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.

World War II memories constitute the backdrop of Chapter 3. The Auschwitz Trials presented a daily reminder of German crimes; and a stretch of 20-year anniversaries from D-Day to V-E Day provided numerous occasions to invoke the “politics of the past” in putting pressure on Erhard’s Germany. The USSR, Britain, and France all aimed to forestall the MLF project, blocking West German access to nuclear weapons. France also won significant concessions on EEC agricultural policy from Bonn, thanks to de Gaulle’s ability to mobilize “Gaullists” in the CDU/CSU against the chancellor. In the face of intense Israeli pressure, Erhard’s panicky decisionmaking created a Middle East debacle in spring 1965; Bonn canceled its tank deliveries but established diplomatic ties with Tel Aviv, prompting ten Arab states to break relations. West German leaders felt increasingly isolated. Even U.S. opinion wearied of West German rigidity, particularly when German cabinet ministers seemed to contest the territorial status quo in Poland or Czechoslovakia. Real interest in promoting German unity was waning among all of Bonn’s allies; Bonn was at an impasse.

Chapter 2 outlines Ludwig Erhard’s efforts to position West Germany as a Cold War partner to the United States, as pledged during a visit to Lyndon Johnson’s ranch in December 1963. Defense minister Kai-Uwe von Hassel strongly advocated German participation in a NATO multilateral nuclear force (MLF); and he and Erhard signed off on a $1.35 billion offset agreement calling for massive purchases of U.S. weapons. They also agreed to a secret scheme to funnel surplus U.S.-built M-48 tanks to Israel. The Bundestag refused to sanction German deployments overseas, however – whether peacekeeping in Cyprus or a field hospital to Vietnam. “Gaullists” within Erhard’s CDU/CSU party, notably Franz Josef Strauss, complained about Erhard’s neglect of France, and his decision to placate Johnson by refusing a trade mission to China. Motion toward German unity remained stalled; Erhard’s idea of “buying off” the USSR with massive economic aid went nowhere, as did Gerhard Schröder’s policy of “small steps” toward the East. A holiday pass arrangement allowing visits across the Berlin Wall, arranged by Mayor Willy Brandt, offered the strongest evidence for Germans’ sense of belonging together.