‘Special circumstances require special measures’: Why and how Germany promoted an EU recovery fund

Why did the German government advocate a comprehensive European financial response to the corona pandemic involving common debt and direct fiscal transfers between member states? Why and how did it come together with France to propose, and ultimately enforce, an EU recovery fund? This paper develops and tests a causal mechanism linking the shock of the corona pandemic in Europe in March 2020 to member states’ agreement on the seminal corona budgetary package four months later. It shows how Germany first reassessed its national material interests to then realign its bargaining positions, striving for broader compromises both with France and at the EU level. Distinguishing between longer-term, fundamental preferences (interests) and short-term, strategic preferences (positions), the paper advances the scholarly debate on the nature and manifestations of national preferences in the EU, especially during moments of deep crisis.