What explains the creation of the EU corona recovery fund? Why did the Union agree on a large-scale financial response to the corona pandemic, despite member states' very different immediate reactions to the crisis and their opposing attitudes towards common debt? This article argues for the decisiveness of France and Germany's role within the Union and their tight bilateral political cooperation. The 'embedded bilateralism' approach to European integration and EU politics explains how and why France and Germany, starting from different poles, came together and established joint positions, paving the way for an overall European compromise. Focusing on these two countries' particular leadership role advances the theoretical debate about the actors most crucial for driving European integration, especially in times of severe crisis.

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Why did the German government champion a debt-financed and grants-based EU corona recovery plan, despite the country's traditional aversion towards greater fiscal risk-sharing in Europe? To elucidate this question, this article critically assesses different explanatory factors cited in the academic literature and public debate to determine a country's response to pressing challenges. Tracing Germany's approach to the corona pandemic within the EU context, it finds that national material interests rather than (new) economic ideas or party politics were decisive. The timing, scope, as well as the limits of the German-inspired recovery plan for the fight against the corona crisis suggests at least as much continuity as change in Germany's position on EU fiscal policy. Yet, the findings also highlight Germany's enduring, and in fact reinforced, commitment to European integration and its preparedness to provide stability in moments of deep crisis for the EU.

What are the implications of Brexit for the nature, role, and potential of Franco-German leadership in the EU? Brexit, we contend, is both an expression and a further cause of two broader underlying developments in the contemporary EU: First, a stronger and more prominent German part and position, and second, disintegrative tendencies in several EU policy fields and the EU polity as a whole. This, in turn, has major implications for Franco-German bilateralism and for Franco-German leadership in the EU. In light of a stronger Germany, a relatively weaker France, and significant centrifugal forces, the two largest EU member states must not only realign their bilateral relationship but must also act as a stabilizer in and for the EU. We show that during the EU’s recent crises, not least during the Brexit negotiations and the recovery from the Covid-19 pandemic, France and Germany did exercise joint leadership. We also show, however, that major discrepancies persist between the two countries in particular policy fields and with regard to longer-term European objectives. Brexit, with its numerous calamities and implications, thus once again moves Franco-German leadership—and its shortcomings—to center stage in Europe. When it comes to leadership in the EU, there remains no viable alternative to the Franco-German duo. Yet, in order to provide constructive leadership and successfully shape the EU, the two countries must bridge substantial differences and be ready to carry disproportionately high burdens.