Revolutionary changes in global and European politics have reawakened old fears that Europe will be dominated by an unpredictable German giant. The same changes have fueled new hopes for Germany and Europe as models of political pluralism in a peaceful and prosperous world. In fact, Peter J. Katzenstein explains, the current reality is too complex to fit either expectation. Katzenstein contends that a multilateral institutionalization of power is the most distinctive aspect of the relationship between Europe and Germany. Only the observer who is aware of this important fact can understand why Germany is willing to give up its new sovereign power. Although Germany is larger than any other member of the European Union and plays a crucial role in the economic and political life of Eastern Europe, its power is now funneled through the institutions of the European Union rather than erupting in a narrow, power-defined sense of national self-interest. The empirical chapters of this book explore the institutionalization of power relations between the European Union and Germany, as well as the relations of Germany and the European Union with most of the smaller European states.