[update below]
Pascal Riché has an important article in Rue89 on the growing debate in France over quitting the euro and the arguments for and against, and which he advises people to familiarize themselves with—”Entraînez-vous au débat qui déchirera vos dîners dans quelques semaines” he says—, as the debate will no doubt rise to a fever pitch during the election campaign for the European Parliament (May 25th in France). Riché notes that, until recently, most French critics of the ECB’s monetary policy and the SGP nonetheless argued that the euro was a net plus for France and that exiting from it was unthinkable. The only ones arguing otherwise—that France should and must quit the euro—have been the Front National, souverainistes like Nicolas Dupont-Aignan, extreme left groupuscules, and a handful of economists (the usual suspects on this subject, e.g. Jean-Jacques Rosa, Jacques Sapir). But Riché now observes that the arguments for leaving the euro are going mainstream, noting in particular the revirement on the question by the high-profile Keynesian economist Bernard Maris, an irreducible partisan of Europe—he voted ‘oui’ in both the TEU and ECT referendums—, but who has regretfully come to the conclusion that France has no hope of increasing economic growth and lowering unemployment so long as it remains in the single currency dominated as it by Germany. I was indeed surprised to hear Maris—of whom I am a fan—make this argument last Friday in his weekly debate on France Inter with the libéral/free-market economics journalist Dominique Seux, and equally surprised to hear Seux’s tepid counter-argument, in which he conceded many of Maris’s points (listen here). And this morning on France Inter I listened to invited guest Nicolas Dupont-Aignan, who argued for six minutes straight why the euro has been disastrous for the French economy and that the only salvation for France is to exit from it. Some of Dupont-Aignan’s points were exaggerated or simplistic but he is exceptionally well-spoken and his argumentation is coherent (listen here); and it will certainly be convincing to many citizens who are otherwise not right-wing Eurosceptics or nostalgics for a Gaullist golden age.
IMHO the arguments for staying in the euro are still stronger than those for leaving—the consequences of which could indeed be calamitous—but my convictions on this are becoming shaky. It is, however, clear that the single currency was an error—and that having it run according to German conditions was a double error. I cannot imagine for a second that President Hollande or any of his credible successors would ever make such a fateful decision to leave the euro. But if the euro remains overvalued and France continues to privilege deficit reduction over economic growth, then the economic and social situation in this country is going to get worse, and with political and social consequences one can only imagine.
À suivre.
UPDATE: French News Online informs me—in the comments below—that they had a story back on Feb. 7th on how “The French want out of the euro.” In other words, FNO scooped me and by a long shot. J’en prends acte.
My opening statement for the forthcoming “dîner déchirant” is as follows :
” Why can’t we accept the simple idea that the germans are willing and able to run Europe including France much better than we do ? They have plenty of well trained senior officials, it is a working democracy, they have a federal culture. They love France. Always have. They learn french must faster than we learn german. For Transparency Intl. Germany is far less corrupt (12 th position) than France (22nd position !). Let them handle us, the euro, all the big scary reforms and the whole social schmeer, they are good at that. Why still bother with such an old dumb retro cliché such as “souveraineté nationale” ( souveraineté of what, from what ?).
Let’s take care of local simpler minor matters, let’s become the happiest europeans, make good french wine, superior olive oil, bio foie gras and superb cheeses, trim our beautiful landscapes, be more welcoming to foreigners, and you know lets just leave manufacturing cars and balancing the accounts to the germans. They’ll take good care of us, it is in their own interest.”
Massilian: À moins que je me trompe, je trouve votre commentaire un peu second degré… 🙂
Thanks for this post. I still have to look at your links in depth, but I fear the debate is already ill-posed as “do we stay or do we go?” The better terms are “within the eurozone, how do we use our significant but underestimated power and influence to reorient monetary and macro-financial policy in a more ideologically acceptable direction?” I made that a mouthful in order to be precise, but I’m sure there’s a pithier way to put it. The option of outright leaving would make much more sense if either a) one got the feeling that competing factions of French ruling elites had actually already tried everything they could within the eurozone, or b) “leaving” is a canny strategic position to be deployed against other blocs within the eurozone, be they centered in Brussels, Frankfurt, or Berlin.
As I said above, I do not believe for a second that a French president – the current one or his successors – will make the fateful decision to leave the euro. But that mainstream economists and others are now advocating this is significant. And the debate is necessary, as a decisive shift in elite opinion on this could prompt France, along with other Eurozone members, to push for a revision of the TEU and change in the mandate of the ECB. Maybe not now but in the coming years.
On leaving the euro, George Soros has argued (here) that if any country is to do this, it should be Germany.
I think part of the problem is that the constitutional treaty debate and the 1992 referendum have conditioned many French politicians and journalists (and those within other member states) to view European integration politics in terms of yes/no, and thus almost ineluctably in terms of “keep the faith” vs “this project is inherently damned.” However, what the euro crisis has actually pragmatically called for is more public debate about what interests and political visions should served by what particular types of integration, and what current institutions within the EU are *choosing*, not *destined* to do. Reform and changing policy course is not only about foundational reform of treaties.
In addition, framing it as “will France leave the euro” is also — as you say — naive or willfully misleading. As Soros has shown, it’s more likely that Germany would decide to leave first or feel pushed to leave in reaction to other member states’ actions. Or more much more likely, no member state will actually decide that it’s worth it to undertake the very complicated technical and legal task of leaving, especially those states with the largest, most transnational banks.
In January and earlier than anyone else Marianne magazine (edition No 876) raised this in a long cover story. It has also kept a mini-series running on the theme. Marianne criticises the “failure of mainstream politicians” to debate the issue of the Euro and says the time has come to find other solutions to a crisis that is destroying Europe’s future generations and threatening 70 years of peace. It quotes an Ipsos poll as saying one in three French citizens favour FRexit. There is also a Jan 30 blog by Jacques Sapir warning the euro as presently constituted and managed poses a threat to Western democracies: http://bit.ly/P5AWWH. (Without wishing to abuse your hospitality may I mention our long Feb 7 report on the Marianne piece: “The French Want Out Of The Euro”?)
Arun, thanks very much for the update. It was actually Marianne that scooped Rue89 and everyone else! The only reason for drawing it to your attention was to broaden the base of the debate which Marianne suggested political elites preferred to ignore despite the evidence of polls and arguments of economists. As you note once firm convictions surrounding ongoing eurozone survival do seem now, to look less certain.
I missed the scoop because I do not habitually read Marianne, which I have long considered to be a trashy rag, even though it does occasionally have worthwhile articles. I’ll make a point to check its website more often.
Arun, a little second degré was possible of course, but not more. I loathe economists. I have no trust nor respect for their analysis (opinions would be more accurate). There is no science there. Inflated egos and plenty of hermetic maths. (B. Maris as well as the rest of the bunch, including the économistes attérés…). I believe I have a better understanding of where and how to find a bozon de Higgs then wether the euro is good or bad for me when I listen to whoever calls himself an economist (left or right combined). I am worn out by the french politics and desperate with the EU elections ahead. I sincerely wish the germans would take care of all these matters for us, I am ashamed by the unworthy level of the french politicians in charge of this country – or those in the opposition. (How can we suddenly look at Borloo as if he was some kind of french Dalai Lama just because he said he had to take some rest….)
What will come next after the A. Morelle story ? And on, and on, and on.
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