Franco-German cooperation and the rescuing of the Eurozone

AuthorHanno Degner,Dirk Leuffen
Published date01 March 2019
Date01 March 2019
DOIhttp://doi.org/10.1177/1465116518811076
Subject MatterArticles
Article
Franco-German
cooperation and the
rescuing of the Eurozone
Hanno Degner
Department of Politics and Public Administration, University
of Konstanz, Konstanz, Germany
Dirk Leuffen
Department of Politics and Public Administration, University
of Konstanz, Konstanz, Germany
Abstract
This article analyzes the effect of Franco-German cooperation on Economic and
Monetary Union reforms, negotiated between 2010 and 2015. We identify three
causal mechanisms theorizing how Franco-German cooperation affected the outcomes
of EMU negotiations, namely through (a) the elimination of issues from the negotiation
agenda; (b) the identification of compromise solutions or the provision of compensa-
tions; and (c) the power-based imposition of joint agreements on other member states.
We use process tracing to analyze almost the full sample of contested issues included in
the ‘EMU Positions’ dataset. Our findings underline that France and Germany indeed
eliminated issues to which they were jointly opposed, but they also positively shaped
the agenda by proposing compromises and offering compensation. No evidence sup-
ports the power-focused perspective of a Franco-German directoire.
Keywords
Economic and Monetary Union, France, Germany, interstate bargaining, power
Corresponding author:
Hanno Degner, Department of Politics and Public Administration, University of Konstanz, P.O. Box 83,
Universit
atsstraße 10, D – 78467 Konstanz, Germany.
Email: Hanno.Degner@uni-konstanz.de
European Union Politics
2019, Vol. 20(1) 89–108
!The Author(s) 2018
Article reuse guidelines:
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DOI: 10.1177/1465116518811076
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Introduction
A gap often exists between how practitioners and journalists perceive politics, and
how political scientists understand political decision-making. A prominent case of
such a discrepancy is the role attributed to Germany and France in the politics of
the Eurozone Crisis. Whereas political decision-makers and journalists regularly
ascribe major importance to these two states for the politics and outcomes of the
crisis, a number of academic experts remain more skeptical as to the importance of
these two countries, both individually and as a team (Dinan et al., 2017: 373; Menz
and Smith, 2013: 203).
This article analyzes whether and, if yes, how Franco-German cooperation has
shaped Economic and Monetary Union (EMU) reform, negotiated between the
years of 2010 and 2015.
1
To this end, we propose three mechanisms linking
Franco-German cooperation to EMU decision-making. The f‌irst mechanism
refers to the elimination of proposals or issues from the European negotiation
agenda; by casting a joint veto, France and Germany are argued to have reduced
the choice set available to the other member states. The second mechanism sug-
gests that these two countries broker solutions that are acceptable for the other
member states. France and Germany form an inner negotiation circle to develop
compromises and propose compensation measures. Therefore, they reduce the
transaction costs of European Union (EU) decision-making. According to the
third mechanism, France and Germany constitute a directoire that imposes its
preferred solutions on other member states.
To test the effects of Franco-German cooperation on EMU decision-making,
we apply process tracing to almost the entire sample of proposals contained in the
‘EMU Positions’ dataset (cf. Wasserfallen et al., 2019). By covering such a medium
to large number of cases, we possess a solid empirical basis to support or reject the
mechanisms specif‌ied in the theoretical part of the article. We try to reduce the risk
of erroneous interpretations of the data by providing a qualitative in-depth look
on the very same issues that are treated quantitatively by the other contributions to
this special issue. This allows us to engage in a mixed-methods debate on the
politics of EMU reform during the Eurozone Crisis. At the same time, we must
concede that archival data, which will only be available in several decades, might
provide more reliable and/or precise measures of what member states truly aimed
to achieve during the Eurozone Crisis.
Our within- and across-case analyses reveal that France and Germany, indeed,
jointly affected EMU reform between 2010 and 2015, even beyond their individual
weights as large and powerful member states. In particular, we show that these two
countries together eliminated a number of issues from the off‌icial negotiation table,
which substantially impacted the f‌inal negotiation outcomes. In addition, our case
studies highlight that France and Germany repeatedly engaged in identifying com-
promise solutions or compensations, and thus facilitated the adoption of key
reforms. Our case studies do not, however, support the directoire reading of the
Franco-German couple. We f‌ind no evidence that France and Germany were able to
90 European Union Politics 20(1)

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