Paper Titles & Abstracts

The paper provides an explanation for Germany's strict adherence to austerity measures to resolve the sovereign debt crisis against strong opposition from many European governments and large demonstrations from those affected in indebted countries. In contrast to existing explanations (fear of Weimar inflation, coordinated market economy, asymmetric power relations between creditor and debtor nations), the article argues that the German orthodox belief in a rule-based legalistic ordoliberal doctrine is an important veto player and agenda setter to prevent alternative ideas (such as Keynesian) from challenging the austerity discourse. This will be demonstrated by analyzing the German Economist Streit (Clash) between ordoliberal economists (such as Hans-Werner Sinn and 200 supporters) and Keynesian economists which was played out in newspapers in July 2012 in response to the introduction of a "banking union" across the Eurozone. Ordoliberals reject government intervention to shore up indebted countries, since this would violate the mandate of the ECB to ensure price stability. In the present Euro crisis resolution scenario, the influence of ordoliberalism is most evident in the German position on price stability and the austerity policies. Ordoliberals hold the trump of veto power against Keynesians who try to change the status quo and demand "more Europe". The question is however, at what social and political costs?