Germanizing Europe? the Evolution of the European Stability and Growth Pact

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Germanizing Europe? the Evolution of the European Stability and Growth Pact A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Hoekstra, Ruth; Horstmann, Cécile; Knabl, Juliane; Kruse, Derek; Wiedemann, Sarah Working Paper Germanizing Europe? The evolution of the European Stability and Growth Pact Arbeitspapiere für Staatswissenschaft, No. 24 Provided in Cooperation with: University of Hamburg, Department of Socioeconomics Suggested Citation: Hoekstra, Ruth; Horstmann, Cécile; Knabl, Juliane; Kruse, Derek; Wiedemann, Sarah (2007) : Germanizing Europe? The evolution of the European Stability and Growth Pact, Arbeitspapiere für Staatswissenschaft, No. 24, Universität Hamburg, Department Wirtschaft und Politik, Hamburg This Version is available at: http://hdl.handle.net/10419/41344 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu ARBEITSPAPIERE FÜR STAATSWISSENSCHAFTEN – WWOORRKKIINNGG PPAAPPEERRSS OONN EECCOONNOOMMIICC GGOOVVEERRNNAANNCCEE The Evolution of the European Stability and Growth and Growth Stability European ofthe Evolution The Ruth Hoekstra, Cécile Horstmann, Cécile Ruth Juliane Hoekstra, Der Knabl, Wirtschaftund Politik Department Germanizing Europe? Germanizing Sarah Wiedemann Sarah ISSN: 1613-7000 1613-7000 ISSN: May 2007 May No24 by ek ek Kruse, Pact Die Arbeitspapiere für STAATSWISSENSCHAFT / Working Papers on ECONOMIC GOVERNANCE werden in unregelmäßiger Folge von der Professur Wirtschaftspolitik/ Economic Governance am Department Wirtschaft und Politik der UNIVERSITÄT HAMBURG ausschließlich in elektronischer Form herausgegeben: Prof. Dr. Arne Heise Universität Hamburg Fakultät Wirtschafts- und Sozialwissenschaften Department Wirtschaft und Politik Von-Melle-Park 9 D-20146 Hamburg Tel.: -49 40 42838 2209 e-mail: [email protected] Das Verzeichnis aller Arbeitspapiere und anderer Veröffentlichungen/ List of all working papers and other publications: www.hwp-hamburg.de/fach/fg_vwl/DozentInnen/heise/Materials/heise-downlds.htm Zitierweise: Autor (Jahr), Titel, Arbeitspapiere für Staatswissenschaften Nr. X, Department für Wirtschaft und Politik der Universität Hamburg Citation: Author (Year), Title, Working Papers on Economic Governance No. X, Department of Economic s and Political Science at Hamburg University Acknowledgement This paper is the revised version of a Student research paper presented in the Euromaster course ‘International Political Economy’ at Hamburg University, Wintersemester 2006/2007. 1 Contents 1 Introduction.................................................................................................... 4 1.1 Theoretical approach – Agenda Theory ........................................................ 5 1.2 Outline........................................................................................................... 7 2 Initial status in Germany................................................................................ 8 2.1 Germany’s role and position in the negotiations ........................................... 8 2.2 German unification...................................................................................... 10 3 Main actors.................................................................................................. 11 3.1 Bundesbank (German Federal Bank)........................................................... 12 3.1.1 German ordoliberalism and the Bundesbank ............................................... 12 3.1.2 First moves towards a Stability Pact............................................................ 13 3.1.3 The Bundesbank – an exterior view............................................................. 15 3.1.4 Conclusion................................................................................................... 16 3.2 German government and political parties.................................................... 17 3.2.1 Implementation of the Stability Culture in EU Politics – From Genscher to Waigel.......................................................................................................... 18 3.2.2 Opposition - Social Democrats and Greens................................................. 18 3.2.2.1 Constitutional renewals - a threat? .............................................................. 19 3.2.2.2 1995-1996: turning of the SPD towards the anti-EMU platform? .............. 19 3.2.3 The government - Theo Waigel under pressure .......................................... 21 3.2.3.1 Internal party skepticism: Edmund Stoiber and the CSU ........................... 22 3.2.3.2 EMU as a German responsibility: Helmut Kohl and the CDU................... 22 3.2.3.3 The Federal Ministry of Finance - birthplace of the SGP ........................... 24 3.2.4 Conclusion................................................................................................... 24 3.3 Academics.................................................................................................... 25 3.3.1 The German Council of Economic Advisors............................................... 27 3.3.2 Pro and contra Stability and Growth Pact.................................................... 28 3.3.3 Manifesto of 60 economists against EMU and the response of chief economists................................................................................................... 29 3.3.4 Conclusion................................................................................................... 29 3.4 German trade unions and employer associations......................................... 32 3.4.1 Trade unions ................................................................................................ 32 3.4.2 Employer associations and business interest groups ................................... 34 3.4.3 Conclusion................................................................................................... 34 4 Public opinion.............................................................................................. 35 4.1 The rise of Euroskepticism.......................................................................... 36 4.2 Waigel’s response........................................................................................ 38 4.3 Conclusion................................................................................................... 38 5 Media........................................................................................................... 39 5.1 Media democracy......................................................................................... 39 5.2 SGP negotiation........................................................................................... 40 5.2.1 Coverage during the SGP negotiations........................................................ 40 5.2.2 Public opinion during SGP negotiations...................................................... 42 5.3 Media and Agenda Theory.......................................................................... 43 5.3.1 Approach to the theory ................................................................................ 43 5.3.2 Agenda-Setting............................................................................................ 44 2 5.3.3 Policy agenda setting................................................................................... 45 5.3.4 Agenda building........................................................................................... 46 5.4 Conclusion................................................................................................... 46 6 Conclusion................................................................................................... 48 Bibliography ..................................................................................................................... 51 3 1 Introduction In 1992, the Member States of the European Community signed the Treaty on European Union in Maastricht, one of the most remarkable political achievements of the twentieth century. However, the boldness of the Treaty was apparently more than large segments of the European public were ready for. The replacement of national currencies by the euro and the ensuing permanent interlocking of the Member States’ national economies were particularly unsettling developments for many Europeans. One political response to this skepticism regarding the economic future of the European Union was the creation of the Stability and Growth Pact (SGP) in 1997. With the introduction of the common euro currency,
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