Abstract
One of the most influential yet also most controversial policies of European integration has been the introduction and governance of the European Monetary Union. This chapter analyses which Franco-German diffusion processes have facilitated the adoption of the Euro and, above all, of German-style ordoliberalism as basic policy framework for European currency governance. While some scholars see the contemporary dominance of this model mainly as a result of German economic strength in the 2000s and 2010s, it is argued that its emergence must be traced back to diffusion process starting as early as in the 1970s. At that time, the oil crisis and the end of the Bretton Woods systems put heavy constraints on expansive Keynesian fiscal policies, including those practiced by French governments. Within the framework of bilateral as well as European government co-operation, French policymakers started to ‘learn’ about the comparative advantages of German ordoliberalism. After 1976, President Giscard d’Estaing implemented restrictive fiscal and monetary policies and launched the initiative for the European Monetary System, together with German Chancellor Schmidt. The durable socialization of French monetary and fiscal elites in ordoliberal ideas can be illustrated in their eventually successful attempts to reverse President Mitterrand’s activist economic policy, resulting in a durable adherence to ordoliberal norms after 1983.
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Sangar, E. (2020). Understanding the Diffusion of West German Ordoliberal Ideas Within the Context of the Introduction of the European Monetary System. In: Diffusion in Franco-German Relations. Studies in Diplomacy and International Relations. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-36040-5_10
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