Still waiting for Paris: Germany’s reluctant hegemony in pursuing political union in the Euro Area

Abstract

After decades proposing the creation of a political union to make the euro sustainable, Germany has not utilised the ‘window’ offered by the Eurozone crisis to pursue this goal. Using the conceptual devices of the ‘Chartalist theory of money’ (which states that a monetary union cannot work without a political union) and ‘hegemony’, three possible explanations are explored in this paper. (1) Germany is slowly becoming a ‘normal’ power; (2) The German public has lost its enthusiasm for European integration; (3) Germany remains a reluctant hegemon and once it has seen that France is still not ready for political union it has refrained from actively promoting this ideal. The conclusion of the paper is that the first two explanations have merits, but the third remains more convincing. Berlin is still determined to build a more federal Europe. The question is rather whether Paris is ready to participate in this endeavour.

Keywords:

• Germany
• political union
• France
• Chartalism
• hegemony
• European integration

Acknowledgments

I would like to thank Albrecht Sonntag, Thomas Hoerber, Federico Steinberg, Ignacio Molina, Michele Chang, Amy Verdun, Joachim Schild, William E. Paterson, Simon Bulmer and two anonymous reviewers for their valuable comments on earlier versions of this paper.

Notes

1. As early as 1963, the then president of the Bundesbank, Karl Blessing, argued that the introduction of monetary union should be conditional on the creation of a political union (see BUBA 2012).

2. I thank Albrecht Sonntag for pointing this out to me.

3. Fischer acknowledged: ‘the term “federation” irritates many Britons. But to date I have been unable to come up with another word. We do not wish to irritate anyone’. This last sentence could also be directed to Paris.

4. The reasons for the rejection of the constitutional treaty were multiple. The perceived pro-market character of the text was perhaps a bigger reason than its supranational objectives.

5. Interview with senior German official, London, 7 November 2013.

6. In the 2014 EP elections, in order to enhance the democratic character of the process and set a precedent, most political groupings decided to elect lead candidates for the position of President of the Commission, a post usually appointed by the European Council. Since German or German-speaking actors led the process, it was labelled the Spitzenkandidaten logic, ‘lead candidates’ in German. As one of the reviewers has pointed out, the concept Spitzenkandidaten is borrowed from the German federal elections.

7. The 2013 Fall Eurobarometer (No.80) survey shows that 69% of Germans were in favour of the Spitzenkandidaten process. The most recent Eurobarometer (Spring 2016, No.85) also shows that 73% of the German public is in favour of EMU.

8. Interviews conducted with German officials in Berlin between May and July 2015 confirm this interpretation.

9. Conversation with senior German official, Madrid, 21 July 2014, who acknowledged that smaller states such as Austria and The Netherlands have voiced their concerns about the intergovernmental solutions adopted during the crisis.

10. This was acknowledged by a senior German official, Madrid, 21 July 2014.

11. I thank Nicolas Jabko for illustrating me this point.

12. The Quai d’Orsay and the Quartier de Bercy are, respectively, the locations of the HQ of the Ministry of Foreign Affairs and the Ministry of Economy and Finances of France.

13. This idea came up several times in informal conversations with French officials and scholars between 2012 and 2016.