Making Sense of the French Vote on the EU Constitution

6/9/2005

Making Sense of the French Vote on the EU Constitution
by Dean Myerson
May 31, 2005

Much is being made of the recent failure of the constitutional
initiative in France. Supporters had predicted that the sky would fall
if the vote failed, and prominent newspapers are sounding warnings of
great peril for the EU. Most observers knew that the constitution would
not be approved in this round. They hoped it wouldn’t be France that
would reject it first, but there was plenty of warning that this would
happen. Doom saying ended up being a poor campaign tactic for passage.

We can now expect that those same people who predicted such disaster
will now explain how it is just a hiccup for the EU. With the French
“non”, it is now likely that three more countries will fail to ratify,
assuming they even try: Denmark, the Netherlands and the UK. Sweden
would also probably vote against, but their government decided to deny
its citizens a chance for a direct vote, instead sending the decision
to the parliament.

The Opposition

There are generally two ideological camps in the “no” category. On
the left, there are those who oppose the neoliberalism of the EU and
its record and future potential to undermine the European social model.
Some also fear that the EU could become militarily emboldened and are
concerned about the loss of sovereignty on these issues.

Supporters of the constitution on the left believe that the new
structures created by the constitution would make it easier to regulate
the excesses of neoliberalism and pointed to the inclusion of the
social charter in the constitution against the desires of the right.
But this reformist and incrementalist point of view was not easy to
communicate to left-leaning voters and did not provide much motivation
to them.

On the right, the opposition often is nativist: fear of the poorer
European to the east and of Turks, as well as opposition to spending
money to help them develop. These opponents to not want to spend money
helping poorer parts of Europe develop and feared for the sovereignty
of their countries.

Across Europe, the right-wing side of this has generally been
louder, though that probably is not the case in France. The
constitution would have had minimal affect on neoliberalism in the EU.
While it reiterated the neoliberal economic policy of the EU, it did
not strengthen it. While pressures to privatize often came from the
European Commission, the policies connected with the Euro currency, as
controlled by the European Central Bank (ECB) and inherited from the
Bundesbank (the former German Central Bank), are probably now the
strongest aspect of neoliberalism in the EU. Despite some small efforts
to change ECB policy in the drafting of the constitution, the
constitution would have had no effect in Euro policy.

Neoliberalism in the EU and the European Central Bank

For those who oppose neoliberalism in the EU, championing the defeat
of the constitution is a hollow victory. They need to take aim at the
ECB and the related Stability and Growth Pact (SGP), which when
combined, force a monetarist policy on Europe far to the right of
anything advocated by our own Alan Greenspan. Then they need to focus
on the European Commissioners who have the responsibility for setting
economic policy.

In general, the defeat of the constitution will embolden the
nativist right, and their opposition to immigration. They have been
more vocal in more countries, particular the UK and the Netherlands.
This will have the potential of poisoning relations with the new
Central European members of the EU by separating rich Europe from poor
Europe, thus making internal EU relations more difficult.

The specific impact on elections and governments is dominated by
domestic factors in the EU countries. Where center-right governments
supported the constitution and the people opposed it, as in France (and
likely in the Netherlands), center-left parties may be helped, even
though they supported the constitution as well. Tony Blair is now
expected to cancel the public referendum in the UK to avoid the
humiliation of a defeat, but since he just had his national election,
it is less important to him. But since more than 80% of EU countries
will ratify the constitution, the domestic effect may not be large.

Even in Germany, where a public vote would be close but is not
allowed by their American-influenced constitution, the recent
parliamentary approval of the constitution has only modest effect on
domestic politics. The ruling Social Democratic-Green Party coalition
is weak in the polls and expected to fall in upcoming elections, likely
in September. The Christian Democrats (conservatives) are campaigning
against immigration, but unemployment is the dominant issue.

Short-term Implications

Undoubtedly the constitution will be renegotiated, whether or not
the replacement is called a constitution. It may take two to three year
to propose a new treaty, and the eventual new effort at ratification
may be impacted more by potential changing attitudes among voters than
by any changes in the constitution. If constitutional opponents get in
government and do poorly in general, they may lose credibility. A few
of the more centralizing features of the new constitution would likely
be dropped, and they might even try to create a ratification procedure
that does not require approval by all member countries. That is the
case for the Euro, but it is easier to opt out of the Euro than the
constitutional provision for the EU.

The EU grew by 10 countries in 2004 and was looking to add Romania,
Bulgaria, and possibly Croatia soon, with long-term talks with Turkey
to start. While the talks with Turkey will go on, the entry of the
other three is now jeopardized, and the Turkish talks will just go
through the motions. Each EU member country must also approve new
members, and opposition to any new members will be emboldened. The
addition of 10 new countries was a much larger one-time addition than
ever before. EU elites did not realize how hard it would be to digest
such growth. Now they have some catch-up to play.

But history shows that the EU rarely gets a grand-slam success. They
usually muddle through. The constitution would not have quite been a
grand-slam, but it was just asking too much. It was a long document
with lots of minutiae in it.

The constitution has been criticized for its length, suggesting that
it should be as short as the American version. But the primary reason
the US constitution is so short is because it was negotiated by a
limited group of elites in secrecy. No modern constitution that was
developed with democratic process (and the EU constitutional process
only looks good when compared with the American one) could write the
kind of short document that the American Founders did. A diverse group
of participants will want their interests dealt with and this would
make a short and concise constitution almost impossible. As it was, the
European Constitutional Convention allowed input from interest groups,
but centralized the decision-making in a small secretariat as to what
would actually go into the constitution. The constitutional convention
delegates never got to vote on specific provisions. And even that
process took 15 months.

The EU constitution was a flawed document, but most of the most
public arguments against it were based on past actions and activities
of the EU rather than on developments that would come from the
constitution. Certainly there were critiques of new rules and
structures created by the constitution, but interviews with voters on
the street rarely mentioned those factors. Voters talked about jobs,
immigration, economic policy and threats to the welfare state.

Eurosclerosis and EU Economies

The EU has always been an elite-driven project, and it is the elites
on most parts of the political spectrum who will take a hit with the
failure of the constitution. That the project was elite-driven does not
mean that regular people opposed it. Europeans are more trusting of
authority than Americans and they just went along with it. The
open-border “Schengen” procedures (named after the city they were
negotiated in) and the Euro currency made life easier in a continent
where people cross national borders on a regular basis. But those
improvements are now taken for granted.

Stagnant economies are an underlying factor in much of the
opposition on both sides of the political spectrum, but as long as the
Euro is run with such strictly monetarist policies, the economies of
Europe will not become dynamic. Amazingly, supporters of these
monetarist policies claim that lower interest rates would have no
impact on growth rates. And while the US Federal Reserve is required to
consider economic growth in its policy decisions, the ECB is not.
Complaints that the social model must be weakened are a dead-end
politically, and are generally disproved when one notes that the
healthiest economies in Western Europe have the highest taxes and the
broadest welfare systems.

The economic problem in Germany and France is not so much the
existence of the welfare state, as it is how they are financed, and in
Germany’s case, the debt left over from unification. The Stability and
Growth Pact mentioned before has essentially made it impossible for
Germany to implement the economic policies that are needed, which is
ironic given that Germany forced those policies on the EU. Economists
who study European welfare states differentiate between the Nordic
model, which works well, and the so-called Bismarckian model more
common farther to the south. All of the costs associated with long
European vacation time and shorter work weeks don’t seem so significant
to employers when you remove the worry of dealing with health
insurance. In fact, the cost of labor in the US is about the same as
Nordic countries because US employers have to deal with health care
insurance. But you won’t hear conservative politicians who want to
extract more profit from workers mentioning these differences.

So for Europe’s elites to deal with the slow growth of the European
economy, and thus opposition to EU growth and evolution, they must
loosen the monetarist policies of the Euro, which could also free them
from their subsidization of the weak US dollar, a subsidy mentioned far
less frequently than US military support during the cold war. If this
was done, then workers might be more willing to negotiate on those
aspects of work rules that are out-dated. But for now, the pressure is
all on the workers. Until this is done, festering opposition to
developments in the EU will likely continue to be held hostage by
voters who will continue to resist surrendering generations of
hard-fought gains in work rules. On the other hand, if more balanced
economic policies led to an improved European economy, opposition on
both the left and right would diminish as there is less fear of
immigration when jobs are plentiful and less fear of neoliberalism when
the social model is not under attack.

Further Impacts of the French Vote

The result of the defeat of the constitution might ironically be the
opposite of what many opponents want. Without new procedures for
decision-making by elected representatives, power inevitably will shift
to the bureaucracy, which in the EU means the Commission. This entity
is the most hated one by the right wing for its centralization of
rule-making away from the representative bodies to the Brussels
bureaucracy. And because all member countries are equally represented
on the Commission, with no thought given to population, the small
countries like the Commission as well.

Some have suggested that the French defeat of the constitution will
weaken French influence in the EU. Given the benefits France has gotten
in protecting its agricultural sector, it is a valid fear. The other
side is that in an effort to woo French support in the future, other
countries may be even more accommodating of French desires than in the
past.

Staying with the current EU structure may centralize rule-making
even further, and will also empower the many smaller countries,
possibly making opposition in the large countries like France and the
UK even stiffer. Supporters of the constitution claim this will lead to
gridlock. Undoubtedly, the EU is not going to be able to establish bold
policies. It never has been. As usual it will muddle along. There have
been periods in its history where it did exactly that for some years
until some factor jumped out to permit it to take the next step. It is
impossible to predict what that factor might be, but it seemed likely
all along that adding 10 new countries, and increasing population by
50% in the process, was likely to require some time to catch up.

Those who voted no made clear that they were not against the EU. It
will take some time for these forces to play out and to see if the
leaders who drive EU process are willing and able to take a big step to
get passed the current malaise. Triggers could come from European
economies or they could come from the US, as support for a stronger EU
could build if there are continued unilateralist policies from the US.
But none of these are easily predictable. For now, the ratification
process will continue and we will see how other voters react to the few
countries that vote no.

The EU has been on a roll since the late 80’s: dropping border
control, converting the EC to the EU, inaugurating the Euro and in
2004, the large expansion. That roll is now over and the time has come
to consolidate these gains and refine how they work. The EU bureaucracy
may be no larger than that of a modest city, but its impact does spread
widely. There is deep support among Europeans for what they simply
refer to as “Europe,” the process of integration, including some loss
of sovereignty. In time the EU will figure out how to rebuild lost
momentum. The biggest short-term impact will probably be the delay of
further expansion, but if it can become a grassroots-driven process
instead of an elite-driven process, it will be more sustainable when
the next challenge arrives.

Dean Myerson has been studying the European Union and its proposed constitution from a Green perspective for the last year.