Frankfurt: European Central Bank

This series of posts describes a study abroad course in which students visited several central banks and talked with central bankers about how they responded to—and sometimes failed to respond to—the global financial crisis, and how they are adjusting to their new roles.

by Sarah Sykstus

It seemed as though the trips to both the Federal Reserve and the Bundesbank were just pit stops on the way to the ultimate destination that we were all looking forward to visit: the European Central Bank (ECB). Just the day before, we had visited Germany’s National Bank, the Bundesbank. It was the first time we had been able to receive a perspective completely different to what we were used to. It provided us with information regarding solely Germany’s economy, however, it gave us a necessary foundation for the trip to the ECB.

At 9 am we set foot in route to the ECB. We took the subway just like we taken the previous day. On the way to the subway, we passed by the old ECB, marked by the large euro mark with gold stars surrounded by it. I would like to think it was a sign that the day would be successful. The new ECB building was visible the moment we started to climb the stairs up from the subway. It was very sleek and modern on the outside, as it was all glass that shined bright in the morning sun. The moment we walked into the building we were all in awe. It was even more beautiful on the inside. Thus, it was necessary to stop and take pictures of the ground level floor. We even had to stop and take a group picture in front of the main display: all of the flags of the European Union (EU) surrounding a wall that has the words “European Central Bank” written in all of the languages specific to the nations representing the EU.

After all of the pictures were taken we were lead further into the beautiful building, past water features and into the glass elevators. One of the students in the group, Tulsi Joshi, told us that when we were in the elevator it felt like we were in the elevators of the ministry of magic, a ficticous place in the Harry Potter Series. Once we got off we were lead to a conference room where we had the pleasure of listening to two very respected economists that work for the ECB, Dr. Demosthenes Ioannou and Dr. Florian Helder. Dr. Ioannou and Dr. Helder first gave us background information regarding the basics of the Euro Area (the group of countries that use the euro currency). Then they proceeded to provide us with how the Euro Area looked before the crisis which transitioned to the crisis and the reasons they believed it happened. Dr. Helder stated that the crisis can be summed up in the following ratio: debt/GDP (the debt is individual debt by each person).

After they provided us with background information and have caught us up through the crisis, they talked to us about the measures that the ECB is taking in helping the European Economy. It was very interesting to listen to this because it proved to be different from the duties of the Federal Reserve. The ECB is still very young and does not have as much power because they are dealing with fully developed countries that each have their own policies in place while the Federal Reserve is on the federal level and thus can overrule state law.

The presentation was followed by a tour around the building. It was definitely one of the highlights of the trip thus far. The architecture is absolutely beautiful and can be described as both modern and early 20th century because it was integrated, quite perfectly I may add, to a historic landmark that has been around since the 1920’s. We were also lucky enough to have access to one of the top floors to look at a magical view over the city of Frankfurt. The final stop included a quick lunch and the chance to sit in their cafeteria with the other employees before we had left. Unfortunately, the time to leave the ECB came too quickly. I will forever be grateful that we had the chance to not only see the state of the art building but, to meet two of the most influential economic researchers in the world ; it was definitely a memorable day that I wish I could go back to!

Frankfurt: European Central Bank

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Frankfurt: Deutsche Bundesbank

This series of posts describes a study abroad course in which students visited several central banks and talked with central bankers about how they responded to—and sometimes failed to respond to—the global financial crisis, and how they are adjusting to their new roles.

by Viola

The Deutsche Bundesbank is the central bank of the Federal Republic of Germany and since 1999 it has been part of the Eurosystem—the central banking system of the Euro area— sharing responsibility with the other original central banks and the European Central Bank (ECB) for the single common currency. The Bundesbank is independent of instruction from the Federal government. The Bundesbank uses this nationwide network to perform its operation in the area of refinancing, clash supply and banking supervision. Let me explicate. Banking supervision in Bundesbank, mainly monitoring and examining the health of banks to ensure that banking system is efficacious and stable. For Bundesbank, banking supervision does not straightly interfere in transaction conducted by banks, but entrench regulatory groundwork. In other words, banking supervision improves the quality of banking.

During our trip to Bundesbank’s central office in Frankfurt am Main, we know that the overall overriding aim behind all of the Bundesbank’s activities is to safeguard the stability of the general price level and the financial system. The Bundesbank’s stability policy also relies on the support of economic, wage and fiscal policies. In correlate with inflation as support to economy, a too continued period of low inflation rates will bring forth alternative instrument. The decline of the inflation rate is chiefly result of falling energy cost and commodity prices. In addition, Bundesbank expects the Eurozone economy to pick up, added that the bank also needed to contemplate the tractable mandate thus leading to an increase in inflation.

