The shapeshifting hegemon: Germany and EMU dynamics

This thesis addresses the controversy currently at the heart of debates over the future of the Eurozone, between those who argue Germany is insufficiently hegemonic, versus those who believe it is excessively so. To make sense of this, we begin with a conceptual analysis, highlighting the different versions of the term and subsequently classifying them as either problem-solving or critical theories of hegemony (based on Cox, 1981). Problem-solving theories are ahistorical, concerned with how hegemony functions to preserve an existing world order (with hegemony defined through imageries of stability based exclusively on the case of the US at a fixed point in time). By contrast, critical theories examine the nature of hegemony in historical perspective, questioning the existing world order and highlighting its inequalities. The theoretical contribution of this thesis is that we use the critical versus problem-solving distinction to explain the aforementioned controversy in the applied literature on German hegemony. On the other hand, we show also that the fixity bias – the tendency to treat states as unitary (homogeneous) and unchanging – typical of problem-solving theories has nevertheless permeated more critical literature as well. Our empirical contribution is that we overcome this limitation by analysing the nature of German hegemony in the EMU in a way that is sensitive to change and heterogeneity. We focus on change by examining Germany-EMU interactions as a two-way relationship, with Germany both shaping, and being shaped by, monetary integration. We emphasise heterogeneity by questioning whose interests are being served by the present configuration of the Eurozone. We conclude that Germany as a hegemon is not homogeneous but serves the interests of German industrial capitalists and European financial capitalists, which makes its hegemony more diffuse, and simultaneously, more entrenched. Change at the domestic and supranational level has made Germany a shapeshifting hegemon, characterised by an elusiveness that likely strengthens Germany’s position for the time being, by obscuring the source of German power. These conclusions are drawn via a research strategy that has not been used before in analyses of German hegemony: a case study approach which included collection of new primary data (interviews with German elites). This thesis thereby also makes a methodological contribution.