The Bureaucratic Politics of Germany’s First Greek Bailout Package

Abstract

The bureaucratic politics of the German decision to bailout Greece reveal that policy proposals from the Office of the Federal Chancellery and the Federal Ministry of Finance to cope with the crisis in Greece stood to benefit those specific ministries. Centered on a national/supranational cleavage, policy debates in the second Angela Merkel government revolved around whether the European Union should be delegated more power in terms of broader Eurozone macroeconomic governance. Angela Merkel rejected broader treaty revisions insisting on strict adherence to the Stability and Growth Pact and the large-scale participation of the IMF. Conversely, Federal Finance Minister Wolfgang Schäuble opposed IMF involvement and advocated for increased EU competency including support for the French proposal to institutionalize the Eurogroup. The policy positions of these two organizational actors remained deeply conditioned by organizational interests, rather than partisan or ideological divides over conceptions of “European Unity.”