Tag Archives: France

French Franc Naustalgia

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Well I’ve been reading about the Germans, the Italians, now apparently it is the turn of the French to feel naustalgic:

“Three out of five French people miss their old currency, replaced by the euro in 2002, a survey for Valeurs Actuelles magazine showed on Wednesday. In February 2002 that figure was just 39 percent.

While the rising tide of nostalgia seemed to chime with French voters’ rejection last month of theEuropean Union constitution, a breakdown showed longing for the franc was widespread even among those who support the EU project.”

I like that bit, “longing was widespread even among those who support the EU project”. This highlights the fact that it is perfectly consistent to feel pro EU and yet not want the common currency. Out of the wardrobe everyone.

Update: The Financial Times this morning also mentions the emergence of Philippe de Villiers, the leader of the nationalist Movement for France, as the champion of a referendum in France on continued use of the euro. According to the FT de Villiers, who is a leading anti-constitution campaigner, said a debate about Europe’s single currency was already under way in Germany, the Netherlands and Italy but had not properly started in France. ?Everybody notes today that the adoption of the euro was a technical success but its economic, political, and human toll is incontestable,?. Now much of the recent ‘ referendum euro’ talk comes from those who would predictably say what they are saying. They are normally not people with any special knowledge of the economics behind it, and I think no great significance should be attached, except the fact that these kind of comments are becoming commonplace, where they weren’t before. My guess is that debate about the euro will increase with time.

China Trade With EU

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I’m not very happy with the ‘US Trade Figures‘ post I put up last Friday. I think it’s a glorious mess. The key to the problem is that I tried to deal with two – interrelated but disinct – topics at once: the euro and China trade. So today lets ignore the euro (which has once more resumed the downwards drift, even as I write) and take a bit of a closer look at where we are – in trade terms – with China. (Btw: the planet has finally returned to its orbit, and Brad Setser has an analysis of the US trade data here).

The big item in this weekend’s news is, of course, the agreement reached with Beijing on textiles. The EU textile industry will now have three years to adapt, but since textile manufacturers don’t appear to have taken too much advantage of the ten previous years, it is hard to know whether this will serve any useful purpose. Doubly so, since it is not yet clear how the calculations will be made, and I have the distinct impression that much of the recent surge in imports will now, in effect, be consolidated.

Be that as it may, what about the broader issue?
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Asterix Economics

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There is no doubt that the EU Budget debate will warm up considerably this week. Unfortunately, as Le Monde suggests it is a case of “Le budget europ?en entre rabais britannique et subventions agricoles” (The EU budget: between the British rebate and the agricultural subsidies). Now it does occur to me that there is another dimension here:

“Generations of French children have grown up on the “Asterix” comic books and the myth of the leisurely British who were conquered by Rome because among their shortcomings was a horror of working on weekends. Today, instead of poking fun at their island neighbor, some in France are wondering whether they can learn from it.”

Now *a* generation of French children grew up on this because there was a time when it bore some relation to reality: let’s say in the 60’s and 70’s. But things have changed. Today, according to French Socialist politician Henri Emmanuelli:

“You can’t speak about Great Britain without specifying that to earn a living, people there have to have two or three jobs….Even better than that would be slavery with a bowl of rice as recompense. That way there would be no unemployment at all.”

There is just one snag attached to all this fun-poking at the expense of the Brits, and it is called the rebate. If things in the UK are going so badly, then how come they are considered to be so rich they can afford to pay proportionally more? There appears to be an inconsistency here. Isn’t someone about to find themselves hoisted on their own petard?

Now It’s Footwear

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The EU’s trade dispute with China risks spreading from textiles to footwear after the EU released data Wednesday which purported to show that Chinese shoe imports had surged since the end of quotas at the start of the year.

“Responding to concerns of European shoemakers, the European Commission said imports of leather shoes and textile slippers had soared nearly eight-fold in the first four months of 2005, pushing down prices on European markets by 28 percent. Shoemakers from Italy have sent more than 200 letters of complaint to the Commission in the past two weeks, according to Leonardo Soana, director general of Italy’s National Footwear Association.

They charge that China, and to a lesser extent Vietnam, are dumping leather shoes on the European market and putting shoemakers out of work.

Soana told Dow Jones Newswires that Italy’s shoe industry will present a formal complaint on June 15, alongside claims by Spain and Portugal. French, Greek and Polish industry groups will back calls the for tariffs on Chinese shoes, he said.

Looking at the list, it is pretty clear which parts of the EU are being most hit by these ‘bottom end’ imports from China, and why: they are generally the economies which are most challenged by the need to move up the value chain. That being said, and correcting slightly an earlier renminbi post, it is obviously the case that the rise of the euro against the dollar, has also been a rise against the renminbi, 40% or so in 3 years, so it is clear why there is a ‘pain barrier’ now in Europe.

