3 - Adenauer’s Challenge: The ‘Gürzenich Affair’ and the Bank deutscher Länder, 1956–1957

Summary

This chapter examines the final years of the Bundesbank Law debate. It devotes particular attention to a 1956 public attack launched by the chancellor, Adenauer, on the central bank. The chapter argues that the crucial consequence of the ‘Gürzenich affair’ was the narrowing of the parameters of monetary debate through which West Germans interpreted the inter-war era. It argues that the provisions outlined in the Bundesbank Law reconfirmed an institutional conflict between Bonn and Frankfurt, one that was originally left behind by the Allied authorities. In providing no formal process through which conflicts between the federal government and the central bank could be solved quietly, the Bundesbank Law increased the likelihood that such disagreements would become ‘dramatised’ and spill into the public sphere. These disagreements gave rise to public controversies surrounding central bank independence, and in turn, provided further instances in which inflation narratives could be geared in support of the Bundesbank. It explains West Germany’s cultural preoccupation with inflation in institutional terms.