The EMS and the Bundesbank in Europe

This essay deals with the financial position of Germany in Europe and the role of Europe in Germany’s economic strategy. The central argument of the paper is that the German orientation is structurally, institutionally, as well as philosophically, anti-Keynesian orientated, so that the Federal Republic1 has become the source of strong deflationary impulses for Europe as a whole. Germany conquered the role of being Europe’s deflationary factor in the course of a long historical process from which Bonn emerged not just as the largest economy of the continent but also as the political hegemon. Except in the 1990s, German hegemony has been explicitly used to strengthen the economic position of German capital in Europe.