However on the free trade angle, Stumbling and Mumbling has a nice quote from Scottish Economist and Philosopher David Hume which is very much to the point:

“There are few Englishmen who would not think their country absolutely ruined, were French wines sold in England so cheap and in such abundance as to supplant, in some measure, all ale, and home-brewed liquors: But would we lay aside prejudice, it would not be difficult to prove, that nothing could be more innocent, perhaps advantageous. Each new acre of vineyard planted in France, in order to supply England with wine, would make it requisite for the French to take the produce of an English acre, sown in wheat or barley, in order to subsist themselves; and it is evident, that we should thereby get command of the better commodity.“

Heeding Henry.

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Joschka Fischer, the German foreign minister, may be coming out of the dog house – if only conceptually.

After even the left leaning German daily taz recently began publishing political obituaries for the man who more than anyone represents the political maturing (or not) of the generation of ’68 (following the affair about problematic political guidelines leading to criminal exploitation of German visa policies in Eastern Europe and in light of the looming federal election that will likely lead to a government without a Green party participation), Mr Fischer may have decided that it might be worthwhile to spend his remaining time in office not just by campaigning for a permanent German seat in the UN security council but by heeding Henry Farrell’s advice about the opportunities of a dieing European constitution and going back to his own foreign policy ‘roots’: In May 2000, he used a speech at Berlin’s Humboldt University to sketch out his ideas for ever closer union, “From Confederacy to Federation” (pdf available).
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‘Those Politicians’

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Last Monday I had some ironing to do. Then I remembered that television still has one advantage over surfer-blogging: you can do the ironing at the same time. Of course the upcoming referendum was on several channels. I could not stand more than 20 minutes of it though (neither the ironing nor the tv). The various program presenters seemed to want to make it look like this was a political *debate as usual*, or so it seemed. National politicians dominated the guest lists. And most of them did what we expect from them nowadays: instead of seriously and conscientiously considering arguments, the majority of them seemed more intent on achieving a high score in something resembling a high-school debating-contest. Television comes in handy here.

In fact one of these *debates* was actually organized like a contest. Six politicians were invited. On every issue two of them went into a direct confrontation and the 6-minute sessions were immediately followed by a ‘flash vote’. And the winner is…
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Latvia Votes Yes

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The Latvian parliament approved the Constitution Treaty earlier this morning, by a huge majority:

“Latvia’s parliament voted overwhelmingly to support the EU constitution on Thursday, a decision lawmakers and analysts said sent a message from the new Europe to the old that the approval process must continue.

After several European leaders urged other member states to press ahead with the endorsement process after convincing rejections in the French and Dutch referendums, Latvia’s 100 member parliament voted 71 for the constitution with 5 votes against and 6 abstaining“.

The next hurdle will be the Luxembourg referendum, on the 10th July. This will take place as scheduled if the EU summit of 15/16 June doesn’t decide to change tack.

Meanwhile French media are announcing that there is a plan B, it’s called Blair. Tony Blair, they are suggesting, will seize the opportunity presented by disarray in the federal Europe camp to push ahead with ‘liberal’ economic reforms, leaving the institutional infrastructure to languish. Possibly the outcome the French fear most. Something like this may in fact be what happens.

Irritation.

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Over on Crooked Timber, Maria Farrell is being haunted by the sheer gaul of them, and consequently expressing her irritation with France and the French, not just

[f]or falling asleep at the wheel in 2002 and letting back in to the Elysee a fraud who has no vision for France, no values apart from expediency, and whose number one professional objective was using the office to stay out of jail.”

But also for pretty much everything else imaginable – so go read her post.
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‘Gloom’ After French Vote

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The Washington Times (of all places) carries a UPI text about a Deutsch Bank research note on the economic consequences of the French ‘no’:

“France’s rejection of the European Union constitutional treaty by a majority of 54.9 percent is a severe blow to European integration and threatens to depress European economy back into eurosclerosis as in the 1980s, warns Deutsche Bank in a research analysis published Monday.”
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If The Netherlands Vote No………

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If the Netherlands vote ‘no’ tomorrow (and the opinion polls don’t seem to leave much room for doubt), then according to the FT Jack Straw will tell the House of Commons next Monday that the UK government is immediately suspending parliamentary passage of the European treaty bill. This means the ratification process will be dead, not just in theory (which I think it is now) but in practice. This announcement leaves me with a strange feeling. These days I don’t feel especially British, I am not a great admirer of Tony Blair and Jack Straw, but somehow they seem to have drawn the obvious conclusions, conclusions which clearly are not obvious to many other EU politicians. I can’t help thinking that if we could get to the bottom of why this is, we would understand a bit better why there is such a communication problem between the UK and other parts of the EU.

Britain is to suspend plans to put the European Union constitution to the vote if the Netherlands follows France and rejects the treaty in a referendum on Wednesday.

As the shockwaves of the French vote were resounding on Monday, it emerged that Tony Blair and Jack Straw, foreign secretary, have decided immediately to freeze plans for a UK referendum if, as expected, the Dutch vote No.

The government hopes other EU states would at once declare that rejection in France and the Netherlands meant ratification in all countries must be suspended. Even without consensus the prime minister and foreign secretary believe it would be politically impossible for the UK to carry on with its own ratification.

Incidentally, Jaques Chirac is to make a formal statement about the future French government and his interpretation of the vote on French TV tonight.