How did German voters in the general election in October 1998 react to the European Council’s unanimous decision on May, 2 1998 to adopt a single currency beginning with January, 1st 1999? The aim of our study is to empirically analyze the sensitivity of the German electorate towards this crucial step of European integration. Specifically, we want to determine in a mover/stayer model whether this decision had an impact on the reelection chances of the responsible government? Contrary to previous studies, our focus is on voter reactions as a function of their attitudes towards exchange rate regime change. Nevertheless, we also consider the factors explaining the approval/disapproval of exchange regime change by endogenizing the former in our simultaneous model. Our theoretical starting point is the hypothesis on the differential incidence of EMU on different socio-economic segments –as put forward f.ex. by Frieden – that we integrate in a punishment model of voting. With regard to our empirical results the conclusions are diverse: The voters' refusal of EMU did not contribute in a statistically significant way to the punishment of the German government when we control for generic party loyalty. The hypothesis of an expected differential incidence of EMU in terms of export dependency cannot be confirmed by our model. However, both the refusal of EMU and the punishment of the government have statistically significant unobserved factors in common, pointing to the fact that – due to the high informational requirements – attitudes towards EMU have been rather the result of diffuse ideosyncratic sentiments correlated with the overall dissatisfaction of the performance of the former government.
