The Collapse Of Europe

France faces a major turning point this weekend as the last few frantic days of campaigning for the EU Constitution has Chirac going on French television to literally beg the French people not to reject the document in Sunday’s referendum. However, as the old jokes always go, France and defeat just go together. The chances of the EU referendum passing seem increasingly slim.

Not only will the EU referendum fail, but there’s a good chance that it will take Chirac’s government down with it.

The Long Decline Of Jacques Chirac

Chirac’s Gaullist government is under seige from all sides. A recent survey by L’Express showed Chirac’s popularity declining to the lowest point in 8 years. Only 39% of the French people approve of Chirac’s performance in office, a dangerously low figure for any politician. Prime Minister Jean-Pierre Raffarin fares even worse – only 28% of the French people approve of his performance.

The reasons for this tide of outrage aren’t hard to figure out. The French economy is going down the tubes. The rate of unemployment is currently 10.2% – nearly double the rate of unemployment in the United States or Britain. The French economy is barely able to keep up. The OECD recently downgraded estimates of French GDP growth to a paltry 1.4%, while the French government insists on 2-2.5% growth. French GDP growth is well below the Eurozone average of 3% and much lower than the US’s strong economic growth of 3.5%. The gap between US economic growth and the more sluggish EU economy has helped push the value of the dollar higher on the world markets.

Politically, this is exceptionally bad news for Chirac. He’s (rightly) taking the blame for France’s double-digit unemployment and weak economic growth and the same forces that have caused German Chancellor Gerhardt Shroeder to call for new elections are bearing down on Chirac.

The more Chirac and Raffarin campaign for the EU Constitution, the less popular it becomes. So much so that Chirac’s address last night begged the French people not to make the vote on Sunday be an address on his leadership.

Les Anglo-Saxons

The coalition against the EU Constitution represents a wide swath of French society. Everyone from far-left activist Jose Bove to far-right ultranationalist Jean-Marie Le Pen and a significant number of Chirac’s own party are against the ratification of the EU Constitution. Recent polling have shown over 50% are against the EU referendum, and the remaining undecideds are breaking into the “non” camp.

The fact that the French government mailed away free copies of the EU Constitution didn’t help much – when the French electorate got a copy of the 450-page unreadable monstrosity, it only highlighted the fact that it’s a document rife with contradictions, unworkable promises, and language that only a lawyer could even begin to comprehend. Compared to the relative simplicity of the US Constitution, the proposed EU Constitution os a nightmare.

It isn’t just an issue of Chirac’s waning popularity, but the French national spirit itself. Many in France fear that the EU will destroy their vision of l’exception culturel that in their mind makes France different from other countries. The far-left fears that the “Anglo-Saxon” influences of the EU will destroy France’s socialist welfare state. as one observer writes:

The main point of debate that I’ve heard is whether or not the EU constitution will defend the French social model or replace it with an “ultra-liberale” Anglo-Saxon version. “Liberal” being almost an insult in France. Both camps claim to be defending the French model and – l’exception culturel – but both can’t be correct. As an acquaintance put it, Jose Bove and Le Pen say vote no, I vote yes – Hollade and Chirac say vote yes, I vote no. What shall I do? Stay at home.

France has largely turned its back on the free market, at least ideologically, which probably explains why French economic growth is so pitifully anemic. The largest French trade union, the Confédération Générale du Travail (CGT) represents an unelected branch of the French government who can effectively veto legislation through strikes and work stoppages. The French economy is shackled by a culture that places more and more demands on the welfare state while simultaneously taking efforts that but a major damper on economic productivity and growth. It’s an unworkable concept that will only become more so as time goes on.

The Beginning Of The End

The opposition to the EU referendum is a sign of the turmoil lurking just under the surface of French society. The French are facing the tension between the glorific vision the French people have for their country and the reality of a country on the decline. The banlieues of Paris are becoming more and more like Fallujah-sur-Seine as unchecked Muslim immigration creates an angry underclass. (For more on this, see The Balkanization of France)

Meanwhile, the far left is attacking the very “liberal” economics that would offer the French a way out of their economic malaise. It took a major work stoppage across England that paralyzed the country before Margaret Thatcher was able to set the British economy on its current course of strength. Sadly, it seems as though there’s little hope of something similar happening in France. If anything, the prevailing social sentiment would likely push France in the opposite direction – towards increasing socialism.

With the left gaining steam in Germany as well, a fully socialist Franco-German axis would be enough to take the entire Eurozone down with it. Countries like Britain which have so far avoided full integration into the Eurozone would feel the effects – countries like Greece and Italy that are already economically vulnerable could very well be plunged into depression.

The problem is that it’s irrelevant what the French electorate decides. If the pro-EU camp wins the bureaucratic monstrosity that is the European Union will continue to consume more and more power, only delaying the point at which it becomes too cumbersome to function. If the EU loses, the collapse may come sooner. One can only hope that a French non will give some impetus to reform in the EU, but experience tells us that the chances of that happening are slim to none.

In an increasingly connected world, an EU on the brink will hurt the rest of the economy. The US is essentially like Atlas – holding the world on its shoulders with its strong economy. However, that isn’t a position that can be maintained over the long term. A European depression would make the Asian market panic of 1996 seem like nothing. The effects of such an outcome would be felt in Chicago and New York as well as Paris and Berlin.

A federal Europe isn’t a bad idea, so long as its done in the right way. The EU is not the right way, and as much as it pains me to stand with Bove and Le Pen, it should be rejected by the French electorate. However, even if they’re doing the right thing, it’s for the wrong reasons, and either way things will get much worse before they get better. Even a defeat like this one may not be enough to prevent the EU from following its current dangerous path.

3 thoughts on “The Collapse Of Europe

  1. Another excellent post, Jay. I am coming to depend on you for this type of analysis. I don’t know what your background is, but it’s clear you pay attention and you know how to make your points and observations without bogging down (which probably means you’re not from academia). Keep up the good work, please!

    Interesting, isn’t it, that Chirac and Schroeder are probably on their way out and Putin is hanging on for dear life – while George Bush gets re-elected? And why do those “backward” Iraqis that couldn’t be expected to deal with the complexities of democracy appear to ahve a better handle on drafting a Constitution than the Euros?

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