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Europe's Economic and Monetary Union was presented in terms of an idealized, teleological narrative of 'ever closer union' that obscured substantive conflicts within and among the member states of the eurozone as well as the EU as a whole. Despite its limitations the narrative persisted, because it was instrumentalized by powerful social forces and states and reproduced by the mainstream European studies academic cohort, which was strongly influenced by the European Commission. At the present time economic stagnation is giving rise to demands from Keynesian and heterodox quarters for an alternative to neoliberal austerity. However, the resilience of austerity should be understood not primarily as a result of a dominant, if flawed, intellectual discourse, but rather as an expression of Europe's distinctive power relations and the imperatives of German export mercantilism.

Far from enabling France to enhance its power over European monetary policy, the Euro has served to consolidate the Federal Republic of Germany’s primacy in Europe. We argue that German policies that have underwritten this primacy are determined not primarily by the ordoliberal ideas of German state managers, but rather because these ideas correspond to the requirements of Germany’s neo-mercantilist export model and the interests of its most powerful socio-economic actors. Germany’s material/corporate interests—and its particular domestic and regional predicament—create enormous obstacles to the abandonment of ordoliberalism and the adoption of the more expansive fiscal policies that most observers believe are necessary to sustain the Eurozone.