Of Rules and Mavericks: Germany and the Eurozone Crisis

The Eurozone crisis caused havoc among European countries and setbacks in the process of European integration. Some countries in the Eurozone tried to curb austerity and impose democratic decisions against economic demands, while others complied with difficult structural reforms to shape the economy in the medium-long term. However, the 'troika' -formed by the European Central Bank, the European Commission and the International Monetary Fund- that observed and monitored the countries severely hit by the crisis could not impede the perception that Germany was the most important player to manage the situation.

The crisis exposed the asymmetries that existed inside the Eurozone. The Franco-German relationship that was the core of European integration gave place to a German leadership that should secure the stability of the Euro. This article discusses the tension between Germany and the European countries that were deeply affected by the crisis. The ideas of ordoliberalism influences Germany to see politics of debt as a moral hazard and enforce structural reforms that stimulate surpluses and inhibit deficit. However, even Germany was forced to break the rules before. The hypothesis highlights that ordoliberal ideias influenced German pragmatism to secure the stability of the Euro and eliminate the risk of contagion by members dwelled in financial instability.

The article concludes by outlining that although Germany's economy has successive trade surplus and strong competitiveness, its past behavior and external constraints inside the Eurozone induces Germany to cooperate with countries hit by the crisis to avoid the degeneration of the European Monetary Union.