The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Germany in the Euro Area Crisis

  • Daniela Schwarzer
Reference work entry


This article examines Germany’s move to centre stage in the management of the sovereign debt crisis that has ravaged the euro area since the beginning of 2010. The German government has been influential in deciding the pace and design of rescue packages, and also in the ongoing reform of governance in the euro area. Germany’s dominance can be explained by its large contribution to the rescue packages, by its relative economic strength and by the role of potential veto players such as the German Parliament and the German Constitutional Court. Germany’s positions on crisis management and on governance reform reflect its approach during the Maastricht negotiations: to minimise risk-sharing and joint liabilities so as to avoid moral hazard, to increase control and the credibility of rule-based coordination, to enable European control of national policies, and to strengthen the market mechanism to discipline national policy choices.


Angela Merkel Bundestag Deutsche Bundesbank Economic governance EU governance Euro Euro area Euro zone Germany Sovereign debt crisis 

JEL Classification

E6 E42 F15 F33 F36 H3 H6 O3 O31 O320 O380 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Daniela Schwarzer
    • 1
  1. 1.