The mark of the Bundesbank. Germany’s role in European monetary cooperation

The mark of the Bundesbank: Germany's role in European monetary cooperation

This study focuses on the interaction of the German federal government, the Bundesbank, the other EU member governments and the EU institutions to explain German co-operation in the various exchange-rate co-ordination regimes since the break up of Bretton Woods. The author asserts that understanding the chancellor's or the Bundesbank's preferences alone is not enough to explain the outcomes of the various negotiations. The interaction of their preferences and the reaction of the other EU Member States to those preferences are critical to understanding the outcomes of negotiations.

Chapter one provides an introduction to the book. Chapter two, 'The Bundesbank rejects unilateral floating', begins the empirical section of the book. It documents numerous conflicts between the Bundesbank and the federal government about international commitments in the years 1968-1978. Chapter three, 'Renegotiating the EMS agreement', focuses on the conflicts between the federal government and the Bundesbank during the course of the EMS negotiations in 1978. Chapter four, 'The Bundesbank prevents change', shows how the Bundesbank-federal government relationship changed as the EMS established itself as a viable exchange-rate co-ordinating mechanism. Chapter five, 'Negotiating the monetary union', analyses the role of the Bundesbank in the negotiations of EMU, highlighting the Bundesbank's assertiveness vis-à-vis the federal government and the other EU states. In Chapter six, 'The EMS crises', the Bundesbank's refusal to consider monetary policies to help the other EU Member States is shown to be a primary cause of the currency crises of 1992-1993. Chapter seven, 'The ongoing importance of the Bundesbank', demonstrates that the Bundesbank's dominance continued after 1993, even though the Maastricht Treaty had been signed and ratified.

The book concludes with a presentation of an explanation of Germany's role in European monetary co-operation, based on the dynamics of the history of the Bundesbank-government relationship.