Franco-German Initiatives and the Next Phase of European Construction


It is clear that for President Macron and for Chancellor Merkel that a new impulse needs to be generated for European construction.

And they clearly are working together to do this.

Whether this an engine driving effective change for the entire European Union is a different matter; for different initiatives are in play whether from the UK, Northern Europe, or Eastern Europe.

In the past two weeks, we have seen initiatives proposed in two key areas: Euro zone economic development and enhanced Franco-German defense cooperation.

At the Eurogroup Meeting held on November 19th, the German and French Finance Ministers announced a new Eurozone plan.

The plan is the next step from the Meseberg declaration of June and is two pages in length.

The plan combines two impulses – the French impulse to have a budget for the entire eurozone by 2021 with an German impulse that such an effort would be linked directly with the EU’s annual financial framework (MFF) which would ensure that it would be a controllable initiative.

The Eurozone Budget would be part of the EU budget.

This would ensure that it is in coherence with overall EU policies and satisfies budgetary principles and requirements in terms of sound financial management, budgetary control and parliamentary accountability.

The Eurozone budget would primarily be financed by external assigned revenues, possibly including the allocation of tax revenues (such as an FTT according to the French model) and European resources (such as the proposed reform delivery tool).

The assigned revenues would consist of regular contributions by Eurozone Member States, collected and transferred to the EU budget on the basis of an intergovernmental agreement (IGA).

Contracting parties of the IGA would be the Eurozone Member States.

The IGA would provide for a methodology to determine the contributions by each Eurozone Member State and a binding maximum amount. It will provide for a decision procedure on the funding priorities of the Eurozone Budget


And in the defense field, the French and German governments are moving forward on pooing resources for a new fighter initiative.

The fighter project is called the Future Combat Air System and is designed to field a fighter in the 2040s.

The French Defense Minister meeting with her German counterpart have agreed to launch funding next year for the new combat air project.

Meeting in Brussels where both attended the EU Council ministerial meeting, Parly said she had agreed with her German counterpart Ursula von der Leyen to award two separate contracts for technology demonstrator programs for the new fighter and its engine in mid-2019, at the Paris Air Show in June.

The two nations’ armaments directors also attended the meeting, which according to an official on Parly’s staff “was a useful clarification of the status of the project, and a concrete step forward.”

These contracts will be the first time the two countries have invested any meaningful funds in their future fighter since the project was unexpectedly announced in July 2017 by French President Emmanuel Macron and German Chancellor Angela Merkel.

We will write more about this initiative based in part on participation at the recent International Fighter Conference 2018 held in Berlin, where it was clear that the French and German air forces were working on shaping common perspectives on the way ahead as well as preparing for the two governments to fund joint development next year.

And it is anticipated that Spain will join the FCAS project next year as well.

In short, the French and German governments are shaping some common initiatives to reshape the European landscape.

Yet there are clear challenges to such efforts, whether from within the two nations or in the broader European and global context.

With regard to the Eurozone initiative, one European analyst of this initiative argues that the effort may be unable to succeed given the domestic situations in France and Germany as well as within the Eurozone overall.

As Robert Steenland concludes with regard to the new Eurozone initiative:

With both president Macron and chancellor Merkel losing support domestically, it is questionable whether their plans will succeed. 

Even more, given the opposition by the Hanseatic states, the upcoming European elections and Italy’s political hooliganism. 

Even if some compromise would be reached, it would be too watered down to make a difference in case of a serious economic recession or crisis.

Therefore, the eurozone and EU will face serious political and economic risks that will continue to affect it for a long time to come.


The featured graphic is credited to the following source: