Between a Rock and a Hard Place: Preference Formation in France During the Eurozone Crisis
| Published date | 01 November 2020 |
| DOI | 10.1177/1478929919868600 |
| Date | 01 November 2020 |
| Subject Matter | Special Issue: The Puzzle of National Preference Formation and the Study of the Euro Crisis |
research-article2019
Special Issue Article
Political Studies Review
2020, Vol. 18(4) 507 –524
Between a Rock and a Hard
© The Author(s) 2019
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Place: Preference Formation
https://doi.org/10.1177/1478929919868600
DOI: 10.1177/1478929919868600
journals.sagepub.com/home/psrev
in France During the Eurozone
Crisis
Clement Fontan1 and Sabine Saurugger2
Abstract
This article analyses the causal factors underlying the formation of French preferences during
the Eurozone crisis solving process (2008–2017). Going beyond the clear distinction between
national preference formation and interstate bargaining of liberal intergovernmentalism, this
article combines new intergovernmentalism, political economy and feedback loops to study the
horizontal linkages between different actors included in the process of domestic preference
formation. Based on the Economic and Monetary Union (EMU) Choices dataset, which includes
semi-structured interviews conducted with French policy-makers involved in the European Union
negotiations at the highest level, we will concentrate on French preference formation in four
negotiations at the European Union level: the 3 May 2010 agreement on bilateral loans to Greece,
the initial capitalisation amount of the European Stability Mechanism, the negotiations on the legal
nature of the ‘debt-brake’ included in the Treaty on Stability, Coordination and Governance and
the reverse qualified majority voting procedure. The article shows that confidential and restricted
administrative networks played a central role in reducing the uncertainty stemming from the
fragile financial positions of the hypertrophied domestic banking system. At the same time, French
negotiators find themselves between a rock and a hard place during negotiations at the European
Union level, not crossing the red line fixed by Germany, on the one hand, and ensuring that policy
solutions are compatible with governmental political stance and domestic economic interests, on
the other hand. Contrary to recent research pointing out to the increasing influence of domestic
public opinion on national preference formation, however, feedback loops between the outcome
of the crisis solving process and French politics and policies had very little impact.
Keywords
Eurozone crisis, French economic governance, preferences formation,
liberal intergovernmentalism, feedback loops
Accepted: 18 December 2018
1UCLouvain, Saint-Louis University – Brussels, Brussels, Belgium
2Univ. Grenoble Alpes, Sciences Po Grenoble, CNRS, Grenoble, France
Corresponding author:
Clement Fontan, UCLouvain, Université St-Louis-Bruxelles, ISPOLE, 1 place Montesquieu, 1348 Louvain La
Neuve, Belgium.
Email: clement.fontan@gmail.com
508
Political Studies Review 18(4)
Introduction
The newly elected French President Emmanuel Macron made it very clear in 2017 that
France is forcefully returning to the European Union (EU) negotiation table. In his speech
at the Sorbonne on 26 September 2017, he advanced his proposals for a reinforced
Economic and Monetary Union (EMU):
What we need is a long-term economic and political strategy, and our challenge within the
eurozone is to work out how to make it an economic power which can compete with China and
the United States [. . .] And I am shouldering and will continue to shoulder France’s
responsibility, because it is in the interests of France and Europe, but we also need common
rules and instruments. We need convergence and stability through national reforms, but also by
coordinating our economic policies and a common budget.1
This statement is in line with French preferences on the Eurozone institutional archi-
tecture. Since the end of the 1980s, French governments have been seeking to comple-
ment rules-based EMU with a gouvernement économique, which is a fuzzy concept
aiming at increasing economic policy coordination and fostering EU-level intervention-
ism in order to promote growth and create jobs without losing sovereignty (Howarth,
2007: 1062). At the same time, French politicians have been using EMU rules as a ‘useful
external constraint’ to reform their economies in the face of domestic resistance (Howarth,
2007: 1061). When Emmanuel Macron underlines that he will ‘shoulder France’s respon-
sibility’, he relies on the EMU imperative to legitimise domestic reforms, but he also
hints at a new external constraint. Indeed, the new French government is trying to over-
come previous policy deadlocks between Paris and Berlin by restoring French credibility
with the implementation of structural reforms in order to push forward new Eurozone
arrangements.2
These elements, while crucial to understand France’s position in the EU, however, are
focusing on the president’s office only. The aim of this article is to open up this institu-
tional black box and to understand how and through which mechanisms France’s national
preferences with regard to the EU are established. More precisely, the article analyses the
causal factors underlying the formation of French preferences on the reforms of Eurozone
governance during the crisis (2010–2017). In line with the overall puzzle of this special
issue, which studies how political actors arrive at their ‘preferences’ in EU decision-
making, we use an original framework based on the combination of three conceptual
perspectives: new intergovernmentalism, the effects of feedback-loops between public
policy and public opinion and the political economy literature on the state-finance nexus.
