European Affairs

In the meantime, of course, the Common Market had been hard at work. A customs union was introduced, as was the Common Agricultural Policy, which greatly benefited farmers, especially in France. European integration had its supporters, mainly among Christian Democrats and Social Democrats. But it was viewed as a threat by most members of the Gaullist party, then in power, and it was opposed by the Communist Party, which regularly won around 25 percent of the votes in national elections. The French were widely ignorant of proceedings in Brussels, except for the agricultural “marathons,” dramatic all-night negotiations over the price of milk or other farm products.

Will something similar happen after the French No to the European constitutional treaty in the referendum of May 29? Will France’s old insular instincts reassert themselves? Any nation, of course, can be tempted to think that it does not need to bother with the rest of the world, and in Europe old rivalries have not totally disappeared. It is obvious that the British, for instance, are not unanimously convinced, to say the least, that they need to work in concert with the French and the Germans, not to mention the Spaniards, to keep their economy going and to protect themselves against such dangers as Muslim fundamentalism. The same could be said of the Italians.

In France, the idea had prevailed over the last ten or 15 years that the country had finally reached a broad consensus that the construction of a unified – or at least united – Europe was in the French national interest. The rejection of the European constitution dealt a serious blow to that assumption. A majority of voters obviously felt that further progress along the path to European unity would be contrary to French interests. But the reversal of what had seemed to be the national consensus on Europe has not so far caused public debate to narrow its focus and concentrate on strictly domestic matters. On the contrary, the outcome of the referendum has triggered an unprecedented degree of soul-searching about what it means for France to have halted the process of European integration.

The French realize that domestic issues have become intertwined with European policies. Hence the discussion about how far the so-called French social model can be kept alive in a European framework dominated by the “Anglo-Saxon” model of free markets and open competition. After the vote, there was no doubt that the new cabinet appointed by President Jacques Chirac, with former Foreign and Interior Minister Dominique de Villepin as Prime Minister, would have to cater to the feelings of the No voters, who were after all in the majority. From the start, however, there were differences between “reformers” and “realists,” both inside the cabinet and among the deputies of the Union for a Popular Majority (UMP), which supports the government in the National Assembly.

Mr. Chirac was obliged to enlist the help of the popular Nicolas Sarkozy, who came back to office as Interior Minister and number two in the government. Six months earlier, Mr. Chirac had forced Mr. Sarkozy out of the government after Mr. Sarkozy was elected leader of the UMP. Mr. Chirac rightly calculated that if the leader of the Parliamentary majority was also a member of the cabinet, “there would not be a Prime Minister any more.” Mr. Chirac also wanted to weaken Mr. Sarkozy’s position in the run-up to the Presidential elections due in 2007, in which Mr. Chirac favors the rival candidacy of Mr. de Villepin. Nevertheless, after the humiliation of the referendum, which Mr. Chirac had called in the expectation of a resounding “Yes,” he had no choice but to circle the wagons and make Mr. Sarkozy an offer he could not refuse.

As co-leader of the government, the reformist Mr. Sarkozy has taken the position that the French model is not working and needs radical change. The realist Mr. de Villepin, on the other hand, maintains that the model should be fixed in order to preserve it, and that there is no need to switch to another one.

The French model is partly based upon a farm sector that is still culturally significant, if economically marginal. Soon after the May 29 vote (and the rejection of the constitution by the Dutch three days later), EU leaders met to discuss their budgetary program for the years 2007-2013. While British Prime Minister Tony Blair chose to center the budgetary discussion on agricultural subsides, Mr. Chirac responded by targeting the annual British “rebate” from the EU budget, negotiated by then Prime Minister Margaret Thatcher in 1984 to compensate Britain for its high net contribution to the common finances.

Mr. Blair argued that the rejection of the constitution in two of its founder members provided further proof of the need for fundamental change in the European Union. He echoed traditional British criticism of the Common Agricultural Policy, from which Britain benefits relatively little, and argued that the Union should reduce its funding of declining activities such as farming and look to the future by allocating much more money to technological research and development. Rightly or wrongly, many saw the heated exchanges between Mr. Chirac and Mr. Blair at an EU summit meeting in Brussels in June as confirming that a major clash was under way between competing French and British visions of how the European Union should be organized.

