Making Sense of Germany in EMU: The Impact of Ordoliberal Ideas

This paper aims to characterize the role of Germany in the Economic and Monetary Union (EMU). While a lot has been written on German policies in the euro zone crisis, little scholarly literature analyses the underpinnings of German preferences. This paper fills this gap by considering the interests, institutions and ideas which determine the government’s policy in the euro zone crisis. Two case studies on the banking union and the Greek bailout negotiations are conducted in order to analyse the impact of interests, institutions and ideas on German preferences in these negotiations.

It argues that particularly ordoliberal ideas embedded and internalised in the Chancellery, Finance Ministry and the broader political elites do explain German preferences in the euro zone crisis. At the same time, these ideas are unique in Germany and never diffused to other countries; consequently, they explain why in the above-mentioned case studies Germany was left isolated on many contentious issues. While also being the hegemon of EMU, the German government is also some kind of an ‘outlier’ in EMU because of ordoliberal ideas being a crucial impact on the government’s policies.