Culture Matters: French-German Conflicts on European Central Bank Independence and Crisis Resolution

The European sovereign debt crisis has brought to the fore a fault line between German and French politicians and board members of the ECB. In this paper we argue that these differences are rooted in cultural differences between Germany and France. This position is based on previous research on the relation between central bank independence and national culture and the construction of cognitive maps of a French (Jean-Claude Trichet) and German (Axel Weber) member of the ECB’s board. Consequently, although a European wide agreement on the ECB’s independence has been reached, national cultural differences still play an important role in the Board members’ preferences and the ECB’s policy. As such, this paper illustrates one of the central tenets of this volume that the Cultural Turn in economics has a distinct value for understanding financial affairs. Moreover, it introduces a new methodological approach to operationalise dimensions of culture in the process