Brake and broker: Franco-German leadership for saving EMU

ABSTRACT

Do France and Germany lead the euro zone? We argue that the governments of these two countries jointly and successfully used institutional as well as ideational leadership – both at the domestic as well as at the European levels – when creating the Economic and Monetary Union in the 1980s and 1990s. During the euro zone crisis, however, the two respective governments mainly relied on institutional leadership, but neglected the ideational component of leadership. In consequence, member states only agreed upon lowest common denominator solutions, leaving the institutional setup of the Economic and Monetary Union incomplete. More ideational engagement by the French and German governments and the investment of political capital, in our view, are necessary for the adoption of more far-ranging substantial reforms. This would make the euro zone – and more generally the European integration project – more resilient in the years to come.

KEYWORDS:

• Germany
• France
• leadership
• European Union
• European integration
• economic and Monetary Union

Acknowledgements

We thank Uwe Puetter, the participants of the EMUChoices.eu project conferences at LUISS Rome and in Stockholm, as well as the anonymous reviewers for their helpful comments. This work received financial support from the Research Executive Agency of the European Commission (Horizon 2020 Grant 649532).

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 See <https://www.ft.com/content/f0ee3348-f187-11e8-9623-d7f9881e729f> (accessed 07.01.2019).

2 Interestingly, two prominent candidates for Merkel’s successorship, Armin Laschet and Norbert Röttgen, have taken more pronounced pro-European positions in early 2020, including the possibility of extending Germany’s contributions to the EU budget. See <https://www.faz.net/aktuell/politik/sicherheitskonferenz/laschet-und-baerbock-schwarz-gruene-schelte-fuer-merkel-16636743.html> (accessed 01.03.2020).

3 See <https://www.ft.com/content/5a458a3c-7445-11e8-b6ad-3823e4384287> (accessed 10.01.2019).

4 See <https://www.reuters.com/article/us-eu-germany-france/france-germany-approve-extension-of-reconciliation-treaty-to-shore-up-eu-idUSKCN1P31FR?il=0> (accessed 10.01.2019).

Additional information

Funding

This work received financial support from the Research Executive Agency of the European Commission (Horizon 2020 Grant 649532); EU (H2020).