Informal Politics, Power Asymmetries, and Franco-German Bilateralism in EMU Reforms

“Bilateral meetings of Kohl and Mitterrand, the Franco-German Economic Council, and the secret Franco-German bilaterals during the IGC operated as the inner link within the wider EMU negotiations” and were “assisted by Delors in oiling the wheels of the process” in negotiations on the Maastricht Treaty (K. Dyson/K. Featherstone, The Road to Maastricht, Oxford 1999, p. 757). This paper analyzes whether and to what extent a similar pattern of Franco-German bilateralism in close interaction with key European-level actors emerged and constituted a separate and informal level of negotiations of crucial importance for the wider negotiations on EMU reform. This links to the broader question of the importance of power asymmetries in EMU reform negotiations. The importance of power asymmetries and the emergence of such an inner core of decision-making actors in EMU reforms, including Germany and France, is considered to be a function of: a) time constraints in decision making, restricting the number of actors fully involved in the informal politics of EMU reform negotiations to a small subset of those actors participating in formal decision-making at the level of the Eurozone members or EU-28; b) the asymmetry of material resources to stabilize the Eurozone and to provide financial solidarity to distressed members of the Eurozone. Based on published work and our own research, this paper compares the cases of the creation of financial stabilization funds (EFSF and ESM), the strengthening of fiscal rules (Six Pack and fiscal compact) and the negotiations on a Banking Union in order to identify conditions conducive to an informalization of European politics and to the restriction of decision-making on EMU reforms to a core group of actors, reflecting strong power asymmetries among the members of the Eurozone.