COVID-19 Pandemic as a Challenge to Franco-German Leadership in the EU

In: Mirovaja ėkonomika i meždunarodnye otnošenija: MĖMO, Volume 65, Issue 8, p. 72-80

Abstract

The study is focused on the COVID 19 pandemic as a challenge for Franco-German leadership in the European Union. The authors investigate whether joint actions by Berlin and Paris can strengthen the EU's resilience to crises. As it is shown, the first isolationist reaction of the EU states to pandemic was followed by their attempts to find a common decision. The negotiations on an anti-crisis plan were complicated by the division of the European Union states into opposing camps. Two projects proposed by them – the European Stability Mechanism (ESM) and the "coronabonds" – reflected the narrow interests of rich, frugal "Northern" and economically modest "Southern" groups, and failed. In contrast, the Franco-German cooperation became a breakthrough. In March-April 2020, Germany and France opposed each other, supporting ESM and coronabonds, respectfully. In May-June 2020, A. Merkel and E. Macron agreed to a compromise and came up with a unified position. While Germany left "frugal" group by agreeing to allocate money to support the "South" without insisting on mandatory reforms, and endorsed the idea of joint debt obligations, France refused to support the "Southern" coronabond project and agreed to the mediation of the EU Commission. That gave new breath to negotiations where a new regrouping of countries took place: the "South" states failing to defend coronabonds supported the Franco-German plan based on subsidies, while the "frugals" put forward an alternative based on loans. The EU Commission's project which included both proposals was discussed in July 2020: at that moment, the Franco-German tandem backed by the "South" states had to persuade both the "frugal" and the East- European states. Finally, the EU Commission's plan promoted by Merkel and Macron was adopted, though with serious adjustments. The authors conclude that the Franco-German alliance has confirmed its capability to strengthen the European Union resilience, but its leadership is no longer unconditional, and in the future, they should take into account the interests of the EU regional groups. Acknowledgments. The article was prepared within the project "Post-Crisis World Order: Challenges and Technologies, Competition and Cooperation" supported by the grant from Ministry of Science and Higher Education of the Russian Federation program for research projects in priority areas of scientific and technological development (Agreement № 075-15-2020-783).