Traditional French certitudes were further upset in November, when the 25 member states had to define the position that Peter Mandelson, the EU Trade Commissioner, would defend in the attempt to revive the Doha round of multilateral trade negotiations. Farm subsidies and tariffs on agricultural imports, which protect European producers against outside competition, were again the main issues. The French government accused Mr. Mandelson of making offers that went beyond the mandate he had received from the EU Council of Ministers. The incident once again caused the French to wonder whether Europe’s purpose is to replace insufficient national protections and shelter them more efficiently against the winds of globalization. Or is it to get rid of those national protections and force them to undergo an economic revolution driven by free trade and harsh competition?

On the conservative side, some French leaders have made proposals aimed at re-launching the European process. Some have unearthed the old idea of a “hard core” of nations that would be willing to progress toward a more integrated Europe by further coordinating their policies, without waiting for the rest to follow. Borrowing a term from Mr. Chirac, Foreign Minister Philippe Douste-Blazy called this a “vanguard” of countries, although he did not name any for fear of causing problems with those excluded. Mr. de Villepin proposed that meetings of ministers of the twelve member countries of the euro (the Eurogroup) should become an “economic government” that would define the fiscal policies of the euro zone and exercise greater influence over the monetary stance adopted by the European Central Bank. Mr. Sarkozy floated a quite different idea, reminiscent of the European directoire privately proposed by de Gaulle in the closing years of his presidency in the late 1960s. Mr. Sarkozy suggested that the six biggest member states – Germany, Britain, France, Italy, Spain and Poland – should form a top-level steering group to manage the whole 25-nation Union.

Beyond these unimaginative and probably unrealistic suggestions for getting the European process back on track, however, the outstanding problem has become the issue of whether France should be modernized within European guidelines. Will Mr. de Villepin and Finance Minister Thierry Breton – former head of France Telecom, the largely privatized telephone giant – respect European deficit limits in drawing up the French budget for 2006? Will they authorize Electricité de France, the state-owned power utility, to offer shares to investors on the stock exchange? The answer to the second question has been a frank Yes, while the response to the first is still unclear. The budget that the government has proposed to Parliament is based on economic projections that many experts consider to be outrageously optimistic.

The liberalization of the labor market is another topic of national debate with a European dimension. For anti-Europeans in France, the free circulation of people and goods means that French workers must compete with their counterparts in lower-income countries, such as Spain or Portugal in the past and Poland or Hungary today. They resent the fact that EU rules do not impose French labor standards and tax requirements on everyone else. Advocates of greater flexibility – such as Laurence Parisot, the first woman president of Medef, the organization that represents corporate business – explain that less rigid rules would help the 10 percent of the work force that is unemployed. If employers could more easily adjust their staff to business conditions, and lay off workers when demand fell, they would hire more people in times of expansion.

At the left end of the political spectrum, the debate over Europe is tougher than on the right. Conservative parties may diverge on the admission of Turkey to the European Union, but they largely supported the constitutional treaty. Only the far right opposed it. The left-wing parties, by contrast, are deeply divided over Europe. In fact, it has been said that Mr. Chirac decided to hold a referendum on the constitution, rather than submit it to Parliament for ratification, because he expected that it would exacerbate these divisions and damage the left’s prospects in the 2007 presidential election. The Socialist Party has tried to minimize the extent of its split on Europe, but the reality is that a good number of its members and supporters have become convinced that EU regulations will dismantle the hard-won protections gained by French workers through decades of labor strife and socialist reforms.

The violent uprising in the suburbs in November, and the spotlight it shone on the problems of integrating hundreds of thousands of young citizens of Arab and African descent, who suffer silent segregation in housing, in education and on the labor market, has been another dramatic development forcing the French to reconsider their much cherished social model – and perhaps to seek inspiration from other European countries. As Trevor Phillips, chairman of the British Commission for Racial Equality put it in Le Monde, “we must find a model that would enable all people in the European space to live together and not only side by side.” With all this going on, the French may be realizing that they cannot afford not to think European.

 Patrick Jarreau is deputy editor of the French daily newspaper, Le Monde. He was previously the newspaper’s Washington Bureau Chief.

This article was published in European Affairs: Volume number 6, Issue number 4 in the Fall of 2005.