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Why France and The Netherlands said “No”

By James Cumes - posted Wednesday, 15 June 2005


With the establishment of the ECB, this instrument - and this power - passed from the national capitals to the centre. This in itself was revolutionary. The ECB was required to keep inflation within certain limits. In addition, rules of harmonisation set limits for budget deficits and national governments were required to adhere to those limits - something that they have recently tended to breach.

These developments transformed the European communities from a preferential trading bloc into something approaching economic union: a big step away from a political federation but with the component nation-states diminished by loss of their most important economic-management power.

Another vital consideration for the rejection of the proposed EU constitution was the vision of a united Europe after World War II, motivated by several reasons. One of those reasons, especially after 1947, was to keep western Europe firmly in the non-communist camp which was by no means assured after the War. Powerful communist movements existed, especially in Italy and France, and “socialist” parties and governments followed economic policies of intervention and direct participation in mixed economies.

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Although overt support for these policies diminished with the collapse of Soviet communism, spiritual support for them remained strong. This persisted even while the economies were being “reformed” to conform more to the American and Anglo-Saxon model of free markets, privatisation and the rest.

In this regard, Europeans had some special difficulties with the reforms, such as the reunification of Germany. Maastricht and the single currency put them in a straitjacket while at the same time they were required to let their economies run free.

This was an impossible combination. The wonder is that governments, in particular such governments as the Social-Democratic Schroeder Government, have persisted for so long in trying to introduce “reform” policies which have made policies of growth and employment more and more difficult. Whatever the support at the level of the “political classes” - and of mainstream economists - the support of the ordinary man and woman in the street has become more and more reluctant.

The reason that they have had popular support so far - however reluctant - is because the “reforms” are modelled on a US style economy which has continued to be represented and widely regarded as a high growth, high productivity economy in relation to the sagging European Union one: although there are grave weaknesses in the US economic model. Those weaknesses, however, have not yet been revealed in their true nature or to their true extent. So the key question now is whether the popular support these countries have been able to maintain has now become so shaky that it has virtually disappeared.

It may be that the people’s “No” in France and The Netherlands is in fact a people’s revolt - a formidable expression of direct democracy - against the mainstream economic and monetary policies that have dominated the thinking of virtually all political parties and political “classes” in the West, especially in the last two decades. Those policies have created a variety of economic as well as political and strategic instabilities. Those at the bottom and even in the middle of the economic pile have suffered most from inequalities, unemployment, declining real wages, lower or static levels of living and uncertainty about their future. The people’s “No” might well be a loud call to the “political classes” to return to economic and social responsibility, to attend to the needs of the ordinary people and not just to the greed of a self styled elite.

Essentially, it could be a people’s revolt which, if its warning is not heeded, might lead to direct action outside the processes and procedures of traditional democratic institutions.

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Article edited by Tanvi Mehta.
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About the Author

James Cumes is a former Australian ambassador and author of America's Suicidal Statecraft: The Self-Destruction of a Superpower (2006).

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