The French Presidential Elections as the Focal Point for Conflicting European Economic Governance Paradigms

By Ferdi De Ville

It has been much lamented that European Parliament elections are ‘second-order elections’. European elections attract a low and ever-declining turnout and the voters who do make the effort to go to the ballot box base their choice on national rather than European considerations.
The ‘euro crisis’ may thoroughly change this picture. We are currently witnessing an opposite phenomenon: the Europeanisation of the French national presidential elections.
While the French socialist candidate Francois Hollande is campaigning with a programme that would quite radically deviate from the present fiscal discipline-cum-structural reform path as laid out in Brussels, Berlin and Frankfurt, the current French president and most likely centre-right candidate Nicolas Sarkozy has decided to try to fight an uphill battle in the race by promising ‘German-style reforms’ of the French economy and welfare state. German Chancellor Angela Merkel reacted by declaring that she would actively support Sarkozy’s re-election bid.
Thereby, the French presidential election is becoming an arena for the struggle between two competing paradigms about how to exit from the euro crisis (in an overly simplistic way: austerity and structural reforms vs. consolidation, redistribution and investment) and more generally, about the future of European economic governance (with the same disclaimer: monetarism vs. neo-Keynesianism). The austerity path is increasingly coming under fire, also outside France. Mario Monti, David Cameron, Jean Asselorn and ministers in other European governments, Members of European Parliament as well as a growing list of international organisations and influential economists are condemning the European austerity policies as unwise and unjust. While a French presidential election is always an event that is excitedly followed in European capitals, this time  because of its European dimension  it is attracting even closer and wider interest across the European Union.
Many observers think   not without good reason   that the French elections may function as a ‘game changer’ for the European Union and the eurozone. Indeed, many of the 60 measures that Hollande’s programme contains seem to be incompatible with the European treaties. Just to name a few: proposals for a French public investment bank; employment requirements for investment projects and measures to attract French companies to relocate their production facilities. Besides such national policy intentions that may be in conflict with if not the letter than at least the spirit of the current European treaties, the section on ‘reorienting the European construction’ will alarm the proponents of the current paradigm. Hollande is determined to renegotiate the Intergovernmental Treaty of 9 December 2011. Surely, some politicians in some European governments that had to assent grudgingly to Merkel’s Fiscal Compact will hope that a socialist victory in France can still halt this decision.
Meanwhile, Merkel is playing a high game by so openly supporting Sarkozy’s candidature. If Hollande wins the elections as currently expected, personal resentment may trouble the French-German axis on top of the substantial points of controversy between the next French President and the current German Chancellor. This may lead to confusion and discord about the way to exit the euro crisis and a stand-still in crisis policies. Of course, after the German elections in the fall of 2013, this axis may reappear somewhat to the left on the political map. Or Sarkozy could surprise friends and foes and just secure another term in France.
But even a possible standstill should not be regretted, if it leads to a period of profound reflection about how to reform the European construction. Not only to make it financially and budgetary more robust, and avoid crises in the future. But also in a way that more consistently spreads benefits over citizens in all Member States and embeds a structure and culture of solidarity instead of competition. Until now the approach of the European Union’s leaders with regard to the euro crisis has been very ad hoc. Time and again they assumed and boasted to have found the ultimate technical solution to reassure the markets, an illusion that has been shattered quicker each time. While crisis policies are of course reactive almost by definition, it is clear that both the markets, but more importantly the European populations, await a more ambitious and profound vision about the future of the euro and the European Union that these measures serve. Although Merkel is increasingly promoting a ‘fiscal’, ‘political’ and ‘federalist’ Union, it remains very vague what she means with these concepts. Moreover, such a leap forward cannot be decided in Berlin, not even consensually amongst a composition of European Heads of State and Government at any time, but would require an inclusive deliberation with and amongst European citizens. Maybe something along the lines of the European Convention for the lamented European Constitution.
For now, the Fiscal Compact that obliges Member States to insert a debt brake into their legal systems at constitutional level is a further act of sidelining democracy for the sake of the euro (that is thereby becoming a curse to many). It would be symbolic and appropriate that France, the cradle of democracy, would sideline the debt brake. And that through the French election, an inclusive debate on how to define and promote liberté, egalité et fraternité in the European project would originate throughout the European Union.
Ferdi De Ville is assistant professor at the Centre for EU Studies, Department of Political Science, Ghent University where he teaches and writes on economic and monetary union and the euro crisis.