POLI%20243%20notes%20March%2026

POLI%20243%20notes%20March%2026 - POLI 243 *Why did Germany...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
March 26, 2009 POLI 243 Germany’s Role in European Monetary Union Reluctant Leadership within Europe *Why did Germany take on the leadership role? Issues for Germany Concerning Monetary Union - Costs of adjustment related to process o There are costs related to everyone moving towards monetary union – everyone will have to agree on what balance of Mundell-Fleming conditions to have 1) Do you build institutions first, then have them help members attain compliance with rules? 2) Or should states prove they can comply with the rules, and only then be allowed to enter? (have to live up to a certain standard before they’re let in) - Germany’s Preferences: o Unanimous votes Voting on new members joining by member countries – basically they want veto power everyone else was arguing for majority-wins style voting; Germany is worried that this will let in too many smaller, less reliable countries, which will then vote to allow in others, and so on o Institutions to discipline Must have a system to force countries to follow the monetary regime (i.e. must be able to punish countries that run large deficits, have the ability to kick people out, etc.) o However, Germany was willing to make side payments In order to get others to agree to their other preferences, they would make side offers (like funding for side projects, etc.) Explaining Germany’s Role - At the time, it looked like Germany had a lot to lose, and little to gain from a monetary policy like this; their currency was well established, had low historical inflation based on good rep of central bank, trade position was well supported, etc.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern