Download publication

Policy Contribution

Rethinking Franco-German relations: a historical perspective

Franco-German relations as the ‘engine’ of European integration are widely perceived to have stalled in recent years. This policy contribution assesses what the Franco-German relationship can achieve, what its shortcomings are, and what it means for the wider governance of the euro area and the European Union.

By: Date: November 7, 2017 Topic: European Macroeconomics & Governance

Franco-German relations as the ‘engine’ of European integration are widely perceived to have stalled in recent years. German economic and political strength, coupled with relative French economic and political weakness, help to explain this situation.

The re-election of Angela Merkel and the election of Emmanuel Macron in 2017 created a new potential basis for a strong, like-minded Franco-German alliance that would be able to agree on substantial policy issues. It is therefore a good time to assess what the Franco-German relationship can achieve, what its shortcomings are, and what it means for the wider governance of the euro area and the European Union.

An examination of some of the past major Franco-German agreements reveals a more complex picture than is usually recorded. The Schuman Plan (1950), the European Monetary System (1979) and the Maastricht Treaty (1992) left their mark as European integration milestones, but were also one-sided or incomplete policy agreements.

The future Franco-German relationship faces three issues that European policymakers should bear in mind 2017: (a) notwithstanding the new dynamics of the twenty-first century, a Franco-German agreement remains a critical and symbolic step necessary for reaching an EU agreement; (b) past Franco-German bargains were often one-sided and incomplete, and could not provide a definitive response to European challenges; (c) most of these agreements also involved critical input from other EU members, and suggest that the Franco-German tandem alone cannot lead the EU27 in the twenty-first century.

View comments
Read article More on this topic

Blog Post

Do wide-reaching reform programmes foster growth?

With growth gathering momentum in the eurozone, some have claimed this is the proof that structural reforms implemented during the crisis are working, re-opening the long-standing debate on the extent to which reforms contribute to fostering long-term growth. This column employs a novel empirical approach – a modified version of the Synthetic Control Method – to estimate the impact of large reform waves implemented in the past 40 years worldwide.

By: Alessio Terzi and Pasquale Marco Marrazzo Topic: European Macroeconomics & Governance Date: March 28, 2018
Read article More on this topic

External Publication

Europe in a new world order

The EU is a relatively open economy and has benefited from the multilateral system. We argue that the EU should defend its strategic interests. The Singapore ruling has offered a useful clarification on trade policy. Addressing internal imbalances would also increase external credibility. Finally, strengthening Europe's social model would provide a counter-model to protectionist temptations.

By: Maria Demertzis, Guntram B. Wolff and André Sapir Topic: European Macroeconomics & Governance Date: March 26, 2018
Read about event More on this topic

Past Event

Past Event

Could uncertainty derail the European recovery?

It is a contradictory time for Europe. The economy is recovering but the political climate is uncertain. There is excitement about common projects but also rifts and increasing nationalism and populism.

Speakers: Franco Bruni, Maria Demertzis, Zsolt Darvas and Marietje Schaake Topic: European Macroeconomics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 22, 2018
Read article More on this topic More by this author

Blog Post

Which sectors would be most vulnerable to EU-US trade war?

As the US administration imposes new tariffs on steel and aluminium and considers further protectionist measures, we look at bilateral trade flows between the US and the EU28 across different types of products.

By: Francesco Chiacchio Topic: Global Economics & Governance Date: March 15, 2018
Read article More on this topic

Blog Post

Still on the road? Assessing Trump’s threat to European cars

Just how exposed is Europe’s automotive sector to a potential escalation in the EU-US trade war?

By: Gustav Fredriksson, Alexander Roth and Simone Tagliapietra Topic: Global Economics & Governance Date: March 13, 2018
Read article More on this topic More by this author

Blog Post

U.S. steel and aluminium tariffs: how should the EU respond?

President Trump and his trade team are set on a path of protectionism and economic nationalism. Trump’s intended measure raises four issues for the EU: the effect on European industry; how to deter Trump’s broader protectionist thrust; how to use the WTO Dispute System in this case; and, how to prepare for the contingency of a post-WTO or truncated-WTO world.

By: Uri Dadush Topic: Global Economics & Governance Date: March 9, 2018
Read article

Blog Post

Breaking the Stalemate on European Deposit Insurance

Many EU-level reports have highlighted a European Deposit Insurance Scheme (EDIS) as a necessary component of banking union, but none of these options has met sufficient consensus among euro-area countries. The authors of this blog propose to end the deadlock with an EDIS design that is institutionally integrated but financed in a way that is differentiated across countries.

By: Isabel Schnabel and Nicolas Véron Topic: European Macroeconomics & Governance, Finance & Financial Regulation Date: March 5, 2018
Read article More on this topic More by this author

Blog Post

Getting accustomed to Brexit - UK and the customs union scenario

The Labour Party’s support of customs union membership has the potential to change the course of Brexit, with 13 months left to close negotiations. This week we review the commentary around the possibility of a post-Brexit EU-UK Customs Union.

By: Inês Goncalves Raposo Topic: European Macroeconomics & Governance Date: March 5, 2018
Read article More on this topic More by this author

Podcast

Podcast

Euro-area governance: Where next?

Bruegel deputy director Maria Demertzis hosts this episode of 'The Sound of Economics', with Gideon Rachman, chief foreign affairs correspondent at the Financial Times, and Manfred Weber, chair of the EPP Group in the European Parliament, joining Bruegel director Guntram Wolff for a discussion of the future of euro-area governance.

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: March 1, 2018
Read article More on this topic More by this author

Blog Post

Clouds are forming over Italy’s elections

While the prospect of a gridlock reassured investors about the short-term risk of an anti-establishment government, Italy still needs a profound economic shake-up and is in no position to afford months or years of dormant governments.

By: Alessio Terzi Topic: European Macroeconomics & Governance Date: February 28, 2018
Read article More on this topic

Blog Post

Why a good Brexit outcome matters (and it’s not just the economy, stupid!)

Uncertainty still reigns over the future shape of the EU-UK relationship, as Brexit negotiations rumble on. Though the two parties are parting ways, a more cooperative approach from both would greatly improve the longer-term economic and political prospects for all concerned

By: Maria Demertzis and Nicola Viegi Topic: European Macroeconomics & Governance Date: February 22, 2018
Read article Download PDF More on this topic

Policy Contribution

The Western Balkans on the road to the European Union

Given its geographical location, the region is important to the EU in terms of security, stability, trade and transit routes. The Western Balkan countries’ economic and political prospects and their future within a European framework should remain one of the top priorities for the EU.

By: Marek Dabrowski and Yana Myachenkova Topic: European Macroeconomics & Governance Date: February 22, 2018
Load more posts