Daily Archives: April 10, 2012

In domestic election campaigns European politicians display a kind of cognitive dissonance. They  must be aware that any propositions on European policy will be subject to close reading in the embassies and chancelleries of their partners, yet they tend to talk as if they will only be heard by a domestic audience. The French Presidential campaign, which officially began on Monday, is a case in point. All the major candidates have made commitments on their European policies – to renegotiate this, or abandon that – which may appeal to elements of their target market, but which will not go down well with the Chablis at the first EU summit after their election.

Should one simply classify these declarations as flights of fancy, articulated in the heat of battle, and pay little heed? Perhaps, but one cannot exclude the possibility that at election time politicians, freed from the constraints of office, may be saying what they really think or, indeed, what they think the people really think. And it just may be that they will feel the need at least to attempt to deliver on their promises.

The election takes place at a difficult moment for the European project. Previous certainties about the relentless march of the euro, and progress towards the “ever-closer union” of the Treaty have been thrown into doubt. This ought to benefit Marine Le Pen and the National Front, who want a return to the franc. Whether it would be a ‘franc fort’ or a ‘franc faible’ is not spelled out. But though the travails of the eurozone have given her a good song to sing, there are not yet enough voters prepared to sing along with the chorus.

Most of the other candidates are, ostensibly, “Good Europeans”, though this designation is capable of many interpretations in France. The centrist Francois Bayrou is the most federalist: he argues for a directly elected European President. Bayrou attracts support from many bien pensant French, particularly in the regions, but Europe is not the centrepiece of his campaign which, in any event, is treading water.

More significant, perhaps, is the rhetoric adopted by Jean-Luc Melenchon of the Left Front. He has been the big winner of the campaign so far, threatening to push Le Pen into fourth place in the frst round. If he does, there will be a price to pay by Hollande, who remans the favourite to triumph in the second, for his endorsement. Melenchon is not a deep thinker on European policy, but he has firm views on the European Central Bank, which he would like to see under political control. He sees the ECB’s single-minded pursuit of price stability as one of Europe’s major problems. Hollande is unlikely to be pushed so far, but he himself favours giving  the ECB  a dual mandate like the Federal Reserve, with priority given also to full employment – not self-evidently an absurd proposition. This would be part of the intergovernmental Treaty renegotiation, to which he is firmly committed.

He has attracted much criticism for his hostile stance on the Treaty, which many think he will quietly abandon if elected. I wonder whether they are right to dismiss the renegotiation idea as mere posturing. By the second round of the French election the Treaty will have been signed, but not ratified, and it is by no means clear that the Eurozone will survive intact with only fiscal austerity and a modest increase in support funds.

Hollande has openly questioned the continued viability of the Franco-German motor, now conveniently dubbed Merkozy. He wonders aloud whether it has recently been influenced by France at all. In saying so he reflects a view widely held in the French administration, and not just in the Socialist party. Many in Paris are deeply sceptical about the terms of the Treaty. They fear distancing themselves from the Germans, but they fear the consequences of following their hard economic line even more. The French have always wanted economic governance of the eurozone, and know that may mean going further in collectively guaranteeing member states’ borrowing, and accpeting a more interventionist role for the ECB.

Hollande was snubbed by Merkel when he visited Germany. At one point she planned to campaign for Sarkozy, though that idea was quietly shelved when polls revealed she would be a vote-loser for him. Cameron also gave Hollande the cold shoulder. They would have done better to devote time to undestanding his point of view.

Which leaves the President himself. An intriguing poll among foreign observers in Paris gives Hollande a slight edge, but the foreign press still think Sarkozy will win. So the evolution of his own European policy remains of more than academic interest.  Sarkozy has said France will cut its contribution to the EU Budget, which hints at another rerun of the British rebate debate. More importantly he has called for a Europe which “protects” its citizens. The subtext is clear: part of Europe’s response to the crisis must be to put up the barriers, to immigration and to foreign competition. The French now support measures to exclude foreign firms from public contracts if their home countries do not allow reciprocal access, and he has said that if the Schengen agreement is not revised within a year, France will leave unilaterally,

This latter commitment may not be as tough as it sounds. There is already a process of review under way, which in fact the French have been leading. But the broader aim of a protected European market, linked with a demand that France’s budget contribution should be cut back, is more menacing if the French pursue it with determination, and when they settle on a European policy, they are rarely backward in coming forward.

So whoever wins in May there is trouble ahead in Brussels, Berlin and indeed London. The Commission, with the possible exception of Michel Barnier, will not like the protectionist impulse. The Germans will strongly resist Treaty revision, or any attempt to meddle with the ECB’s mandate. And there is nothing whatsoever in the programmes of any of the serious candidates to please the British. Plus ca change, as we say in England.

A shorter version of this piece appeared in Tuesday’s FT.

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