Mr. Chirac knew the train wreck was coming. The opinion polls foretold the outcome. The French citizens, united from the left and right of the political spectrum, handed their French leader and the EU a decisive "Non" to a deeper political union by rejecting the proposed European Union Constitution by a vote of over 55% against with better than 70% voter participation.
The cynic can point to the several-hundred-page document (219 in English - see page 8 and 9 for the preamble) and 243-word preamble and compare it to the US Constitution that opens with these simple, yet profound words:
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
There were apparently too many competing political interests in Brussels during the draft of the European Union Constitution to produce a document that the average European could conceptualize, let alone explain to a neighbor. It is striking that its potential demise was at the hands of the French rather than the English, who have yet to vote on it and now are unlikely to do so.
As Charlemagne argues in the Economist:
"The fact that the referendum campaigns in both countries have focused so much on the European Union as a whole underlines the dangers of the current debate. A 'double no' would not just signify rejection of the constitution itself. It might also start a backlash against elements of European integration that were already in place before the constitutional debate got going— in particular EU enlargement and the single market. The federalists' gamble would then have gone spectacularly wrong."
The cause of deeper integration may not just be stalled but could actually retreat as the heads of 25 nations must rethink a "more perfect union". The French failure and likely Dutch government failure to ratify the constitution may have significant political, economic and military implications for the rest of the world.
The French EU Dream
The goal of Mr. Chirac in pushing forward the EU has always been twofold: First, to leverage up French power by taking a primary lead in the EU to counterbalance the American superpower. Mr. Chirac said in China:
"It is normal that a group of nations like the EU should wish to have the very closest relations with China, in such a way as to be able to build together the multipolar world which is in the process of being designed for tomorrow."
A multipolar world works by a counterbalancing system of relations. Since the United States is the world's lone superpower, it is obvious what Mr. Chirac's goals are for the EU: working in partnership through arms deals and economic arrangements to push forward a world order that constrains the US.
Mr. Chirac's second goal is to protect the French socialist system, which includes 35-hour work weeks and social benefits that are richer than most, if not all, in the EU. As the Wall Street Journal (paid subscription required) points out:
"Voters in France, where unemployment is at a five-year high of 10.2%, worried that a more tightly knit EU would emphasize free-market reforms along American or British lines over France's traditional social protections. The emphatic 55%-45% 'no' vote warned Mr. Chirac not to go down that path. France's recent move to allow workweeks longer than 35 hours has already helped make his government unpopular."
With 10.2% unemployment in France and a projected growth rate of just slightly over 1% for 2005, compared to the US projection of 3.6% growth, the impact the "No" vote will have on the rest of Europe and the goal of political integration will be played out in the coming months and years. Some of the effects likely will include:
- Investment uncertainties in Europe for all large companies (this will reduce investments)
- A move towards the dollar away from the euro. This is especially important for the Chinese, who may continue to finance a large portion of US debt through the purchase of Treasuries
- Left-leaning governments in Europe (a majority of Western Europe) moving away from structural reforms to placate workers. The lower income French workers and unemployed voted overwhelmingly against the EU (see WSJ article above)
- A slow-down of national legislation that increases interstate EU cooperation
- Stalled efforts on military integration that will continue to lead other friendly nations into joining American security arrangements
- A power struggle for the "driver's seat" of political leadership within Europe
- Less influence for European nations in world affairs, including possibly relations with the Middle East and Asia
However, the effect of the French vote will likely have some major implications for other powers. I will address these in a follow-up post tomorrow.