France in this context is to be considered a hard or most likely case (Bennett, 2004:
50). Due to the centralised French political system, the French government has a high
level of policy autonomy regarding interstate bargaining issues. In particular, under the
Fifth Republic, authority over European affairs is concentrated in the hands of the presi-
dent, supported by a small number of high-level civil servants. Cole and Drake (2000: 28)
contend that the presidential pre-eminence in European affairs was so pronounced that
Europe was considered to form part of a ‘reserved sector’, in which the main European
decisions have been taken by French Presidents, in coordination with a small group of
high civil servants and the main economic interest groups. This understanding of prefer-
ence formation would be consistent with the core aspect of liberal intergovernmentalism
(LI), which argues that the interaction between the government and the main economic
interest groups explains how governments form their preferences. These preferences
Fontan and Saurugger
509
(demands) are then defended at the EU level, where ‘a process of interstate strategic inter-
action defines the possible political responses of the EC political system to pressures from
those governments (supply)’ (Moravcsik, 1993: 481).
We argue, however, that in order to understand the process of preference formation,
even in an extremely centralised country such as France, it is crucial to take into account
the political economy of the state-finance nexus, horizontal influence stemming from
other EU countries (in particular Germany) and feedback loops. Indeed, French negotia-
tors found themselves between a rock and a hard place during negotiations at the EU
level. They integrated the red lines fixed by Germany and other creditor countries in order
to build a space for policy compromises and combined those with the strong level of
economic patriotism existing at the domestic level. The strong autonomy of French nego-
tiators also had an impact on domestic politics.
From a methodological perspective, we rely on the EMU Choices dataset,3 which
includes semi-structured interviews conducted with high-level civil servants in every
EMU country. More precisely, two out of the four French interviewees4 were sitting at the
Economic and Financial Committee (EFC), which is the preparatory committee of
Eurogroup, Ecofin (Economic and Financial Affairs) and European Council meetings
and, hence, the heart of Eurozone governance (Fontan, 2013; Grosche and Puetter, 2008).
In order to triangulate the gathered data, we also include interviews with EFC members
from Belgium, Netherlands and Luxembourg and secondary sources. These interviews
aimed at outlining the construction of national preferences related to four case studies: the
initial Greek rescue, the capitalisation of the European Stability Mechanism (ESM), the
legal nature of the debt-brake enshrined with the Treaty on Stability, Coordination and
Governance (TSCG) and the reverse qualified majority voting (RQMV).
The article is structured as follows: in the first section, we present the combination of
the theoretical frameworks guiding the article. The second section applies this framework
to the empirical analysis.
Accounting for Preferences
Preference formation in the EU in general has been analysed prominently by LI
approaches (Moravcsik, 1993, 1998; Schimmelfennig, 2015), based on a three-step
model – domestic preference formation, intergovernmental bargaining and supranational
institution building.
According to Moravcsik (1998: 24), national preferences are an ‘ordered and weighted
set of values placed on future substantive outcomes’, which are driven by geopolitical and
economic interests in relation to European integration. Preferences are ‘not simply a par-
ticular set of policy goals but...
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