Seeker Blog

Gregory Djerejian predicts that France will vote no to the EU constitution today. Greg has assembled a useful briefing on the set of issues he believes add up to a defeat, combining his own analysis with that of the Financial Times and of Anatole Kaletsky, writing for The Times (London). Kaletsky’s summary of the economic factors follows:

The people of France, Germany, Italy and the Netherlands may be angry about globalisation or ultra-liberalism or immigration, but this reflects a deeper malaise. Their living standards are falling, their pensions are in danger, their children are jobless and their national pride is turning into embarrassment and even shame. In sum, they feel that their countries, which numbered among the world’s richest and most powerful nations as recently as the middle of the last decade, have gone to the dogs under the leadership of the present generation of politicians. And, at least in the economic sense, they are absolutely right…

The relative economic decline of “old” Europe since the early 1990s — especially of Germany and Italy, but also of the Netherlands and France — has been a disaster almost unparalleled in modern history. While Britain and Japan certainly suffered some massive economic dislocations, in the early 1980s and the mid-1990s respectively, they never experienced the same sort of permanent transformation from thriving full-employment economies to stagnant societies where mass unemployment and falling living standards are accepted as permanent facts of life. In Britain, unemployment more than doubled from 1980 to 1984, but conditions then quickly improved. By the late 1980s it was enjoying a boom, the economy was growing by 4 per cent and unemployment had halved. In continental Europe, by contrast, unemployment has been stuck between 8 and 11 per cent since 1991 and growth has reached 3 per cent only once in those 14 years.

This dreadful economic performance is more than enough to explain the political angst among Europeans. But what does it mean for the future of Europe? If Europe’s economy remains paralysed, then the federalist project is clearly dead, as are all hopes of further significant EU enlargement. But if the economy recovered, the disillusionment with EU politics might quickly vanish.