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Politicians in Brussels Say Political Impact of a French 'Non' Would Be Worse Than Economic Effect

Angelique van Engelen - 5/17/2005

Politicians in Brussels, assessing the impact of a possible French No to the EU constitution, say that they fear its political impact more than its influence on the wider EU economy, even though the No vote is mainly driven by French population's concerns over their domestic economy. Europe's political landscape is more fragmented than ever and populist movements, which had been subdued during recent years, are increasingly beginning to surface.

Recent polls in France show that the effect of the Yes campaign is beginning to take hold. It is no longer almost certain that the No vote is going to win, even though they did so in numerous opinion polls, beginning in mid-March. These suggested that the result will be negative, but polls in the first 10 days of May suggested either a tie, or a slight majority to the Oui campaign. The vote will be very intensely followed, especially because one third of the voters is still rather undecided. What the situation in France does highlight is the state of play of populism throughout Europe.

Populist movements tend to come up in times of crises and the French Non vote is a very typical example of how an economic crisis can create long lasting political impact by means of short lived popular sentiment. The outlook that the French situation creates for the rest of Europe is rife with uncertainty and thousands of questions are asked along the lines of what will happen afterwards. It drives home the message that Europe's future is rather bleak with a force that few would like to see repeated.

Political observers say that populism tends to die out as quickly as it arises as the issue that triggers it gets remedied. But what's the remedy for France and the rest of Europe after it declines to continue to be a member of the European Union?

Given the very weak French economy, the quick answer that some come up with is one signalling relief, should it end its membership to the EU. France, together with Germany, has a very precarious economic future. This situation has already forced the rest of the Europeans to review the Stability and Growth pact last March, which is the core of its economic system. It was a move that the French leader hoped would help him convince the French population that Europe's not so bad after all. But to consider a French withdrawal from the Union as something positive is possibly as short sighted as any French populist idea that a pullout of Europe is going to cure the French economy.

Recently, the Financial Times of London pondered the wider impact of the matter when it wondered whether it is at all possible to have a monetary union without a political union. Such a situation might arise after the French go to the polls this May 29th. It has never been tested in history so a definitive answer is not offered. And it is mainly up to the French to consider the ins and outs of this. It remains to be seen what will be left of the talk of the evil axis of the UK style ultraliberalism the French so abhor currently. At the same time, the newspaper says, the European rhetoric also begins to really start to fall short of even covering reality and the question of whether a currency union can work in countries without a flexible market economy is beginning to become rather valid too. In a sense, the longstanding worries about the ageing population of Europe that have dominated economists assessments of macro economic ideas for pretty much the last two Decades are now coming to the fore more than ever.

Due to the insecurity around the French situation, fear mongering is rife in the European markets. Recently, EU Economic and Monetary Affairs Commissioner Joaquin Almunia reassured the markets saying an immediate hike in interest rates by the ECB is not on the cards, should the French deliver a NO at the end of this month. Almunia said his main worry was over the political implications of a "No" vote rather than the economic impact. "My concern is not economic but a political one," he said, adding that the EU's fiscal framework would continue to function.

The immediate political impact on Europe and on France itself is somewhat more inconceivable and therefore all the more ironic, because France is so intricately interwoven with the very idea of a unified Europe. The psychological impact no doubt is biggest. Some people believe a French pullout on purely psychological grounds would be able to effect the demise of the rest of the pact easily. France itself would also run way higher risks in its international policy. A common Europe is the only realistic counterweight to American foreign policy, and to trade and economic leverage with China and the United States -- both vital French aims.

The economic backdrop to the French problem with the constitution and further integration with the EU meanwhile is a rather weak affair, observers say. Some believe that the European economic "model" doesn't deserve even the title, it is that shaky. If it is going to function for much longer and manages to maintain the same level of taxes as during the last decade, it is going to be a miracle. Drastic alterations are needed if Europe wants to become in any way as competitive as it is planning to be by the year 2010.

More and more of Europe's citizens are relying on the welfare system and it's simply not designed for such a heavy load. Growth will have to be incredibly strong, employment high and actual benefits paid low. Three features that countries like France and Germany are lacking painfully. In other countries, the bubble has also burst but to a lesser extent. Government spending and unemployment is up throughout Europe, and the system of incentives and benefits now enshrined as the "European model" proves ill equipped to say the least. It is likely that the European Union will for the foreseeable future need to rely heavily on its working population to make sure later generations can be provided for in even the very basic commodities.

This has been on the horizon for much of the last two Decades. Any populist driven anti European sentiment has long been seen to be a prime risk to European integration by policy makers in Brussels. Much as populism now is a recognisable trend and mainly attributed to anti constitutional movements, Europe analysts for the past years have studied the effects of the wish by people to have 'better' rather than more democracy as a serious threat to the European project. The movements have received less press attention perhaps than the current French Non camp, but they have certainly been as much alive as the current movement in France, which incidentally in some extent also shows some overlap.

Given the fragmentation in the European societies making up the EU, the different manifestations of populism in Europe are bound to be collectively and individually rather heterogeneous. Yet from time to time various groupings conjoin and begin to leave a footprint on the wider political landscape. This is very much what is happening in France right now. And it has been predicted ages ago. Paul Taggart, a specialist researching the issue wrote in a 2003 study on behalf of the Archive of European Integration, entitled "The populist turn in the politics of the New Europe" that populist movements are alive and well across the political spectrum, from left to right, but more to the right. What they have in common is that they undermine the European integration in much the same way as the people opposed to the constitution.

"The experience of populism in contemporary Europe is mainly limited to the right and is manifest most systematically in the new populism of the new radical right", he wrote two years ago. "Less systematically, some Euro scepticism has strong elements of populism. Euroscepticism draws its sources from a wide range of political opinions - from the left Libertarian new politics of some green movements through communist parties to agrarian parties and conservative parties on and moving back to the new populism agenda of the radical right."

Artists are also getting in on the debate. Recently an exhibition entitled 'Populism' opened in four European cities in Germany, Norway, Lithuania and the Netherlands. Rather than putting populist art on show, the exhibition is documenting the recent populist ideas alive in Europe. Teh aim is to create a 'space' which is much like an experimental zone which people used to associate with government. The space is, however, dominated by ideas that are blatant and obvious corporate. In this sense, the exhibition documents the aestheticisation of life that has taken place in new, but increasingly populist ways during the last two Decades.

'The field of visual art since the late 1980s has become more and more "populist" (and popular) in Western cultural production", the exhibition's organizers say. Where is the resistance to corporate domination, you might wonder, reading this line in the exhibition's documentation: "It is a phenomenon around which mass audiences are organised and identities are branded." No doubt the answer is that resistance to this very idea is also part of the project.