Book Review: France and the Politics of European Economic and Monetary Union
The European Economic and Monetary Union (EMU) represents a major step in the integration of the EU economies involving the coordination of economic and fiscal policies, a common monetary policy, and a common currency, the euro. France has been widely acknowledged as the principal driving force behind the EMU, such that the creation of EMU was at the centre of France’s European policy. France’s affirmation to the EMU was in association with its agenda in modernising the French economy. The book explores the conception, negotiation and execution of the EMU as well as French policy on its operation.
The author explores the phenomenon through which France’s drive for the EMU arose from the challenges posed by unstable global financial markets, the political demands of the rising urban middle-class as well as the restoration of Germany’s economic strength. She answers the question why did France, with its strong sense of national identity, want to give up the Franc for the Euro through her analysis on the reflection of the needs of a generation emerging from the humiliations of wartime occupation to rebuild the country’s devastated infrastructure and its sense of national pride (p. 3). A successful European single currency also offered the prospect of reducing France’s vulnerability to fast-growing speculative capital movements and, ultimately, of challenging the international supremacy of the dollar (p. 8). Thus, the author argues that for France, EMU became a bold political response to an existential dilemma. It was born of necessity rather than driven by ideology.
The book traces the unresolved Franco-German tensions over the design and political governance of European economic co-operation which led to the crisis. It questions whether the economic and monetary union was a political project, motivated by Franco-German power-brokering at the expense of sound economic rationale. The French treasured national political control of economic and monetary policy. The Germans were equally united in their commitment to an independent central bank which was purely German. The author describes the infighting between the German Bundesbank and the country’s more European minded politicians. Through her summary of the decades of position papers, election campaigns, summits and high-level committees, the author shows how Germany ultimately preferred to bind its biggest trading partners into a single currency than to deal with disruptive evaluations. She rightly states that through European single currency provisions, France and Germany had made a historic commitment to arguably the most ambitious shared project ever devised between independent and once hostile nation-states (p. 90).
The book discusses how issues between France and Germany persisted over how, in a future Eurozone, economic decisions would be taken and made politically accountable. In this respect, the author mentions the emergence of the Stability and Growth Pact along with an EU Forum where Eurozone Ministers could co-ordinate their economic policies. She describes this as an “economic government” of some kind (p. 125). It was concluded that the ECOFIN (Economic and Financial Affairs Council) would remain the only EU body taking formal decisions but a joint Note on ‘Economic Policy Co-ordination in Stage 3 of EMU’ set out a list of economic, budgetary and monetary topics which might be discussed separately, ahead of ECOFIN meetings, by a group of Eurozone Finance Ministers.
The phenomenon by which wide membership gave the Eurozone the political potential to carry more weight in international bodies like the International Monetary Fund (IMF) is traced in the book. It reveals the French ambition of the potential to one day even challenge the supremacy of the dollar as the global trading and reserve currency. The author presents then French President Jacques Chirac’s argument that France should encourage the emergence of a ‘multi-polar world’, in which Europe would carry equal weight with other large regions, enabling the creation of new global relationships and the strengthening of international institutions (p. 128).
The author tries to analyse how European governments, while steadily losing their political and economic freedom to the encompassing power of global financial markets, find a way both to open up their economies as well as to shield their societies from the worst effects of globalisation, by co-operating to create a stable, fairer and more democratic system. The book highlights the dilemma facing the French leaders in the period 2002-2007 to offer that new strategic vision and to convince the French public that difficult domestic reforms would pay off in greater prosperity, higher employment and more global influence for France through its European role while maintaining the same economic policy (p. 140). The author questions whether this ambitious European project can still become the force of modernisation and growth along with protecting against the extremes of globalisation and nationalism, the way French leaders hoped it would be.
The author concludes that the EMU was designed to build a system of mutual trust and responsibility, advancing solidarity in exchange for transparency and better financial management (p. 179). Valeri Caton’s analysis suggests a positive approach towards the future of the Eurozone favouring the willingness to compromise national sovereignty. Her book is an essential analysis of the interplay between economics and politics in the formulation of the EMU. It is an extensively researched guide of EU’s most high-risk project till date and has been an added value for scholars of European integration. Overall, the book is a must-read for scholars and researchers on the politics of European Economic and Monetary Union.
Author of the book Valeri Caton,
Name of the Book France and the Politics of European Economic and Monetary Union, St. Antony’s Series,
Publisher: Palgrave Macmillan, 2015, 211 pp.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of The Kootneeti Team