On the Franco-German Euro Contradiction and Ultimate Euro Battleground

Jörg Bibow

Economics Working Paper Archive from Levy Economics Institute

Abstract: Highlighting that France and Germany held largely contradicting hopes and aspirations for Europe's common currency, this paper analyzes how the resulting euro contradiction conditioned the ongoing euro crisis as well as current strategies to resolve it. While Germany generally prevailed in hammering out the design of the euro policy regime, the German authorities have failed to see the inconsistency in their policy endeavors: the creation of a model whose workability presupposes that others behave differently cannot be made to work by forcing everyone to behave like Germany. This fundamental misunderstanding has made Germany the main culprit in the euro crisis, but it has yet to face the full consequences of its actions. Germany had sought every protection against the much-dreaded euro "transfer union," but its own conduct has made that very outcome inevitable. Conversely, having been disappointed in its own hopes for the euro, France is now facing the prospect of a lost generation-a prospect, shared with other debtor nations in the union, that has undermined the Franco-German alliance and may soon turn it into the ultimate euro battleground.

Keywords: Currency Union; Euro Policy Regime; Euro Crisis; Franco-German Partnership; Competitiveness; ECB Policies (search for similar items in EconPapers)
JEL-codes: E02 E42 E58 E61 E65 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-eec, nep-mac, nep-mon and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.levyinstitute.org/pubs/wp_762.pdf (application/pdf)

Related works:
Journal Article: On the Franco-German Euro Contradiction and Ultimate Euro Battleground (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lev:wrkpap:wp_762

Access Statistics for this paper

More papers in Economics Working Paper Archive from Levy Economics Institute
Bibliographic data for series maintained by Elizabeth Dunn ( this e-mail address is bad, please contact ).