The recent financial chaos and its severe economic consequences founded a major challenge for central banks and banking supervisors around the world. As the publics believe, there are a very large number of opinions from which it is possible to go through such a complex phenomenon as the sovereign debt crisis. In our meeting with one of Bundesbank ‘s research group researcher Michael Scharnagl, his allusion against ECB’s potentially unlimited program to buy the government bonds of euro zone sovereigns is expansionary because such measures pay attention on the symptoms and don't cure the roots of the crisis. Moreover, in concern with economy’s growth, the bank’s priority, he pointed, is to create the necessary institutional framework and incentives through improvement of authority structures in some crisis countries, e.g. structures of banks’ activities, of employment in financial sector and of distinguishing credits between corporate and household. If banks were to fail, they would usually only insure the deposits and not the banks themselves.

Frankfurt: Deutsche Bundesbank

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International Business Immersion Program Concludes

IBIP, a program co-sponsored by the European Union Center including participation by EUC Director Bryan Endres, concluded its 2011 trip in October. Read the brief news article about the program below or on the Office of International Programs Monthly Newsletter.

The 2011 International Business Immersion Program (IBIP) concluded on October 6, 2011, as the 24 participants, divided into six groups, premiered their final video projects about their research findings on the European food and agribusiness industry. Since 2001, the IBIP experience has allowed students to gain an international perspective and network to build on for future study abroad experiences, internships, and careers. This year's theme was "Firm, Channel, and Industry Dynamics within the European Agri-Food Sector" and featured a visit to Belgium, the Netherlands and Germany. The topics of this year's final video projects included sustainable cocoa, free range chicken, canola oil, and a comparison of the European and U.S. recycling industries.

Reflecting on the experience, participant Elizabeth Steger, a Finance in Agribusiness major in ACES set to graduate in spring 2012, says, “After participating in this trip I am very interested in having the opportunity to visit other countries for work, or even live abroad for a period of time for a career. I think this trip gives us a great advantage due to the knowledge and experience we have gained academically, personally, and professionally.” For more information on IBIP, visit the program's website.

International Business Immersion Program Concludes

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Celebrating Oktoberfest: Across the Cornfields Edition

by Reneé Gordon Holley

Every September, millions of people flock to Munich, Germany, eager to take part in the annual Oktoberfest celebration. Tourists and locals alike overrun the city, spending hours in festival tents, sipping fine brews specially formulated for the occasion, and consuming innumerable pretzels and pork shanks. Among the smells of people, beer, meat and sweets, listeners are treated to traditional folk bands, which blast Bavarian classics and entice children to dance.

For those unfortunate souls who are unable to make the yearly pilgrimage to Bavaria (myself included), you may be able to catch a local party. Communities scattered throughout the United States put on their own, home-grown versions of the “Fest,” complete with Dirndl, Lederhosen, and traditional Bavarian decor.

In Central Illinois, residents have the option of making a culinary pilgrimage to experience the closest thing to German Gemütlichkeit on this side of the Atlantic. Travelers heading north on Illinois 47 encounter corn, soybeans, and the occasional pumpkin patch. But, when an old drive-in theater peaks over the horizon, you have reached a town that serves the best slice of Germany, complete with Oktoberfests, May poles, and enough apple strudel to satisfy any appetite. In Gibson City, you are transported to a Bavarian hunter’s lodge when you eat at Bayernstube.

This experience of European culture “across the pond” is really just a few miles away, across Illinois’ golden sea of corn, bending in waves with the cool harvest breeze.

On Friday, September 30th, the EUC staff paid a visit to Gibson City, complete with jovial German folk tunes, appropriate for the journey. (Those of you with UI library access, check out item number CDISC M1734 B38 – Bavarian Holiday – for a unique German music listening experience, complete with brass, yodeling, and some culturally puzzling moments that might spark larger musicological debates, if you are interested in that sort of thing.) As we approached Gibson City, we caught a glimpse of Twin Groves Wind Farm, one of the largest wind farms this side of the Mississippi. Wind farms are a staple in many regions of Germany, and since seeing my first windmill in my high school German textbook, I associate one with the other.

The EUC staff regrouped at the restaurant in the Dietrich Hall, named after the original owner’s father. Father Dietrich’s hunting legacy was readily apparent; restaurant guests enter the bar, which features walls of many fine examples of taxidermy. Before entering the beer hall, I was tempted to select one of the hundreds of steins adorning the main dining room to serve as my beverage glass for the evening.

Bayernstube maintains an Oktoberfest menu, including pretzels, traditional Munich “Weisswurst,” Rouladen, and a special Camembert and dark beer cheese spread. The regular menu boasts eight varieties of schnitzel (breaded, pan-fried pork or veal filets); red cabbage and sauerkraut so tasty that the pickiest eater might need convincing that they are indeed consuming cabbage; and potatoes that are served in salad, pancake, mashed, and sautéed forms. Each meal is accompanied by a basket of Bauernbrot, or farmer’s bread, plus Bayernstube’s homemade smoked sausage spread. Be warned; one slice is not enough. After selecting your entrée and drink from the list of German beers on tap, remember to save room for dessert. At the end of the meal, Dirndl-adorning waitresses display dessert trays at each table and feature an assortment of cakes, inviting guests to select a slice.

For as authentically German as we perceived our experience to be, we were glad to have a resident expert with us to provide a running commentary on the finer qualities of the meal. EUC Visiting Scholar Gregor van der Beek, along with his son, gave rave reviews of the food and atmosphere. Dr. van der Beek commented that Bayernstube embodied the style and feel of a restaurant that his grandparents would choose if they were to take the family out for a nice meal. After spending almost three months in Illinois, our German guests enjoyed the Bauernbrot and entrées, which reminded them of home, and Bavaria of course!

Although Oktoberfest has nearly drawn to a close for this year, plan on partaking in next year’s festivities, or perhaps make the pilgrimage to Bayernstube for a family meal or a get-together with friends. Bis dann!

Stay tuned for the next “Across the Cornfields” edition of “Across the Pond” – Chicago’s Christkindlmarket!

Reneé Holley is a PhD Candidate in Musicology and an EU Center Graduate Assistant. She is working on a dissertation that addresses the influence of EU cultural policies on contemporary German musical life.

Celebrating Oktoberfest: Across the Cornfields Edition

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Making Music, not Malice, Together: the European Union Capital of Culture in Essen, Germany

by Renée Gordon Holley

Amid fears of terrorist attacks and increasingly public xenophobia in Germany, tensions have grown as this founding member of the European Union and world economic leader has increasingly taken on burdens in the current financial crisis, aiding in the bail-out of Greece and now Ireland. Chancellor Angela Merkel’s declaration that multiculturalism has utterly failed in this ethnically diverse nation reflects growing concerns throughout Europe regarding uniting people from various cultures. In contrast to these dark political clouds, my field research in Germany during summer 2010 took place among celebrations, accompanied by World Cup vuvuzelas, cheering soccer fans, German flags everywhere, and news reports that Germany’s ethnically diverse team was an exemplary model of how the country had finally learned to work together with its many minorities.

Although the 2010 World Cup was an entertaining backdrop for the two and a half months I spent in Northern Westphalia last summer, the main object of my pre-dissertation research was the musical events of the EU’s Capital of Culture program. The EU’s recent participation in cultural policy has produced programs and agendas that simultaneously strive to preserve the cultural diversity of its members while highlighting common cultural threads throughout Europe. The EU’s main effort in this regard and most widely recognized program is the European Capital of Culture. Every year, several member states are selected to host an elaborate year-long series of cultural events. Cities in these countries compete for this honor in a similar style to that of Olympic cities. Along with Pécs, Hungary and Istanbul, Turkey, Essen, Germany and the entire Ruhr Region generated a rich program incorporating every aspect of culture.

As a musicologist, I am interested in the musical life of other nations and in learning about how assorted musical styles and performers contribute to the discourses of music, politics, and culture. My association with the EU Center and coursework specifically on the policies and structure of the European Union led me to consider how this institution adds to and amends the musical cultures found in its member states, especially Germany. An appropriate combination of music and EU policies made the Capital of Culture a dynamic stage where challenges regarding an aging population, cultural diversity, economic downturn, and industrial re-imagination were acted out by area orchestras, teenage pop singers, church organists, ravers, and sound sculptors.

Touted as one of the top highlights of Essen’s program, the !SING – Day of Song brought together hundreds of choirs from Europe and beyond. The four-day event featured over sixty-six individual choral performances and sing-alongs. On June 5, as over 50,000 amateur and professional singers gathered at the Veltins Soccer Arena in Gelsenkirchen, international star Bobby McFerrin and the Bochum Symphony orchestra accompanied us as young and old joined in singing Handel’s “Hallelujah Chorus,” Beethoven’s “Ode to Joy,” Schubert’s “Ave Maria,” and the Beatles’ “Let it Be.” Germany has a long history of choral singing, where amateurs sang together with hopes to strengthen a sense of German identity and political consciousness in its members and the nation as a whole. The !SING events and many of the other concerts and performances held in Essen this summer worked to unite the community and reach out to its neighbors. This demonstration of music’s role in shaping and influencing Germany’s and the EU’s citizens shows how they might move forward in the years to come, isolating and tackling political, social, and economic struggles through music.

Renée Holley is a doctoral student in musicology at the University of Illinois and an EU Center FLAS Fellow. Her pre-dissertation research was supported by a DAAD German Studies Research Grant. Next school year she plans on completing dissertation research in Bonn, Germany, analyzing music’s relationship to regional, national, and EU cultural policy agendas.

Making Music, not Malice, Together: the European Union Capital of Culture in Essen, Germany

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