May 30, 2005

French Reject EU Constitution

The French voters rejected the proposed EU constitution by an 8 to 12 point margin. Since the constitution requires unanimous buy-in from the member states, it seems like the most likely course from here is a revote. I doubt they'll change anything of substance in the constitution, since that would require revotes in other countries, too. I don't think it would really matter, anyway.

The rejection is based on the fear, strange as it is, that the EU would further liberalize the European (and therefore French) economy. While most Americans would wonder how the Eu could be market-oriented when it spends so much time trying to stop the English from working so hard (in the form of weekly-hours caps) or keep overly-successful products from being marketed too widely (e.g. Swedish strawberries). The EU is over-regulated, over-subsidized and a mess of special protections and artifically super-high labor costs. It has almost no labor mobility to the strangling power of many European unions.

And yet, viewed from the perspective of the French working class, for decades sympathetics with the West's most powerful Communist Party and lately somewhat taken with the neo-fascist National Front, the EU looks like an Anglo-American economy of stock markets, capital flows and efficient labor-pricing.

They do have something to worry about, since the labor costs of Eastern Europe will probably require some changes in the Western European economy. But that's ultimately a good thing, since the high cost of labor is throttling the competitiveness of those same economies. Some balancing would do them good.

It's possibly also connected to the policies of Chirac and Rafarrin related to the French work week. Ultimately French rejection is actually from a socialist-nationalist standpoint, rather than a capitalist-nationalist one. If anything, this makes me see the EU in a bit of a new light. Sure, it's still horribly mismanaged, but if it pisses off the French - and French Communists at that - then it can't possibly be all bad.

This will probably somewhat put the brakes on further EU integration measures after the constitution. Hopefully they'll get the message and wait a few extra years before taking the next step (like say Turkey or EuroForce). I doubt it, though.

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