It has often been argued that European monetary unifi cation must basically be seen as a device to Europeanise re-unifi ed Germany. For the Germans it seemed to be the best possible way to prevent a German “Sonderweg” and end any German ambition for hegemony. For the rest of Europe, and particularly France, it seemed to be the best way to curb German monetary dominance and to secure a French imprint on EU policymaking. In this article, however, it is argued that the German impact on the economic governance regime of EMU and its fencing off the French proposal of a “gouvernement economique” is so substantial that the term “Germanic Europe” seems in fact to be appropriate. More importantly, the economic governance system of “Germanic Europe” has locked the European Union into a politics of disinfl ation which makes it difficult for the EU to prosper and reap the potential fruits of European integration.
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