Advances in Economics, Management and Political Sciences
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Proceedings of the 3rd International Conference on Business and Policy Studies
Series Vol. 68 , 05 January 2024
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Important Drivers of European Monetary Integration ——The Game Between the German Central Government and the Bundesbank as an Example
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Abstract
An independent central bank constitutes a veto actor in the political process itself and has the potential to limit the autonomy of the State (Government). In cases where the preferences of the state and the central bank diverge, the resulting authoritative actions will be influenced by the political structure of the respective country. Where changes in the domestic political system are difficult to achieve, the state can change the existing equilibrium between the central bank and the government by engaging in international regimes and international negotiations and evolving this equilibrium in the direction of greater state autonomy. This paper adopts a case study approach to propose a domestic political logic for international monetary policy choices by analyzing the relationship between international monetary co-operation, central bank independence and national autonomy, and uses the political game between the central central bank and the central government within Germany and the outcome to verify this view, thus providing a political science explanation for the relationship between German monetary politics and European monetary integration. The European Central Bank after the formation of the Union inherited the independence of the German central bank, and while assuming its responsibility for monetary stabilization and economic development, it gradually transcended the scope of its monetary functions and transformed itself from a purely technical institution to an important political player in the regional political and economic arena in the process of the already existing institutional constraints and changes in the economic situation.
Keywords
European Monetary Union, the independence of central bank, state autonomy, Germany
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Data Availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
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- Volume Title
- Proceedings of the 3rd International Conference on Business and Policy Studies
- ISBN (Print)
- 978-1-83558-267-1
- ISBN (Online)
- 978-1-83558-268-8
- Published Date
- 05 January 2024
- Series
- Advances in Economics, Management and Political Sciences
- ISSN (Print)
- 2754-1169
- ISSN (Online)
- 2754-1177
- DOI
- 10.54254/2754-1169/68/20241337
- Copyright
- 05 January 2024
- Open Access
- This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited