Master of Arts Thesis

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Master of Arts Thesis

Euroculture Rijksuniversiteit Groningen (Home)

Università degli Studi di Udine (Host)

France and Germany:

The Engine of the European Union in Trouble?

Submitted by: Rick Jonker Student number home university: 1723316

Student number host university:- Contact details (e-mail): jonkerrick@gmail.com

Supervised by: Name of supervisor home university: dr. C.M. Megens, c.m.megens@rug.nl Name of supervisor host university: prof. A. Zannini, andrea.zannini@uniud.it

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MA Programme Euroculture Declaration

I, Rick Jonker hereby declare that this thesis, entitled “France and Germany: The Engine of the European Union in Trouble?”, submitted as partial requirement for the MA Programme Euroculture, is my own original work and expressed in my own words. Any use made within this text of works of other authors in any form (e.g. ideas, figures, texts, tables, etc.) are properly acknowledged in the text as well as in the bibliography.

I hereby also acknowledge that I was informed about the regulations pertaining to the assessment of the MA thesis Euroculture and about the general completion rules for the Master of Arts Programme Euroculture.

Rick Jonker

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Introduction

In most groups a leader is indispensable for the success of it, as a leader often takes initiatives in order to advance the whole group. This rule upholds in small groups such as students who have to make a project together, but also in international groups such as international organisations who have countries as its members. However, is leadership divisible, in other words can a group have more then one leader? It is often said that you cannot have room for two captains on one ship because this will lead to disagreement and ultimately to destruction. The famous Shakespeare therefore said, 'if two men ride on a horse, one must ride behind'1 meaning that in the end just one person can take the lead, while the other is relegated to a supportive role.

With this in mind the European Union forms an atypical group of countries because it has no real leader. The power of it is divided between the European Council consisting of heads of government or state of each of the 28 Member States, the European Commission and the European Parliament. However, since the beginning of the European cooperation and integration project their have been de facto two leading countries, namely France and Germany. Due to their reconciliation after the Second World War, the two former archenemies were able to establish a close bilateral relationship, despite their numerous differences. The symbolic beginning of this relationship was the signing of Élysée Treaty in 1963 by President Charles de Gaulle and Chancellor Konrad Adenauer. This relationship has proven to be an important foundation for the European integration project, because these two countries were the ones who could overcome disagreements in order to advance the project. What has made their leadership role within the EU special, is the fact that it was a joint-leadership on equal footing. According to political scientist Eckhard Lübkemeier this form of leaderships fits an organisation like the EU. He states that 'leadership in the EU is provided by actors who are willing and capable, acting as co-leaders, to prompt other actors to contribute to the achievement of collective goals'.2 The fact that France and Germany have acted as co-leaders over the years has given them the nickname, the engine of the European Union. It is even said that nothing goes without and nothing against Germany and France.

This makes evident that France and Germany play a pivotal role within the European Union. However, it seems that since the Euro zone crisis emerged in late 2009, France and

1_{William Shakespeare, Barbara A. Mowat (ed.) and Paul Werstine (ed.), Much Ado About Nothing (Washington:}

Washington Square Press 2004) (first published 1600), 34.

2_{Eckhard Lübkemeier, 'Führung ist wie Liebe. Warum Mit-Führung in Europa notwendig ist und wer sie leisten}

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Germany found it much harder to act as joint-leaders of the EU. This was due to their social-economic and political differences, which became clearly visible again. Furthermore Germany has become the economic champion of the EU in the last years, while France is falling behind (economically) and is starting to look like a giant with feet of clay. These recent developments make it relevant once again to investigate the French-German partnership in relation to the EU.

The central question of this master thesis will be: to what extent has the euro crisis made visible a break in the French-German relationship and does this have consequences for the European Union? In addition, special attention will be given to the role of France and Germany as leadership tandem within the EU. The causes of an eventual break in the French-German relationship and possible alternatives to it, will also be investigated. The aim of this thesis is to see whether the disagreements about the solutions of the euro crisis are just incidents in the warm relationship between the two countries and within their joint-leadership of the EU. Or was it the start of a process in which the two leading EU Member States are drifting apart, causing damage to their role as a leadership tandem?

As this thesis will look upon the Franco-German bilateral relationship and their role as a tandem within the EU, traditional international relations theories will not be that helpful. Most of these theories take single states as actors, while this thesis takes a tandem of two states as central actor. Therefore the concept of "embedded bilateralism" will bring help, which is developed by Ulrich Krotz, Professor of International Relations at the European University Institute and Joachim Schild, Professor of Political Science at the University of Trier. ‘Embedded bilateralism captures the nature of an institutionalized and normatively grounded interstate relationship and it addresses the interrelationship between this bilateral connection and multilateral institution of which the bilateral bond forms a constitutive part’.3 This concept forms an excellent framework for this thesis, because its touches upon the two sides of this thesis, the bilateral French-German relationship and their joint role within the EU.

In the first part of the thesis the concept of embedded bilateralism will be further explained, including its wider context.

The second part will give an historical overview from the Franco-German relationship since the signing of the Élysée Treaty in 1963. It will clarify how the two countries became the frontrunners of the European integration project and which difficulties they came across in

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this process. This is to see whether the euro crisis might be just one of the several troublesome periods in the bilateral relationship. The central question of this part will be: to what extent is it justified to call France and Germany the engine of the EU?

The third part will deal with the changing political and economic circumstances and positions of France and Germany in the last two decades. Namely, Germany regained its self-assurance, reunified with East-Germany and reformed itself into a stable economy, while France seems to be in decline. Therefore the central question will be: what is the influence of the changing circumstances on the functioning of the French-German tandem within the EU?

The fourth part is about the creation the European Monetary Union. Although France and Germany agreed upon the creation of a currency union. The reasons how to introduce it were different for both. Perhaps this was already a forerunner for the euro crisis more then a decade later. For this the 'euro summits' will be investigated, in order to see how France and Germany acted in this crisis. The central question of this part is: to what extent is the euro a divisive element in the German tandem? So has the euro crisis drifted apart the French-German couple?

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Conceptual framework

Embedded bilateralism

This thesis will deal with European Integration and the role of the French-German relationship in it. Many scholars have already studied both phenomena’s separately, but ‘theories of European integration have little explicitly said about bilateral relationships’4 within the EU. Therefore this thesis will rely on a relatively new concept named embedded bilateralism developed by Ulrich Krotz and Joachim Schild, which is a perspective about the quality of the French-German relationship and its role in European Integration. ‘ On the one hand, embedded bilateralism captures the intertwined nature of a robustly institutionalized and normatively grounded interstate relationship. On the other, this concept addresses the interrelationship between this bilateral connection and multilateral European politics- of which this bilateral bond forms a constitutive part, and to the structuring to which it strongly contributes.5 Although it seems that the concept is uniquely developed to explain the French-German case within Europe, it can also be applied to for example the case of the United States and the United Kingdom within NATO. These two countries also have a close bilateral relationship and play an important role as leadership tandem within an international organisation.

What makes these kind of bilateral relationships different from others is firstly, the fact that they are durable and regularized, this contains the concept of regularized bilateral intergovernmentalism. This concept contains five properties '1: it regulates foreign policy interaction among those involved, 2: it has elements of intensification of foreign policy interactions and communication, 3:it commonly seems to apply to bilateral foreign policy relationships, 4: the actors involved represent states, 5: the highest office holders (prime ministers, presidents) are involved.'6 Secondly, embedded bilateral relationships have their own institutional, historical or normative reality and are thus not only based on an instrumental understanding of their utility but also underpinned by convergent or complementary interests. Thirdly, embedded bilateral relationships accept a common responsibility for providing leadership and orientation as well as the necessary glue that holds

4_{Alistar Cole, Franco-German Relations (Harlow : Longman, 2001), 22.}

5_{Ulrich Krotz and Joachim Schild, 'Shaping Europe: France, Germany, and Embedded Bilateralism from the} Élysée Treaty to Twenty-First Century Politics' (Oxford: Oxford University Press, 2013), 8

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together the multilateral framework.7 These characteristics make the French-German bilateral relationship inside the EU different from for example the British-German or French-British relationship.

The embedded bilateral relationship can be described as a subsystem inside an international organisation, ‘defined by the special relationship among its constituent parts, the duration and formalization of their relationships, and their effectiveness in terms of influencing the entire system.’8 These kind of subsystems have thus an impact on the whole ‘a negotiation process changes if a particular bilateral coalition becomes a durable and predictable feature.’9 Moreover, although the activities of these subsystems are less visible, they should be taken into consideration, because they constitute an entire level of a policy making process within an international organisation as the EU is. Exactly this aspect is often overlooked by other approaches and theories about European integration.

Neofunctionalism for example, focuses on the growing international interdependence and on the interplay between the demands of societal actors engaged in cross-border interactions for European-level rules or policies, and the supply of these policies provided by the supranational actors.10 Embedded bilateralism wants to add to this the importance of large Member States, ‘in bringing about forms of supranational governance in the first place. Moreover, it wants to underline the parallel development and strengthening of supranational and intergovernmental forms of government.' 11 This process in European integration process cannot be explained, without looking into the role of France and Germany. These two countries are the ones who strike constitutional compromises in the field of European treaty making.

A second European integration theory namely, liberal intergovernmentalism developed by Andrew Moravcsik places France, Germany and the United Kingdom in the centre of European integration. When the preferences of these three countries converge, it allows them to strike major European bargains to manage situations of growing economic interdependence.12 However, it does not go into detail what kind of leadership and political

7_{Idem, 9.} 8_{Idem, 10.}

9_{Helen Wallace, ‘Bilateral, Trilateral and Multilateral Negotiations in the European Community’, in Partners} and Rivals in Western Europe: Britain, France and Germany, ed. Roger Morgan and Caroline Bray (Aldershot: Gower, 1986), 156.

10_{Ernst B. Haas, ‘International Integration: The European and the Universal Process’, International} Organisation 15(3), 1961, 366.

11_{Ulrich Krotz and Joachim Schild, 'Shaping Europe: France, Germany, and Embedded Bilateralism from the} Élysée Treaty to Twenty-First Century Politics' (Oxford: Oxford University Press, 2013), 12.

12_{Andrew Moravcsik, 'Preferences and Power in the European Community: A Liberal Intergovernmentalist}

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strategy is needed in order to strike compromises to bring about major bargains. Embedded bilateralism differs from liberal intergovernmentalism as it sees the French-German relationship as a separate level in the EU policy process'. This is not a new insight as political scientist Douglas Webber stated already in 1999 that the French-German bilateral bond is 'distinguishable from the domestic level at which national governments bargain with domestic interest groups over the stance they should take on EU issues and the European level at which they negotiate with other governments as a whole in the Council and with supranational actors.'13 In other words liberal intergovernmentalism and other forms of this theory do not value 'the reality of bilateral interstate relationships and the special integration-promoting and stabilizing functions performed by the French-German embedded bilateralism for the wider European project.'14

By now it is clear that the concept of embedded bilateralism tries to add to existing European integration theories, the embedded bilateral relationship between France and Germany, because it is such an important subsystem. The developers Krotz and Schild even state that these embedded bilateral relationships are indispensable for the functioning and the resilience of international organizations such as the EU. However, after the reunification of Germany scholars started with defining Germany as the core state of the EU or even as hegemon, due to the fact that its size influence and geographic centrality increased.15_These

scholars argue that Germany is playing more and more a pivotal role on its own within the EU. This would mean a lower impact of or the end to the role as tandem of France and Germany and thus would turn the EU into trouble according to Krotz and Schild. This will be addressed in the fifth part of the thesis, which deals with the consequences of a bad functioning French-German tandem within the EU and possible alternatives to it.

Embedded bilateralism as a measurement instrument

Embedded bilateralism contains some empirical and measurable variables which will make the concept even more useful for this thesis. As they can make visible to what extent there is a break in the relationship between France and Germany due to the euro crisis which ca influence the whole EU. These variables are , '1: instances in which France and Germany jointly define positions ahead of European negotiations, and that such positions may differ

13_{Douglas Webber, 'Franco-German Bilateralism and Agricultural Politics in the European Union: The}

Neglected Level', West European Politics 22, no.1 (1999): 48.

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from ones arrived at exclusively through national-level preference formation, 2: a proactive presence of France and Germany in European integration, 3: a flurry of bilateral activities whenever serious bilateral dissent and conflict emerge on European issues, and 4: a prominent role in European crisis management activities flowing from their shared understanding of holding a special historically grounded responsibility for the preservation of the European project.16

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The emergence of the engine of the European Union 1950- 1989

France and Germany, two countries, two cultures, two visions, acted together in order to create a peaceful and prosperous Europe. Who would have expected this 100 years ago, when the two started a bloody and cruel war against each other, which lasted for four years and has proven to be a forerunner of an even bigger war 21 years later. Feelings of mistrust, revenge and hate predominated the relationship between France and Germany since the Napoleonic wars at the beginning of the 19th century. The fact that these arch-enemies were able to set aside these feelings so quickly after the Second World War is just unique. The end of hostility between France and Germany was the beginning of a close bilateral relationship between the two. The French-German relationship was even so noteworthy that it was theorized within the concept of embedded bilateralism, as is described in the first part. This was the case because the relationship had and still has a big influence on the European integration project, the European Union. Because of this influence France and Germany got the nickname, the engine of the EU. To see whether this nickname is justified, this section will investigate the emergence of this special bilateral relationship in the first period of European integration and during the Cold War. In addition this section will, next to the historical overview, focus on the difficult periods in the relationship between France and Germany. This is relevant because it can clarify whether the euro crisis, which will be investigated in section four, shows resemblance to these periods or that it caused a break in the relationship.

First steps towards European Integration: ECSC, EDC and EEC

As was said in the introduction, the signing of the Élysée Treaty in 1963 was the symbolic start of the special relationship between France and Germany. However, before that moment the two countries had set up already the European integration process. Economic interdependence, the Cold War and the big influence of the United States in Europe, where the elements on which this process was based.17 Notwithstanding the fact that France was mainly interested in European integration, because this could neutralize the threatening German supremacy in Europe. For Germany European integration could contribute to the rehabilitation of the country within international community. The establishment of the European Coal and Steel Community (ECSC) in 1951 exactly served these interests, France got the assurance that Germany could no longer decide on its own about strategic resources

17_{M.C.J. Jehee, J.A. de Koning and J.W Sap, De Frans-Duitse as: tiranniek of sympathiek? (Groningen:}

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and Germany got recognition and a tool towards more European integration.18 Despite the name ECSC, the preamble of the treaty which has made this organisation possible hardly mentions coal and steel, it emphasizes the importance of enduring peace between France and Germany.19 Next to France and Germany four other countries became founding Member States of the ECSC, namely Italy, the Netherlands, Belgium and Luxembourg.

The ECSC was a real political success and became the basis of further European integration. Already one year after Robert Schuman launched the ECSC, the French Prime Minister Pléven came up with an initiative to set up an European Defence Community (EDC). The idea behind this plan was to combine the national armies of the six ECSC countries under a supranational commando structure.20 This could reconcile the problem of German rearmament with the French fear for such rearmament. However, this caused some problems because the plan did not make clear how political control on an European army could be organized. Therefore the European Political Community (EPC) was proposed in order to combine the ECSC and EDC in a political organisation. These new plans caused friction between France and Germany. For Germany the EDC was an advantage, as 'a permanent reduction of their sovereignty became more tolerable if full sovereignty were sacrificed to European institutions, demanding comparable sacrifices form their partners.'21 While in France the EDC proposal caused a big political conflict in the country, wartime hero Charles de Gaulle opposed the EDC and stated ' I will work with the Communists to block it. I will unleash a revolution against it, I would prefer to ally myself with the Russians to stop it.'22 For the majority of the French it was just unacceptable to give up their own army. After three years of political dawdling the EDC and the EPC were killed by the French parliament. The failure of these proposals made clear the difference of opinion about how to create European institutions. Germany was in favour of a supranational structure, which made a transfer of sovereignty necessary, while France was in favour of a more intergovernmental structure where the ultimate power is in the hands of the nation states. Furthermore, it is noteworthy that nothing substantial has been done by France and Germany to strike a compromise on these proposals, so the bilateral relationship was not yet the booster of European integration as it would become later on.

Wolters-Noordhoff, 1996), 5.

19_{Treaty establishing the European Coal and Steel Community, Paris, 18 April 1951.}

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Despite the failure of the EDC and the EPC, the process of European integration continued, but in a reduced form mainly focused on economic cooperation and less supranational. This resulted in the foundation of the European Economic Community (EEC) in 1957, which had to lead to a customs union were trade could be transported without import or export duties and other obstacles. As the ECSC treaty, the EEC treaty was a compromise between French and German interests.23 The German economy could benefit a lot from free trade within Europe, while France got compensation for the negative effects of this free trade with the creation of the Common Agriculture Policy (CAP).

The Élysée treaty: the foundation of the engine of the European Union Charles de Gaulle - Konrad Adenauer

A year after the EEC was established Charles de Gaulle became president of France in 1959. This wartime hero had a huge influence on the European integration process during the sixties. He had a reluctance towards the ECSC and in the beginning also towards the EEC, because he was in favour of 'l'Europe des Patries' in which nation states are the most important actors and not supranational European institutions.24 Despite this reluctance the Gaulle did not put the slightest obstacle in the way of the EEC, this was because of the fact that it was already fully established before he came to power and the CAP was very beneficial for France's agricultural sector. Furthermore De Gaulle's policy towards Germany was very friendly, due to the fact that he developed a warm relationship with Chancellor Konrad Adenauer. The two shared a form of catholic conservatism and antipathy towards Britain, but noteworthy is the fact that Adenauer was, in contrast to the Gaulle, a fervent adherent of supranational European integration. This way of integration fitted better with the federal form of government in Germany. So it was no wonder that the French Fouchet plan in 1961, which tried to establish an intergovernmental union of European States, failed. Moreover, the plan was blocked by Germany and other Member States for fear of French domination.25

After this failure of French-German cooperation within Europe, de Gaulle changed track, he wanted to achieve this cooperation by means of a bilateral treaty with Germany. One of the major reasons of this changed attitude was the Gaulle's veto to EEC-membership of the United Kingdom on 14 January 1963, while Germany was strongly in favour of this possible

23_{P. McCarthey, 'Condemned to Partnership: The Franco-German Relationship, 1944-1983', in} France-Germany 1983-1993, The Struggle to Cooperate, ed. Patric McCarthey (Hampshire: MacMillan Press, 1993), 9.

