Book contents
- Trading Power
- Trading Power
- Copyright page
- Contents
- Figures
- Acknowledgments
- Abbreviations
- Introduction
- 1 The Unraveling of Adenauer’s Grand Strategy (1962–1963)
- 2 America’s Junior Partner (1963–1964)
- 3 Twenty Years After (1964–1965)
- 4 The Stability Imperative (1965–1966)
- 5 Gaullist Temptations (1966–1968)
- 6 The Magnetism of Prosperity (1967–1968)
- 7 A Decisive Election (1969)
- 8 The Zenith of Ostpolitik (1970)
- 9 The European Pendulum (1970–1972)
- 10 Hazards from the Global South (1970–1972)
- 11 The Embattled Chancellor (1971–1972)
- 12 The Center of Europe (1973)
- 13 The Crisis Management Team (1973–1974)
- 14 New Structures for the West (1974–1975)
- Conclusion
- Select Bibliography
- Index
4 - The Stability Imperative (1965–1966)
Published online by Cambridge University Press: 14 October 2022
- Trading Power
- Trading Power
- Copyright page
- Contents
- Figures
- Acknowledgments
- Abbreviations
- Introduction
- 1 The Unraveling of Adenauer’s Grand Strategy (1962–1963)
- 2 America’s Junior Partner (1963–1964)
- 3 Twenty Years After (1964–1965)
- 4 The Stability Imperative (1965–1966)
- 5 Gaullist Temptations (1966–1968)
- 6 The Magnetism of Prosperity (1967–1968)
- 7 A Decisive Election (1969)
- 8 The Zenith of Ostpolitik (1970)
- 9 The European Pendulum (1970–1972)
- 10 Hazards from the Global South (1970–1972)
- 11 The Embattled Chancellor (1971–1972)
- 12 The Center of Europe (1973)
- 13 The Crisis Management Team (1973–1974)
- 14 New Structures for the West (1974–1975)
- Conclusion
- Select Bibliography
- Index
Summary
If West Germany had one unique asset, it was the bedrock stability of its currency, the Deutsche Mark. Chapter 4 introduces the principal defenders of German stability – the economy and finance ministries, the Bundesbank, and the Council of Economic Experts. In fall 1965, Chancellor Erhard identified the maintenance of price stability as the foundation of German policy – with enormous repercussions for foreign relations. In 1965-66, development aid programs, restitution to Israel, and offset purchases from the United States would all be scaled back in order to keep Bonn’s budget balanced and avoid stimulating inflation. German monetary experts worked closely with U.S. officials to uphold the Bretton Woods monetary system; but Lyndon Johnson was furious that Erhard had broken his offset pledges, particularly since West Germany remained reluctant to send personnel to Vietnam. In spring 1966, Erhard’s cabinet tried to unthaw relations with the USSR by issuing a “peace note” calling for mutual renunciation-of-force declarations; but the Soviet bloc rejected the approach as inadequate. When West Germany slipped into recession, Erhard’s coalition collapsed in failure.
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- Trading PowerWest Germany's Rise to Global Influence, 1963–1975, pp. 98 - 130Publisher: Cambridge University PressPrint publication year: 2022