my definition of a clear hegemon is : it should have the right to set the rules and to force others to behave accordingly, the right to enforce the rules. and it has to have the right even to breach the rules itself and still not allow the others to breach the very same rules. but this is not true for germany after the introduction of the euro. to put it simply, eurozone membership turned germany from a hegemon into just one important player in rule making and practical policy making. if i use a simple analogy from the world of motoring, in the german mark era germany controlled the steering wheel, pedals and gearstick of the monetary vehicle, whereas in the euro era – and especially since the crisis broke out – it has had a firm foot only on the brake. and only sometimes, one must add. why is that? well, in a euro - style monetary union, many important issues are put to a vote ( or complicated negotiations ), and votes and negotiations typically have different outcomes than dictates or decisions of a hegemon. if there had ever been a notion that the euro could be as depoliticised as the former mark, it simply had to fail. in reality it had to be more politicised by definition. the euro could not be a depoliticised german mark, because in many key decisions and respects it had to be a rather more politicised french franc, italian bis central bankers ’ speeches lira or spanish peseta. otherwise, it seems to me, it could not have come into being in the existing set - up in the first place. a bitter remark : allan meltzer once said the ecb ’ s biggest advantage over the us federal reserve system is that it doesn ’ t have a government standing against it. this, he believes, is the best safeguard of the ecb ’ s independence. but the opposite and rather bitter argument can also be made. the ecb at times has to stand against all 17 governments of the eurozone member states. i do not want to talk about nominal and real convergence, about rigidities, oca arguments etc. rather, let ’ s take one example. many complain that it is so hard to make real macroeconomic adjustments within the current eurozone, among its individual states. but if i understand monetary history correctly, the eurozone was created partly to make standard adjustments more complicated. the fear of constant “ humiliating devaluations ”

out of your window as you take off from prague airport on your way home. so this is about lifestyle : good beer, heavy food and bathing. actually, many czechs would say that this is the very definition of how to relax and be cool about the world and life. but this would also be a rather simplistic caricature. so let ’ s go further. ours is a country with a long and entrenched tradition of industrial production and manufacturing. this goes back to the 19th century, to the time of the austro - hungarian monarchy, when this part of the empire used to be its industrial undisputed powerhouse. this tradition has survived through wars and totalitarian regimes to the present day. even now, the czech republic is the country with the highest ratio of industrial production to gdp in the whole of the eu and the ratio is higher than in germany, a fact which many do not know. and it has actually been rising rather than falling over the last 10 years or so. this is manifested in the fact that the czech republic is the second biggest producer of cars per head in the world. moreover, the czech republic and slovakia – which formed a single state until 1993 – are together by far the biggest car - producing countries in the world in per capita terms. with 150 cars produced per every 1, 000 citizens these two countries are well ahead of south korea and germany combined in per head metrics. so whenever you drive your skoda, hyundai, peugeot, kia, volkswagen or even porsche, don ’ t be surprised to learn that they were actually manufactured within a radius of 300 kilometres of prague. by the way, ferdinand porsche, the 1 / 2 bis central bankers'speeches founder of the porsche car manufacturer, was also born here, 100 kilometres north of prague. many of my friends in the real economy say that the czech republic is a country where everything is produced, from wings for airbus and embraer aircraft ( we are also the biggest producer of ultralight planes in the world, for instance ), through turbines, cars, buses, locomotives and guns to bearings, brushes and semtex. whatever you need to produce you will always find at least one factory capable of making it, the anecdotic evidence seems to be suggesting. as exports obviously feed this country, and as we are so close to germany and the germanspeaking world, you won ’ t be surprised to learn that germany is by far our biggest trading partner, with more