The Rise and Fall of Merkozy: Franco†German Bilateralism as a Negotiation Strategy in Eurozone Crisis Management

The close co†operation between French President Sarkozy and German Chancellor Merkel (‘Merkozy’) dominated a significant part of eurozone crisis management. Yet, after the election of a new French government in 2012, the Franco†German co†operation in the Economic and Monetary Union deteriorated. This article asks why the Franco†German tandem got stuck. Drawing on bargaining theory, it argues that Germany used ‘Merkozy’ as a negotiation strategy to further its aims in eurozone crisis management. However, when the preferences of the two countries were no longer reconcilable due to changes in France as well as in the negotiation environment, the strategy failed. Thus, while much of the literature has focused on the persistence of the Franco†German partnership, this approach accounts for variation in its functioning. The results provide an explanation for the rise and fall of Merkozy and bear implications for assessing the future Franco†German relationship.