By Markus K. Brunnermeier, Harold James, Jean-Pierre Landau
Why is Europe's nice financial undertaking, the Euro, in difficulty? A string of financial problems in Greece, eire, Spain, Italy, and different Eurozone international locations has left observers considering no matter if the foreign money union can continue to exist. during this booklet, Markus Brunnermeier, Harold James, and Jean-Pierre Landau argue that the middle challenge with the Euro lies within the philosophical modifications among the founding international locations of the Eurozone, really Germany and France. however the authors additionally convey how those possible incompatible modifications could be reconciled to make sure Europe's survival.
As the authors show, Germany, a federal nation with powerful local governments, observed the Maastricht Treaty, the framework for the Euro, as a collection of principles. France, nevertheless, with a extra centralized procedure of presidency, observed the framework as versatile, to be overseen via governments. The authors speak about how the concerns confronted through the Euro have led its member states to target nationwide, in preference to collective, responses, a response defined by way of the resurgence of the conflict of financial principles: ideas vs. discretion, legal responsibility vs. cohesion, solvency vs. liquidity, austerity vs. stimulus.
Weaving jointly monetary research and old mirrored image, The Euro and the conflict of rules provides a forensic research and a street map for Europe's future.
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Additional info for The Euro and the Battle of Ideas
That superior German interconnectedness doubtless also constituted an economic advantage. The suspicion of centralizing principles in a federal state means that the Federal Republic of Germany insists more on the principle of parliamentary approval of legislation and also on checks through legal review by a supreme court (Constitutional Court, Bundesverfassungsgericht). A constant irritant to Germany’s partners in the European Union throughout the euro crisis was the German government’s worry about the need to obtain the approval of the Bundestag for each of the rescue packages.
France had fallen heavily in 1940, and its political, military, and economic elite had been completely discredited, not merely by the defeat but more enduringly by the subsequent cooperation or betrayal of the French elites. French thinkers became obsessed with economic planning. The reversal of economic cultures in both countries provides an extreme instance of the way that change—or progress—when it 41 chapter three occurs in Europe, almost always takes place in the aftermath of cataclysms and catastrophes.
The picture of Chancellor Merkel leaning on Hollande’s shoulder was widely diffused and interpreted as a symbolic reconciliation of the two European powers. France’s role as a great military power made it a central player in the negotiations about containing instability in the east and brought France and Germany into a closer alignment. A second challenge to the German dominance in Europe came through changes in the institutional structure of the European Union. In May 2014, elections to the European Parliament were intended to give a new democratic legitimacy to the Commission, as each of the European “families” of parties nominated a leading figure as their candidate for Commission president (this figure was then termed, in German terminology, the Spitzenkandidat).