Embedded Bilateralism, Integration Theory, and European Crisis Politics: France, Germany, and the Birth of the EU Corona Recovery Fund*

Abstract

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.

Economic ideas, party politics, or material interests? Explaining Germany’s support for the EU corona recovery plan

“…Notions of moral hazard and free-riding, which had blocked previous debates over greater EU fiscal risk-sharing, this time did not apply and were not evoked. 8 In addition to the particular nature and consequences of the corona crisis, the following initiative for an EU recovery plan was stimulated by the role and importance of Franco-German relations in Europe and the two countries' 'embedded bilateralism' (Krotz & Schramm, 2021). After German political elites had concluded that ambitious European financial measures were needed, the 'natural' actor to align with was France (Interviews 5, 6, 10, 13).…”

Bilateral leadership in critical moments: France, Germany, and the management of major European integration crises

“…To cushion the most immediate damages, the EU’s supranational actors, notably the Commission and the ECB, had taken fast measures, such as suspending fiscal deficit rules and buying (additional) government bonds. To enable strong and even recovery across Europe, however, and to foster political unity, national governments had to step in Krotz and Schramm ( 2022 ).…”

Building ‘Next Generation’ after the pandemic: The implementation and implications of the EU Covid Recovery Plan

“…In July 2020, the European Council agreed on a strong and common EU fiscal response to the social and economic damage caused by the Covid‐19 pandemic (European Council, 2020; Krotz & Schramm, 2022). In addition to the EU's next multiannual financial framework (MFF) for 2021–2027, which had to be adopted by December 2020, the heads of state or government endorsed the NGEU recovery package.…”