By Gideon Rachman
The battle for France has a couple of weeks to run. After that, the battle
for Europe will begin. Both Nicolas Sarkozy and his challenger in the French
presidential election, François Hollande, are promising to save the “French
exception” by radically changing the direction of the European Union.
Most of France’s European partners are inclined to dismiss the two candidates’
rhetoric as cynical sloganeering, as they gear up for the final round of voting
on May 6. It is assumed that, at the conference table in Brussels, France will
be “reasonable”. But that is complacent. In Sunday’s first round of voting, the
far right and far left scooped up about one-third of the votes. This election
has already revealed a deep French anxiety about globalisation, austerity and
national identity to which all the candidates pandered to. That will be
reflected in France’s behaviour in Europe.
In 30 years of following French presidential races, I have never seen one played out against such a background of foreboding and anxiety. The French know that their cherished social model – with its excellent infrastructure, healthcare and pensions – has been built upon an unsustainable mountain of debt. For years that was an abstract problem. But now the EU economic crisis is threatening to bring the good times to an end.
France feels surrounded. To the south is the debt-driven austerity and
social upheaval of Greece, Spain and Italy. To the north and west are the
Anglo-Saxon markets of Wall Street and the City. To the east are the implacable Germans insisting on their new fiscal pact, which promises to make austerity a legal obligation.
Both the surviving candidates are promising to defend the French social
model, by going on the offensive in Europe.
The kinds of changes that the two contenders would demand are slightly
different. Speaking just after the first round, Mr Sarkozy promised to “protect the French way of life”. Specifically, he pledged to tighten border controls, limit immigration
and promote a “buy Europe” policy. In EU terms that could translate into a push
for trade protectionism and for a renegotiation of the Schengen treaty on free
movement of people. After decades in which Europe has concentrated on ripping
down barriers to trade and people, Mr Sarkozy wants to start reconstructing
them.
The demands of Mr Hollande, the likely winner on May
6, would be even more problematic for his European partners. He has promised to
lead the fight against austerity in Europe – and to reorient the EU towards
growth. Who could object to growth? But Mr Hollande will do more than demand a
rhetorical commitment in the new EU fiscal treaty. He is likely to want to change the statutes of the European Central Bank – an idea Mr Sarkozy is also
flirting with – which will cause a neuralgic reaction in Germany. Mr Hollande
has also promised to reduce France’s deficit, while promoting Europe-wide
spending on infrastructure. That can mean only one thing: Germany pays, an idea
that will get a frosty reception in Berlin.
The obvious risk is that, in the midst of a financial crisis, the markets
will not indulge yet another European treaty renegotiation. But Mr Hollande’s
reaction is to shriek defiance. At a rally in Bordeaux last Thursday night, I
heard him roar: “The French are a free people, who will not allow their future
to be determined by the pressure of markets or finance.” Which is all very
well, unless you need to borrow billions from those vile markets to meet your
campaign promises, such as the creation of 60,000 new jobs for teachers (a key
constituency for the Socialist party.)
In classing the markets as a threat to freedom, Mr Hollande is echoing the
rhetoric of the far-left candidate Jean-Luc Mélenchon, whose rallies were
punctuated by chants of “Résistance” – a deliberate linking of the second world
war with a rejection of the market. Mr Hollande also cited the French
resistance as a moral and intellectual inspiration.
But while it may be electorally shrewd and emotionally satisfying to
conflate German tanks and foreign banks, the threats are, of course, rather
different. The bankers are not threatening to invade. It is simply possible
that, under the circumstances, they might think twice about lending to France.
Unfortunately, the economic and financial crisis has made the French debate
less coherent. In 2007 Mr Sarkozy was happy to point out that France had some
of the highest taxes and state spending in the world and to campaign on a
platform of encouraging business. His zeal for economic liberalisation even
earned him the nickname “Sarko the American”. But the financial crisis seems to
have confirmed all the most deeply rooted French prejudices about the savagery
of markets, and the need for the civilising influence of the state. All the
candidates, from the extreme left to the extreme right, campaigned against
financial markets and in favour of even higher taxes on the rich.
While the candidates emphasised their differences, what was most striking
as an outsider was how similar they all were: with their attacks on
globalisation and on finance, their praise of the French social model, their
lists of glorious episodes from French history and their insistence that France
was not just any old country, but a model for the world.
The French exception is clearly alive. But it does not seem to be very
well. That could soon become a problem for Europe as a whole.
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