Healing the rift in Europe’s single currency
The central bank is one of Germany’s most trusted institutions
FEW POST-WAR economic institutions have been as successful as the Bundesbank. Its tough stance on inflation in the 1970s ensured that, while the world battled double-digit price rises, those in Germany were relatively contained. Its credibility with the public and markets was so strong that other countries were keen to harness its might, leading to the creation of the single currency in 1999. Jacques Delors, a European politician, once joked not all Germans believe in God, but they all believe in the Bundesbank. Others in Europe were ready converts, ceding monetary sovereignty to the European Central Bank (ECB), which is based in Frankfurt, and was at first heavily influenced by German economic doctrine.
This article appeared in the Leaders section of the print edition under the headline “Couples therapy”
From the February 22nd 2020 edition
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