Since the outbreak of the eurozone crisis, fiscally conservative countries (“creditor states”) have largely relied on Germany when it came to the governance and reform of the Economic and Monetary Union (EMU). Yet, in recent times Germany has been weakened domestically, and a more assertive France under President Macron demands more risk-sharing in EMU. How do smaller “creditor states” react to this challenge? Drawing on hegemonic stability theory, the paper argues that free-riding on Germany’s quasi-hegemony has become less rewarding for these states. Therefore, they build new alliances to voice their preferences, such as the recently formed “New Hanseatic League”. Based on semi-structured interviews conducted with high-ranking officials in the EU institutions and Permanent Representations in Brussels, the paper shows that the divide between “creditor states” and “debtor states” is no longer sufficient to describe the preference constellation in EMU. Instead, issue-specific subgroups have emerged, putting forward diverging views on the need for further integration against the background of differing national banking systems, Brexit and the retreat of the US as reliable partner for Europe. In conclusion, the paper discusses the extent to which the recalibrated role of smaller states will influence future EMU reform including the pending completion of the Banking Union’s “third pillar”.
