How German Unification Mistakes Damage West European Economies.
Abstract
The Exchange Rate Mechanism (ERM) that links most of the currencies in the European Community (EC) has just exploded. The shock waves of this event will be felt far beyond the arcane field of international economics. The overly optimistic perception of developments in Western Europe depended heavily upon the successful economic and political incorporation of eastern Germany into a prosperous, united Germany. In this study, the author argues that the Germans have badly mismanaged unification, thereby challenging the earlier optimistic assumptions. The German Bundesbank has responded to the Kohl government's lax fiscal policy with an excessively tight monetary policy which has retarded European economic growth and triggered financial chaos in September 1992 and again in July/August 1993, thereby undermining political unity in the EC
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 04, 1993
- Accession Number
- ADA269228
Entities
People
- Leif R. Rosenberger
Organizations
- United States Army War College