24_{D. Johnson, 'De Gaulle and France's Role in the World', in De Gaulle and Twentieth Century France, ed.}

Hugh Cough and John Horne (London: Hodder Headline Group, 1994), 92.

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new Member State. Only a week after this veto a treaty of friendship between France and Germany, the Élysée treaty, was signed. This treaty was much more than a French tactic to get influence on Germany. It marked the end of the arch-enmity between France and Germany and it gave permanence to the enormously improved relations between the two countries. The making and signing of the Élysée treaty was surrounded by symbolism, Adenauer and de Gaulle paid state visits to each others countries and they attended a mass in the cathedral of Reims, once destructed by Germany in the WOI. After the actual signing the two old French and German leaders, both marked by two wars, were so affected that they hugged each other and concluded the treaty with a fraternal kiss.26

The main aim of the treaty was to bind the two countries to the goal of bilateral proximity, this was done by a strong institutionalized framework. It regularized meetings between all sorts officials of the two countries, from diplomats to ministers and heads of government. 'The two governments consult each other before every important decision in all important questions of foreign policy, in particular in questions of joint interest, in order to arrive as much as possible at common positions.'27 To put it differently, France and Germany committed themselves to a consultation duty, especially in European integration affairs, this part was seen as the core of the treaty. Beside this the treaty laid the foundation for cooperation between France and German on defence, education and youth matters. This last matter consists of exchanges between young people, in order to promote further reconciliation and integration between the two peoples. The consultation duty in the Élysée treaty can be seen as an example of regularized bilateral intergovernmentalism, as described in the first part, which would become a defining feature of the French-German relationship and at the same time the essential part of their joint leadership within the EU, but this was still in the future.

Despite Adenauer's enthusiasm about the Élysée treaty many German parliamentarians, including his presumptive successor Ludwig Erhard, feared that this treaty could have negative consequences for the Atlantic alliance with the United States. In order to get the treaty passed by the Bundestag, a preamble was designed which contained a reconfirmation of the strong ties Germany had with NATO and a wish to include Great Britain in the EEC.28 De Gaulle was disappointed by this unilateral preamble to the treaty, as

27_{France and Germany, The Élysée Treaty, 1963.}

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in his view it would enervate the treaty, which would not contribute to the French-German relationship.

Empty chair crisis and first attempts to enlarge the EEC Charles de Gaulle - Ludwig Erhard

This became visible, when the European Commission proposed among other (supranational) plans, majority voting in the Council of Ministers of the EEC. De Gaulle as intergovernmentalist was very opposed to these plans and in protest against it, he did not send any French representative to the Council of Ministers any longer. This policy of the empty chair paralyzed the decision making process within the EEC, as nothing could be decided without France. This lasted from July 1965 until January 1966. At the same time the new German Chancellor Erhard was not as attached to the French-German tandem within the EEC as his predecessor Adenauer.29 Germany was not satisfied with the dominant position of France in the first years of the EEC and the very high contribution it had to make to the CAP. Moreover it did not think that France really wanted to leave the EEC, if it did not get is way. These facts combined made the Germans, together with the other four EEC members, oppose France.30 This crisis made clear that the mechanisms of regularized bilateral intergovernmentalism founded in the Élysée treaty were not yet beneficial to the European integration project. Despite that the treaty-based meetings were held between the French and German leaders, it did not result in a solution for the empty chair crisis. Furthermore, as described in the conceptual framework, in times of crises the embedded bilateral relationship between France and Germany should organize bilateral activities when serious bilateral dissent and conflict emerge on European issues. This was certainly not the case during the empty chair crisis. Perhaps this was due to the fact that the embedded bilateral relationship was scarcely out of the egg. The ultimate solution to the crisis was rather disappointing as it was an agreement to disagree, which was named the Luxembourg compromise. From then on majority decisions could be taken, but when very important interests of one or more Member States were at stake, then the Council of Ministers of the EEC should try to come up with a proposal which was acceptable for all Member States. This was de facto a veto power for

30_{N. Piers Ludlow, 'Challenging French Leadership in Europe: Germany, Italy, the Netherlands and the}

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each Member State, which enormously hampered the decision making process in the EEC for a long time.31

Beside this, also the attempts to enlarge the EEC with the United Kingdom were blocked by de Gaulle twice, in 1963 and 1966. He simply said no to the British because he did not want to have an Anglo-Saxon influence and thus according to him an American influence on the European Community. In De Gaulle's view the UK was the Trojan Horse for the USA which had to be blocked. De Gaulle did not find Germany on his side, which was not good for their bilateral relationship, this made de Gaulle think of the creation of a bilateral treaty with Germany. Until the end of de Gaulle's presidency in 1969 not much progress was made in the European integration process and the special French-German relationship was a bit relegated to the background.

Provisional steps towards widening, deepening and completion the EEC Georges Pompidou - Willy Brandt

In 1969 both France and Germany got a new leader, the Gaullist George Pompidou became president of France and the social-democrat Willy Brandt became chancellor. At first point this seemed to be an opportunity for better cooperation between the two countries and for progress of the EEC. In this light, the summit in The Hague in 1969 was encouraging, the possibility was created for the UK, Ireland and Denmark to join the EEC (widening) and European cooperation on foreign policy became possible with the foundation of the European Political Cooperation (EPC) in 1970 (deepening). Moreover on the basis of the economical success of the EEC, an agreement was reached in 1971 about the realisation of an Economic and Monetary Union (EMU) in 1980 (completion).32 However, this optimistic period came to an end very quickly due to the first oil crisis in 1973. Fear for a severe recession and increasing inflation thwarted all the EMU plans. Once again it became clear that in times of crisis the Member States preferred to tackle the problems nationally instead of creating common policies in order to withstand economic downturn.

Besides this, the relationship between the French and German leaders Pompidou and Brandt was not very warm. The term ‘French-German couple’ was rarely used during their period in office, in contrast to earlier and later times. The German ambassador Sigismund von

31_{A.L. Teusdale, 'The Life and Death of the Luxembourg Compromise, Journal of Common Market Studies 31,}

no.4 (1993): 567.

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Braun in France stated that Brandt and Pompidou did not have ‘ persönliche Chemie’.33 There was no political convergence between the two leaders on European integration policy. This made it hard to come up with common anti crisis measures during the oil crisis. Moreover, the spearhead of Brandt foreign policy was not the relationship with France, but the one with East-Germany and the Communist bloc. This policy is famously known as ‘Ost-Politik’, Brandt wanted to normalize the relationships with this area. Although this policy arouse some suspicion in Paris because it seemed that Germany would turn away from the west, Pompidou gave no encouragement to senior conservative German politicians who were against this policy of Brandt.34 In addition to this, differences of opinion about the possible EMU appeared in the same period. Both countries were convinced that a certain economic convergence was necessary between the participating countries, but did not agree about how much convergence was needed. France believed that convergence was a consequence of becoming a member of the EMU, while Germany stated that convergence must be there before the EMU can start, otherwise it would be exposed to too much tensions which would lead to a breakup of the union.35

What can be concluded from this period is that President Pompidou largely hold on to the Gaullist principles of intergovernmentalism and national independence as the attempts to deepen the EEC were rather superficial. At the same time the foreign policy of Chancellor Brandt was more focused on the Communist bloc. These to facts combined with the ‘cold’ relationship between the two leaders, made the functioning of the French-German engine within the EEC difficult. So the mechanisms of regularized bilateral intergovernmentalism proved rather useless, as not much was done to come up with common French-German initiatives or attempts to solve the oil crisis and to progress the EEC.

The progress of the EEC by means of pragmatism Valéry Giscard d’Estaing - Helmut Schmidt

In 1974 again both France and Germany got a new leader at the same time, the conservative-liberal Giscard d’Estaing became president of France and the social-democrat Helmut Schmidt became chancellor of Germany. Unlike the previous leadership change this meant a real turning point in the French-German relationship. Giscard d’ Estaing and Schmidt got on

33_{Claudia Hiepel, Willy Brandt und Georges Pompidou, Deutsch-französiche Europapolitik zwischen Aufbruch} und Krise (München: Olenbourg, 2012), 312.

34_{W. Friend, The Linchpin: French-German Relations 1950-1990 (New York: Praeger, 1991), 53.} 35_{M.C.J. Jehee, J.A. de Koning and J.W Sap, De Frans-Duitse as: tiranniek of sympathiek? (Groningen:}

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well together, they both knew each other already from the period they were minister of Finance in their countries.36 Moreover, Giscard d’Estaing wanted to start a more friendly policy towards the United States. The attitude towards the United States was always a major divisive element in the French-German relationship, as Germany was way more Atlanticist then France.37 In addition to the improvement of the bilateral relationship, 1974 marked a clear shift away from the supranational/intergovernmentalist divide on European institutional issues. Giscard d’ Estaing and Schmidt were both in favour of pragmatic policy making also on European affairs.38 The changed atmosphere in the French-German relationship was marked by several initiatives to fulfil the need for 'better coordination of European reactions to economic turmoil after the breakdown of the Bretton Woods system and the oil crisis.'39

Giscard d'Estaing proposed to hold regular summit meetings three times a year, with all heads of government and/or state of the Member States. These summits were institutionalized under the name of European Councils and hold sketch the broad outlines of the European integration process. It is noteworthy that Schmidt, coming from a federal state structure, gave full backing to this intergovernmental proposal.40 At the same time Giscard d'Estaing had to agree with a directly elected European Parliament (EP), despite that his Gaullist coalition partner was strongly against it. Although no real direct decision powers were given to the EP, France legitimized an entity on which the national leaders did not have a direct influence. In addition, it became possible to discuss more policy areas in the EPC which had a intergovernmental structure, but at the same time the role of the supranational European Commission became more prominent in this cooperation.41

What can be derived from these institutional reforms, is that a new form of making compromises was established by Giscard d'Estaing and Schmidt, the so called 'compromise by addition'. This sort of compromise can be explained as a juxtaposition of elements from the German federal model and the French intergovernmental model. So it tries combine elements from both models in order to strengthen both supranational and intergovernmental institutions

36_{H. Simonian, The Privileged Partnership, Franco-German Relations in the European Community (Oxford:}

Clarendon Press, 1985), 367.

37_{M.C.J. Jehee, J.A. de Koning and J.W Sap, De Frans-Duitse as: tiranniek of sympathiek?, Groningen:}

Wolters-Noordhoff, 1996, 14.

38_{Michèle Weinachter, ‘Valéry Giscard d’ Estaing et les institutions européennes’ in Le couple} France-Allemagne et les institutions européennes, _{ed. Marie-Thérèse Bitsch (Brussel: Bruylant, 2001), 436.}

40_{idem, 437.}

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of European governance.42 While the compromise to end the Empty Chair crisis in 1965 was an agreement to disagree, compromise by addition can be called an agreement not to disagree.

Due to the oil crisis and the fact that both Giscard d'Estaing and Schmidt were well up in economic and monetary matters, European economic and monetary coordination and integration got a more and more prominent role in the EEC. This became evident when at the French-German summit of February 1977, it was announced that the ministers of finance and economics would meet structurally four times a year.43 In addition, Schmidt proposed with the full backing of Giscard d'Estaing to set up a new monetary cooperation, the so called European Monetary System (EMS).44 This system linked the currencies of the Member States to one another, to prevent large fluctuations and reduce currency risks of European financial transactions. After a difficult start in 1978 the EMS functioned well and contributed to the economic revival in the 1980's.

Despite all these initiatives at instigation of the French-German tandem there was a general feeling of 'Eurosclerosis'. This term was coined in the 1970's and early 1980's, to describe the high unemployment rate in spite of the economic growth and the political stagnation of European integration, as no big steps forward were taken. An attempt to stop this Eurosclerosis failed due to the old supranational/intergovernmentalist divide. The German foreign minister Genscher proposed in 1981 to transfer more national powers to the EEC and to give the EP more power, in order to make the European Community more decisive.45 Noteworthy, this plan was developed together with the Italian government, it is therefore no surprise that France responded very coldly to it, also because the plan had too much supranational elements. However, what not must be forgotten, is the fact that Eurosclerosis was for a substantial part perception, 'the integration project continued; it was simply that it continued out of the public eye.'46 During the 70s the EC’s powers increased, mainly in the economic domain. The Werner Report (plan for an economic and monetary union) and the start of the EMS started a cycle of events, resulting in economic integration and ultimately the

42_{Renaud Dehousse, Andreas Maurer, Jean Nestor, Jean-Louis Quermonne and Joachim Schild, 'The}

Institutional Architecture of the European Union: A Third Franco-German Way?', Research and European

Issues 23, 2003, www.notre-europe.eu/uploads/tx_publication/Etud23-en.pdf, accessed 31 March 2014.

43_{W. Friend, The Linchpin: French-German Relations 1950-1990 (New York: Praeger, 1991), 57.} 44_{M.C.J. Jehee, J.A. de Koning and J.W Sap, De Frans-Duitse as: tiranniek of sympathiek?, Groningen:}

Wolters-Noordhoff, 1996, 15.

45_{Hans -Dietirch Genscher, 'Statement by Hans Dietrich Genscher to the European Parliament 19 November}

1981', CVCE 2012, http://www.cvce.eu/content/publication/2001/8/14/5161b54d-6d32-43cb-ac4e-51cab003d221/publishable_en.pdf, accessed 2 April 2014.

46_{Anil Awesti, 'Intergovernentalist Theory and Eurosclerosis: A Critique', Political and International Studies}

02/06, 2006, 17

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EMU. Furthermore the creation of the EPC was major step forward as well, this body was an attempt to coordinate foreign policy.

What can be concluded from the period Giscard d'Estaing/Schmidt is that roughly a decade after the Élysée Treaty was signed, the mechanisms of regularized bilateral intergovernmentalism started to pay off. The French-German bilateral summits were the place were new initiatives were planned to progress European integration. It must be said that the personal relationship between Giscard d'Estaing and Schmidt played a substantial role in this, also when we see how the two agreed on how to combat the oil crisis and economic stagnation in Europe. It was really the period in which the French-German engine developed well and paid its rewards towards European integration. Although not all problems concerning the EEC were solved, as the Genscher proposal shows, the basis for further integration was founded in this period.

Towards an economic and monetary union: the European Single Act. François Mitterrand - Helmut Kohl

France and Germany not only differed politically as the intergovernmental/supranational divide has made clear but also economically. 'Neither their traditions of economic thought, nor their economic structures, trade propensity, or relative competitiveness of various sectors, made France and Germany natural partners for European market-making policies'.47 France is a clear example of state capitalism, where the state is the central actor who organizes the cooperation between economic actors and gives direction to their economic activities. Germany by contrast is a good example of managed capitalism, where the state has more a supportive role who stimulates economic actors to operate together and gives these actors more freedom to develop their activities according to their own wishes.48 Another difference is that France's growth model is based on domestic consumption and investment, while Germany's model is based on export. Therefore France is way more mercantilist than Germany who is really in favour of free trade. When the socialist Mitterrand became president of France in 1981 it seemed that these differences became even bigger, as his policy was directed to national consumption growth and strong state intervention, by means of Keynesian stimulation policy. However, this policy was not very fruitful so that Mitterrand radically changed it, partly due the French-German economic interdependence. Mitterrand

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decided to connect his policy more with the German economic and monetary policy, which increased the economic convergence between the two countries.49 Another factor for this radical change was the fact that the neo-liberal growth model installed by the British Prime Minister Thatcher in same period, proved to be more effective. This model was completely at odds with the socialist policy of Mitterrand, while Germany conducted a policy somewhere in between these two extremes.

The election of the conservative Helmut Kohl as chancellor in October 1982 marked the beginning of a very good functioning French-German tandem, as Mitterrand and Kohl developed a warm and personal relationship. This became visible in the build up to the European Council summit in Fontainebleau in 1984. Mitterrand and Kohl had to overcome the very euro sceptical behaviour of the British prime minister Margaret Thatcher. In the year before the summit French-German contacts were intensified on all levels, in order to be united against the demands from Thatcher. 'The highly active shuttle diplomacy of Mitterrand between Paris, Bonn and London and especially the Franco-German preparations for and consultations during the summit, assured the success of it.'50 The summit provided a compromise on the enlargement with Spain and Portugal, the EEC budget and a permanent rebate for Britain. Moreover Mitterrand and Kohl succeeded in promoting Jacques Delors, a fellow Socialist Party member of Mitterrand, to the presidency of the EC.

The Fontainebleau summit made clear that France and Germany together were able to make huge progress in the European integration project. The French foreign minister Roland Dumas said ' the success of Fontainebleau was only possible thanks to a perfect agreement between Bonn and Paris. I kept to this method for the future. It served us frequently.'51

This form of leadership was used to reform the EEC which resulted in the Single European Act (SEA). This treaty made more frequent use of qualified majority voting (QMV) possible in the European Council, and thus made an end to the Luxembourg compromise. It was noteworthy that France finally joined the camp of supporters of the majority principle. Despite domestic resistance, Mitterrand stated that a larger Community needed stronger institutions, so that the concept of pooled sovereignty prevailed over the old notion of independence. 52 Another aspect of the SEA was the completion of a single European market

51_{Roland Dumas, Affaires étrangères, (Paris: Fayard, 2007), 223.}

52_{Gisela Müller-Brandeck-Bocquet, Frankreichs Europapolitik, (Wiesbaden: VS Verlag f'ür}

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in 1992 in which France and Germany were not the pacesetters but EC President Delors. This completion was the major achievement of the 1980's within the European integration project. After the SEA was ratified, the President of the EC Delors started to develop a plan to introduce a single currency and thus a European Monetary Union (EMU). This plan was ready in 1989 and will be discussed in part four which deals with the EMU.

In conclusion it can be said that this was the period in which the French-German engine made good progress. The fact that for the first time France was not governed by a government with Gaullists in it, made it possible that some old divergences between France and Germany were pushed into the background. In addition, the personal relationship between Mitterrand and Kohl together with the intensified bilateral meetings made that the European integration project got a new dynamic. It can be said that bilateral foundation for the European integration, which was laid in the Élysée treaty flourished for the first time, in all its dimensions.

Conclusion

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Changing circumstances

Although it was not exactly mentioned in the part about the emergence of the engine of the EU, the relationship between France and Germany was relatively equal during the Cold War. The relationship was characterized as "équilibre des déséquilibres", a balance of imbalances. This meant that France and Germany balanced each other with different powers. France had military, nuclear and agricultural power combined with a superior diplomatic status as it has a permanent seat in the UN Security Council, while Germany had financial and industrial power.53 During the Cold War period French-German initiatives for European integration were partly motivated by the French wish to keep the balance between the countries, as German economic power became stronger and stronger. The "équilibre des déséquilibres" lasted until 1989.

When the year 1989 started there were not much indications for change in the French-German relationship and the European integration project. France prepared for the 200th anniversary of the French Revolution, nobody expected that the year 1989 would become famous for another revolution, whose effect was as far-reaching as the one in 1789. The collapse of the Berlin Wall and the end of the Warsaw pact marked not only the beginning of a period of change for Europe, but also for the French-German bilateral relationship. The German unification and the enlargement of the EU towards the East changed the balance in the relationship. Moreover, the reform policies of Chancellor Schröder in the beginning of the 2000's sow the seeds for an increase of the economic imbalance between France and Germany. In this light it can be stated that in the post-Berlin wall era the French-German relationship started to be more unequal than it was before. Therefore this part of the thesis will investigate the influence of these changing circumstances on the functioning of the French-German tandem within the EU.

German reunification and its connection to the European monetary integration

The collapse of the Berlin Wall on 9 November 1989 immediately put the question of German reunification on the table. Only three weeks after this Chancellor Kohl presented a 10-point plan to establish a German confederation which could eventually lead to reunification. Kohl did not inform his friend President Mitterrand of France about this plan, which raised old suspicion in France. The French elites thought that Germany might again start an individual

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course.54 The fact that Germany would become by far the biggest Member State and economy of the EU and in the hart of Europe, caused some fear in France. Moreover, France expected that Germany would defend its national interests stronger then before and that Germany would care less about international partnerships, as it regained complete sovereignty. In other words France thought in 1989/1990 that German reunification would start a process through which the influence of Germany would increase in Europe at the expense of France.55 Also other European leaders had their doubts about German reunification. Most notable was the opposition to the reunification of the British Prime Minister Thatcher but also the Italian Prime Minister Andreotti warned against the revival of 'pan-Germanism', the idea to unite all German speaking people in one state. The Dutch Prime Minister Lubbers should have said that is was questionable whether Germany had the right on the basis of its history to reunify.56 Due to this suspicion, the reaction of France to a possible reunification of Germany was ambiguous. In the last months of 1989 some thought that Mitterrand was as against a reunification as Thatcher. It was even told that Mitterrand said in a joke to the American President George H.W. Bush: "I like Germany so much, I think there should be two of them", a phrase originally from François Mauriac, a French novelist. It was more complicated then that, 'Mitterrand appears to have understood intellectually that sooner or later unification had become inevitable.'57_{However typical for the French-German relationship in the months after}

the collapse of the Berlin Wall, was mutual irritation. This was possibly caused by the German incapacity to react adequately to French irritation and the French tendency to see reunification as a process with only negative effects on France.58 Examples of this were the initial hesitation of Germany to explicitly recognize the Oder/Neisse border as Eastern border of a united Germany and the visits of Mitterrand to East-Germany and Kiev, where he tried to convince the Soviet-Union leader Gorbatsjov to slow down the process of reunification. On the basis of this a Dutch journalist said that the French-German tandem did not function any longer in this period of great historical importance.59 This is perhaps a bit exaggerated as the bilateral consultations during this period continued, but it was clear that France and Germany did not upheld the image of a good functioning French-German tandem.

54_{Julius W. Friend, Unequal Partners: French-German Relations 1989-2000 (Westport: Praeger Publishers,}

2001), 21.

56_{Bart Dirks, 'Lubbers had kritiek op Duitse eenwording', De Volkskrant, 19 April 2006, accessed 24 May 2014.} 57_{Julius W. Friend, Unequal Partners: French-German Relations 1989-2000 (Westport: Praeger Publishers,}

2001), 22.

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In all fairness it has to be admitted that the developments in these months could hardly be managed by the governments of the involved countries. Even in Germany there was no real agenda or policy for reunification.60 After the first free elections in East-Germany in March 1990, it became clear that its population wanted a quick reunification as Kohl proposed. This was the moment for Mitterrand to accept a reunification in the near future. At this point Mitterrand switched his focus from delaying reunification back to the process of further European integration. Actually he linked the two phenomena to each other, reunification could not happen without further European integration. This was the only possibility of France to keep a certain influence on Germany. A linkage between reunification and further European integration exactly fitted with the ideas of Kohl. As a devoted European he stated that for him the only place for Germany was in an united Europe. He was afraid of a new "Alleingang” of Germany after the collapse of the Berlin Wall. 61

The first project on which both countries worked closely together again was the Economic and Monetary Union (EMU). Although the ideas for an EMU date from before the collapse of the Berlin Wall, it became top priority after it. Especially France was in favour of the EMU, as it could reduce the very dominant position of the D-Mark in the European economy and the French hoped to strengthen its own economic position through it. This in contrast to Germany where there was not much support for giving up the strong D-Mark, the symbol of 'das Wirtschaftswunder''. However, Kohl was strongly in favour of the EMU and he thought that this union would help to get German reunification internationally accepted. Many historians have stated, it was an open secret that French President Mitterrand was only willing to agree on a German reunification, when Germany gave up his D-mark.62 Although this claim is not completely proved it can be stated that the different French and German motives paved the way for a deal on the EMU and the creation of a European Political Union (EPU). A more integrated Europe was seen by many Member States, France in the first place, as a way to bind unified Germany. The German view on this was that they could use the fear of the other Member States, to press for advances on the road to a full-scale European Union.63 This deal would lead to the signing of the Maastricht Treaty in which the EMU and the EU were established.

In conclusion, at first sight the collapse of the Berlin Wall seemed to have provoked a break in the French-German relationship, which could have led to an European deadlock.

60_{D. Marsh, Germany and Europe, the Crisis of Unity (London: Mandarin, 1994), 25.}

61_{Dirk-Jan van Baar, "Duitsland is door de goden gekust". De Volkskrant, 5 January 2013, 35.} 62

Klaus Wirtgen, " Weg ohne Wiederkehr". der Spiegel, Oktober 1998, 25.

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However, after mutual irritations Mitterrand and Kohl set aside their differences about the German reunification and continued in a reinforced way with the process towards an EMU and an EU. So the aftermath of the revolution in 1989 is a good example of how embedded bilateralism could work. As they started a flurry of bilateral activities to solve this bilateral dissent and took a proactive presence in European integration.64 These activities consisted of reaching an agreement about the start of an intergovernmental conference on the EMU and the EPU at the same time, and on a timetable when these conferences should be concluded with a treaty.

Maastricht

The last paragraph made clear that the deepening of the European integration process was important for both France and Germany. It is therefore no surprise that the Member States decided to set up the two intergovernmental conferences, one on the EMU, which will be investigated in the next part, and one on the EPU. The last one was an explicit wish of Germany, because according to it a monetary union could not exist without a political union. In a joint letter to the Irish presidency sent on the 20th of April 1990, Mitterrand and Kohl reinforced this wish, the conference on an EPU should strengthen the democratic legitimacy of the union, render its institutions more efficient, ensure unity and coherence of the unions economic, monetary and political action and define and implement a common foreign and security policy.65 This French-German initiative did not mean that the old divide about how to develop a political union was solved. Germany, in favour of a supranational structure, wanted to increase the powers of the European Parliament and the Commission, while France supported a strengthening of the European Council. However, once again Mitterrand and Kohl were able to strike a compromise which was accepted by the others. On the one hand they wanted to strengthen the Community institutions, the EP got co-decision powers and it could vote on the appointment of the President of the Commission. Moreover the Commission and the EP extended their powers in the areas such as environment, energy and consumer protection. On the other hand Mitterrand and Kohl insisted on the crucial role of the European Council66, ‘which decides the orientations and the essential guidelines in the main fields of

65_{Letter by Helmut Kohl and François Mitterrand to the Irish Presidency of the EC 19 April 1990, Agence} Europe, http://www.ellopos.net/politics/mitterrand-kohl.htm, accessed 13 April 2014.

66_{‘The Intergovernmental Conference on Political Union’, CVCE 11 September 2012,}

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action of the Union, in particular in the area of common foreign and security policy.’67 In fact it meant that dual governance structure of the Community was maintained, on the one side supranational and on the other intergovernmental.

This institutional compromise was settled in the Maastricht Treaty signed in 1992, in which both the EMU and the European Union were established. However, the treaty was complicated because it was not really clear who had competence in which policy area, the Commission and the EP alone or together with the Member States via the Council or only the Member States. This complexity of competences is reflected in the so called pillar structure of the newly established EU. The EU consisted three pillars the European Community (EC), the Common Foreign and Security Policy (CFSP) and the Police and Judicial Cooperation in Criminal Matters (PJCC). The EC was the pillar which had a supranational governing structure in which the EP and the Commission were leading, while the CFSP and the PJCC were intergovernmental were the European Council and the Member States were leading. This structure was upheld from 1993 till 2009 when the Lisbon treaty came in to force.

Before this structure could be installed the Maastricht Treaty had to be accepted by the Member States, but the treaty was rejected by the Danish in a referendum in June 1992 and only accepted after it was changed. The French government had a struggle to get the treaty accepted by the French in a referendum held in September 1992, in the end only 51% was in favour of it.68 These two referenda marked the end of the 'permissive consensus' on European integration, which existed in most Member States, from then on euroscepticism gained importance.69 In short, the optimistic mood after the signing to the Maastricht Treaty disappeared very quickly.

Enlargement as a divisive element in the French-German relationship

Immediately after the end of the Cold War the question of enlargement came on the table again. The three neutral states, Austria, Sweden and Finland plus NATO-member Norway declared their candidacy in 1991. France was very unenthusiastic about these candidacies because it saw these states as natural partners of Germany which could disrupt the internal balance of the EU. This was even publically expressed by the French ambassador in

67_{Letter by Helmut Kohl and François Mitterrand, to the Italian Presidency of the EC, 6 December 1990, in Finn}

Laursen and Sophie Vanhoonacker ed., The Intergovernmental Conference on Political Union, Dordrecht: Nijhoff Publishers, 1990, 313-314.

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Germany, François Scheer, who stated that in the enlargement process Germany had a dominant role and he asked Germany to reconfirm its anchorage in the West.70 However, France could not really oppose this enlargement as the countries met all the accession criteria. These criteria are the so called Copenhagen criteria who require from states who want to join the EU that they preserve democratic governance and human rights, have a functioning market economy and that the fully accept the acquis communautaire which contains all the laws of the EU. As these criteria were already agreed upon in 1993 France could do nothing else than accept the three new members. Therefore the statement of the French ambassador was nothing more then an expression of the old fear of France for Germany, which was made after the EU had already accepted membership of the three countries.

The enlargement of the EU towards the East created an ever greater challenge for the French-German relationship. The French thought that ‘if Germany extends to Central Europe an economic outreach which will change into political influence, Europe as whole will eventually be unbalanced.’71 The accession of an important number of new Member States would represent a threat to the French objectives, tying in Germany and assuring a leading role for France in European Affairs.72 Germany by contrast underpinned its strong support for Eastern enlargement by a moral obligation due to the German WWII aggressions against its Eastern neighbours.73_{Furthermore it had strategic interest in stabilizing the Central and}

Eastern European countries in order to safeguard economic prosperity, as Central Europe is an important market for Germany. Due to these different attitudes towards Eastern enlargement France and Germany were long time not able to agree on a common approach to the possible new Member States. Germany had an early commitment to the Eastern enlargement while France tried to find other frameworks such as an European Confederation, in which the Central and Eastern European states became not fully members of the EU. France tried to slow down the enlargement process by making a linkage between enlargement and institutional deepening of the EU. The French parliament stated that the EU was in need of substantial reform of its institutions before it could welcome new members. Germany agreed on this reform in order to make the enlargement a success, but the enlargement was ‘the

70_{In Paris regt sich leises Mißtrauen gegen die größeren deutschen Nachbarn, Frankfurter Allgemeine Zeitung,}

16 March 1994.

71_{Valérie Guerin-Sendelbach, Frankreich und das vereinigte Deutschland, Wiesbaden: Springer VS, 1999, 181.} 72_{Ulrich Krotz and Joachim Schild, 'Shaping Europe: France, Germany, and Embedded Bilateralism from the} Élysée Treaty to Twenty-First Century Politics' (Oxford: Oxford University Press, 2013), 148.

73_{Peter Becker, Die deutsche Europapolitik und die Osterweiterung der Europäischen Union (Baden-Baden:}

Master of Arts Thesis