Manufacturing Austerity in the Eurozone

Abstract

Economic forces representing Anglo-America and Germany-Europa find themselves at loggerheads about how to keep European economies afloat. Neoliberal commentators are demanding the European Central Bank (ECB) actively intervene to stave off recession through Eurobond issues and quantitative easing measures. But, after 1945, the allies enshrined a separation of powers between the banks and the German state in order to prevent the return of the ‘creative economics’ of the Weimar era: The German constitution demands political leaders govern collectively, sharing responsibilities – often in coalitions – rather than allowing the Chancellor to dominate.

The Bundesbank considers itself constitutionally bound to prevent the ECB gaining too much power through intervention in the Eurozone financial crisis, a scheme denounced by Jens Weidemann, head of the Bundesbank, as very dangerous: ‘since it would give politicians access to the ECB’s currency printing press– normally only allowed to central bankers’ (Spiegel 2011). The Central Bank’s caution is a product of the cataclysmic consequences of 1920s Germany where the entire society was wracked by massive economic insecurity, as the rulers of Europe demanded reparations, which the economy could not deliver. In some ways the anomie that Weimar experienced mirrors the dilemma of today’s so-called ‘peripheral’ European nations; who face similarly unrealistic strains imposed upon their living conditions as a result of the negative views about their economies held by international financial markets.