ABSTRACT
European unification has always been a pre-eminent goal of German policy. The country has assumed a pivotal role in promoting the deepening of monetary integration in the European Union (EU). Germany, in close cooperation with France, initiated the European Monetary System (EMS) in 1979, and Economic and Monetary Union (EMU) in 1988. Both projects became feasible due to a convergence of policies among EU members. Germany has both contributed to and benefited from these developments. Given this basically positive premise, German monetary policy will be analysed on the basis of the following three questions. First, what is the relationship between autonomy and sovereignty in domestic monetary policy and to what extent can these be preserved in the face of growing regional economic interdependence? Second, how did EMS membership interfere with autonomy in setting domestic monetary policy and how did German policy respond to this problem? Third, given that all member states have to surrender sovereignty in EMU, how is this issue being dealt with by Germany?
