Germany in the European Monetary System (Boulder: Lynne Rienner, 1994); Andrew Moravcsik, The Choice for Europe: Social Purpose and State Power from Messina to Maastricht (Ithaca: Cornell University Press, 1998).

19. On trade interests see in particular Moravcsik, The Choice for Europe; on the connection between German reunification and EMU see Kaltenthaler, Germany and the Politics of Europe's Money; and Kenneth Dyson and Kevin Featherstone, The Road to Maastricht: Negotiating Economic and Monetary Union (Oxford: Oxford University Press, 1999).

20. On the impact of memory see in particular Thomas Banchoff, ‘German Policy Towards the European Union: The Effects of Historical Memory’, German Politics 6/1 (1997), pp.60–76; Thomas Banchoff, The German Problem Transformed: Institutions, Politics, and Foreign Policy (Ann Arbor: University of Michigan Press, 1999).

21. Anne-Marie Le Gloannec, ‘On German Identity’, in Michael Mertes, Steven Muller and Heinrich August Winkler (eds.), In Search of Germany (New Brunswick and London: Transaction Publishers, 1996), p.155.

22. Michael Merlingen, ‘Identity, Politics and Germany's Post-TEU Policy on EMU’, Journal of Common Market Studies 39/3 (2001), p.475.

23. Kenneth Dyson and Kevin Featherstone, ‘EMU and Economic Governance in Germany’, German Politics 5/3 (1996), p.326.

24. For an analysis of these themes see, in particular, Banchoff, ‘German Policy towards the European Union’ and Dyson and Featherstone, ‘EMU and Economic Governance in Germany’.

25. For contrasting positions on this issue see Kaltenthaler, Germany and the Politics of Europe's Money, and Moravcsik, The Choice for Europe.

26. See Thomas Risse, Daniela Engelmann-Martin, Hans-Joachim Knopf and Klaus Roscher, ‘To Euro or Not to Euro? The EMU and Identity Politics in the European Union’, European Journal of International Relations 5/2 (1999), pp.147–87; Thomas Risse and Daniela Engelmann-Martin, ‘Identity Politics and European Integration: The Case of Germany’, in Anthony Pagden (ed.), The Idea of Europe: From Antiquity to the European Union (Cambridge: Cambridge University Press, 2002), pp.287–316 for analyses of this pattern.

27. Risse, ‘The Euro Between National and European Identity’.

28. Dyson and Featherstone, ‘EMU and Economic Governance in Germany’, p.327.

29. On the linkage between stabilizing the single market and currency unification see Barry Eichengreen, ‘European Monetary Unification’, Journal of Economic Literature 31 (September 1993), pp.1321–52

30. For some aspects of this economic culture see: Merlingen, ‘Identity, Politics and Germany's Post-TEU Policy on EMU’.

31. Konrad H. Jarausch, Hinrich C. Seerb and David P. Conradt, ‘The Presence of the Past: Culture, Opinion, and Identity in Germany’, in Konrad H. Jarausch (ed.), After Unity: Reconfiguring German Identities (Providence: Berghahn Books, 1997), p.41.

32. See Dieter Haselbach, ‘“Soziale Marktwirtschaft” als Gründungsmythos: Zur Identitätsbildung im Nachkriegsdeutschland’, in Claudia Mayer-Iswandy (ed.), Zwischen Traum und Trauma – Die Nation: Transatlantische Perspektiven zur Geschichte eines Problems (Tübingen: Stauffenburg Verlag, 1994), pp.255–66; Werner Meyer, Mythos Deutsche Mark: Zur Geschichte einer abgeschafften Währung (Berlin: Aufbau Taschenbuch Verlag, 2001).

33. Klaus Műller, ‘Nationalist Undercurrents in German Economic Liberalism’, in Eric Helleiner and Andreas Pickel (ed.), Economic Nationalism in a Globalizing World (Ithaca: Cornell University Press, 2005), p.145.

34. Michael Mertes, ‘Germany's Social and Political Culture: Change through Consensus?’ in Michael Mertes, Steven Muller and Heinrich August Winkler (eds.), In Search of Germany (New Brunswick and London: Transaction Publishers, 1996), p.6.

35. For the standard-setting role of Germany's low inflation within in Europe see McNamara, The Currency of Ideas.

36. McNamara, The Currency of Ideas.

37. It is noteworthy that in addition to the structural asymmetry in monetary power between Germany and other EU countries, the nexus between money and identity added to German bargaining power over. The fact that the Deutschmark constituted a forceful symbol provided German policy makers with additional leverage in the Maastricht negotiations.

38. Both France and Italy initially resisted German demands on these points. For a detailed description of the bargaining process along these lines see Kaelberer, Money and Power in Europe.