The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Tedeschi? No grazie!

Monetary union without Germany, or more precisely without the Bundesbank: that's the prescription of Nobel laureate Franco Modigliani. The Bundesbank has already become the central bank of Europe, Modigliani argues, with its "miserable monetary policy" of high real interests in the face of low investment and rising unemployment. He would like to index central bankers' salaries to inflation and joblessness figures.

Modigliani, born in Rome in 1918, an MIT professor and winner of the Nobel prize for economics in 1985, hopes Emu will mean a new central bank "whose interests will presumably be those of Europe, not Germany. Then we will be rid of the Bundesbank as the dictator of European monetary policy".

The interest of the Bundesbank, he told Business Club Italia in London last month, is to postpone Emu as long as possible, to prolong its own survival, whereas chancellor Kohl would genuinely like to integrate.

The Bundesbankers must be "very disappointed by the Italian government, since it has proved not to be a bunch of buffoons", he continued. A monetary union without Germany isn't unthinkable, he says. Europe without Germany is two-and-a-half times Germany's size. If Bundesbankers insist on sticking to the letter of the Maastricht criteria, "why not say join without them?"

The Germans would soon realize that, surrounded by a weak euro, their exports would plummet and unemployment would rise even higher.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree