Germany, the problem of leadership, and institution-building in EMU reform

ABSTRACT

This article examines the extent to which Germany has provided leadership in creating institutions to overcome the euro area crisis. Under which conditions does Germany act as a driver of institutional change, and what are the implications for the Economic and Monetary Union? Germany’s leadership record is mixed: while it took the lead in enhancing austerity, it refrained from fostering burden-sharing. As a result, EMU faces a persistent imbalance between enhanced institutions of supervision and insufficient institutions of financial assistance. Moreover, the article points out that current conditions for the emergence of German leadership in the euro area are unfavourable.

KEYWORDS:

• Economic and Monetary Union
• European integration
• Germany
• institutional change
• leadership

JEL CLASSIFICATION:

• F02
• F55
• H12

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. Translated by the author.

2. Translated by the author.

3. Translated by the author.

4. Translated by the author.

Additional information

Funding

This work was supported by the Social Science and Humanities Research Council of Canada (SSHRC) under Grant 611-2016-0153.