by John M. Curtis
(310) 204-8700

Copyright June 1, 2005
All Rights Reserved.

urning their backs on the European Union, French voters overwhelmingly rejected the proposed European constitution, slapping 72-year-old French President Jacques Chirac in the cheeks. Chirac put his reputation on the line, campaigning for a yes vote on the new European Union charter. With unemployment over 10%, French voters were spooked by the prospect of poor Eastern Europeans usurping French jobs, known for security and generous fringe benefits. While the American right rants about the evils of socialism, French workers like government-sponsored healthcare, vacations and retirement. Chirac's miscalculation clearly exposes cracks inside France's political establishment, misjudging the extent of discontent among anxious voters. Expecting an onslaught of East Europeans galvanized 55.5% of voters to reject the brainchild of former French President Valerie Giscard d'Estaing.

      Giscard d'Estaing, like others in the EU, believe “strength in numbers,” seeing the 25-member body as a new superpower, directly competing with the U.S. and China. While Giscard d'Estaing and the EU need all 25 signatories, so far only eight-of-nine have signed on. While not disliking the idea, stubborn unemployment won out over éclair-in-the-sky promises about global supremacy. Chirac rolled the dice and lost, costing him precious credibility. Whether he can survive politically is anyone's guess. Chirac and France have played a pivotal role since the 1950s, forming the European Community in the ‘60s and eventually, with other 12 prosperous Western European countries, the European Union in 1992. “Make no mistake, Fances's decision inevitably creates a difficult context for the defense of our interests in Europe,” said Chirac, sounding dispirited after a crushing defeat.

      Anticipating the French vote, world financial markets pummeled the Euro, dropping the exchange rate to recent lows against the dollar, around $1.20. With Federal Reserve Chairman Alan Greenspan raising short-term rates, the Euro already fell 10% during the first half of 2005. Another negative vote in the Netherlands scheduled May 30 could drop the Euro even further, something U.S. tourists have wanted for some time. More schisms in the EC would further erode the currency against the dollar and other foreign currencies, especially Asia. “The ratification procedure must be pursued in other countries,” said Luxembourg Prime Minister Jean-Claude Juncker, trying to find a silver lining to France's pivotal vote. Chirac still believes he can change enough French laws to salvage public support. But without France, the EU no longer has the clout associated with the world's 5th-ranking economy.

      American workers found out the hard way, ratifying the North American Free Trade Agreement, a compact benefiting U.S. corporations and undocumented workers more than American taxpayers. “We regret the choice coming for a member state for 50 years has been on the essential motors of the construction of our common future,” said European Commission President Jose Manuel Barroso, stunned that France would reject the EU constitution specifying 2 1/2 year presidency, further erasing, in effect, cultural divisions of age-old countries. Giscard d'Estaing, and other idealists in the EU, envision ending ethnic strife that led to nearly 100-milion deaths in the 20th century. France's no vote—and the one expected in the Netherlands—suggest that proud European histories and traditions resist abandoning cultural identity. EU advocates thought the Euro would bring member states under a common umbrella.

      Six-years after Europe accepted the Euro, less mature economies have gotten a free ride, while, at the same time, East and Southern European countries priced themselves out of world export markets. Inflated Euro values, largely due to artificially low U.S. short-term interest rates, have hurt both European and American economies. Like West Germany's reunification with East Germany, Western European countries have had to subsidize more impoverished nations. Germany also witnessed its own backlash with the defeat of Chancellor Gerhard Schroeder's party in recent elections, also due to economic infiltration by Eastern Europeans. “It makes me sick to think that that people from (other EU countries) work in France for less money,” said 24-year-old Emeline Pradenc, worried that the EU constitution would undercut good French jobs. Chirac had no answer for Pradenc's concerns.

      Without France, the EU takes on a different complexion. Like the British, the French realized that lofty EU promises have side effects. Giving up the Franc already frayed the French identity, improving paper wealth, but exposing the workforce to encroachment by poor East Europeans. While better educated, higher income voters supported the EU constitution, younger, upwardly mobile citizens feared a loss of opportunity. Europeans, especially the French and Germans, have watched carefully as U.S. free-trade agreements—especially NAFTA—have cost jobs and opened the floodgates of illegal immigration. With unemployment already running high, Chirac had a tough sell, convincing French voters to ratify a document, essentially ending borders in Europe. Before voters sign away their sovereignty, Chirac will have to do a better job of reassuring anxious workers.

About the Author

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

©1999-2005 Discobolos Consulting Services, Inc.
(310) 204-8300
All Rights Reserved.