LEADERSHIP IN HARD TIMES Germany, France, and the Management of the Eurozone Crisis 1 Joachim Schild Political Science, Universität Trier A BSTRACT France and Germany played a highly visible leadership role during the management of the Euro crisis and the efforts to design a reform gover- nance framework for the Euro area. This article provides a conceptualiza- tion of this bilateral leadership, which is then applied to trace the process of Franco-German leadership during the ongoing crisis of the Euro area. Franco-German leadership grew ever more important as the crisis deep- ened. After the French presidential election of 2012, however, the diver- gences between the two core states of the Euro area deepened and made the exercise of joint leadership more difficult to achieve. I consider this leader- ship role to be based on a compromise by proxy logic in which France and Germany, starting from divergent positions, strike bilateral compromises acceptable to other member states that feel their own interests are repre- sented by either France or Germany. Their common capacity to find suit- able remedies to cope with crisis, however, is not beyond doubt. The Franco-German approach followed an additive logic, combining the tempo- rary and permanent financial support schemes—a French preference—with a concomitant strengthening of fiscal rules advocated by Germany. In the end, the two governments did not develop a common comprehensive strat- egy based on a shared conceptual framework. K EYWORDS France; Germany; Franco-German bilateralism; leadership; Euro area; Euro crisis. Introduction Since the spring of 2010, the EU and its member states have faced the risk of seeing the Economic and Monetary Union (EMU) break apart, triggering German Politics and Society, Issue 106 Vol. 31, No. 1 Spring 2013 doi:10.3167/gps.2013.310103