The Rise and Fall of Merkozy: Analysing the Role of Strategic Pre-negotiations in EU Decision-making

During the Eurozone crisis we have witnessed the emergence of special decision-making patterns in the EU. One of these is the so-called ‘Merkozy duumvirate’, which refers to the close cooperation and dominant role of Germany and France in EU crisis management. This paper analyses why Merkozy emerged and what its emergence tells us about EU decision-making. It argues that Merkozy is not a form of ‘bilateral leadership’ but a typical negotiation strategy of powerful actors to further their interests. By striking a deal with France already ahead of the multilateral negotiations, Germany increased its leverage and was able to give more weight to its preferences. Thus, Merkozy was a negotiation strategy repeatedly used by Germany, which was the most powerful actor in the management of the crisis based on its economic resources. However, strategic pre-negotiations only work as long as the preferences of the actors involved are reconcilable. Therefore, the Franco-German tandem came to a sudden end when in 2012 a new French president came into office and France lost its AAA rating. Due to these internal and external changes, French preferences were no longer reconcilable with those of Germany. The paper illustrates this theoretical argument by qualitatively analysing the shaping of the Fiscal Compact in winter 2011, and contrasting it with the events surrounding the first European Council after the French elections in June 2012. The empirical analysis uses original data from semi-structured élite interviews conducted in the German Ministry of Finance and in the Brussels-based EU institutions. The results show that pre-negotiations can be a strategic tool for powerful actors to advance their interests in EU decision-making. Their actual success, however, depends on the constellation of the actors’ underlying preferences.