French greet euro with dispassionate embrace

When President Jacques Chirac went on television earlier this month to calm French fears about EMU, newspaper editorial writers noted sarcastically that only in France do leaders address fears that do not exist.

An opinion poll this week showed that 59 per cent of the French believe the euro will be advantageous to them, although many are concerned that it will mean less social protection. The business community is enthusiastically pro-euro including the bankers who stand to lose most through the loss of exchange commissions.

French businesses and the government have promoted the euro for so many years that the public hardly seem to notice any more. The French supermarket giant Leclerc is financing the French Foreign Ministry's new "Vivre l'Europe" public relations campaign, and this week published symbolic one-page newspaper advertisements pricing yoghurt in euros. The French economics minister, Mr Dominique StraussKahn, has engaged 20 big companies to assist smaller businesses in adapting to EMU. On May 11th, Mr Strauss-Kahn will attend the first minting of French euro coins at the Pessac factory near Bordeaux.

The most emphatic supporters of monetary union are in the centre-right Union for French Democracy (UDF). Last week, the former President Valery Giscard d'Estaing, who founded the UDF, appealed to squabbling right-wing politicians who threatened to vote against a resolution on the euro for domestic political reasons, saying they ought to "be present at the rendez-vous of history". The UDF boasts that it has advocated monetary union for 20 years.

The French have a deeply rooted feeling that monetary union was a French idea, dreamed up to anchor Germany in Europe. They credit the late Foreign Minister, Mr Robert Schuman, who 48 years ago proposed economic co-operation between France and Germany to prevent further wars between them. May 9th, the day of Mr Schuman's declaration, is celebrated in France as the Day of Europe.

If the right-wing president and left-wing prime minister were not so united on monetary union, France would not be so adamant in its demands for the office of governor of the ECB. But some opposition to EMU continues on the fringes of both left and right, from the communists and the extreme right-wing National Front.

A handful of mainstream politicians, including the Interior Minister Mr Jean-Pierre Chevenement and the former Interior Minister Charles Pasqua, also oppose it on the grounds that it undermines French sovereignty.

That both Messers Chirac and Jospin were late converts to monetary union says something about the country's faint misgivings. "The participation of France in the great European adventure remains more a question of reason even resignation than passion," Mr Pascal Aubert writes in the economic daily La Tribune.

"The feeling prevails among our neighbours that, like our highest-ranking leaders of the hour, our country has chosen the euro and Europe by default."

Mr Chirac never evokes his euro-skeptic days now. In his televised address to the nation on April 16th, the French President said the euro would enable Europe to become "the greatest power in the multi-polar world of tomorrow". Like Prime Minister Jospin, he rejects calls for a referendum on EMU on the grounds that the French approved monetary union in the 1992 referendum on the Maastricht Treaty.

Mr Jospin explained the lack of public debate in France in a recent interview with Le Monde. "Everyone's position has been known from the beginning," he said. "And since there are no surprises, there will be no drama." France's unimpassioned approach to EMU did not prevent the Prime Minister alluding to his own past doubts in an April 21st address to the National Assembly.

He regretted that the text of the Maastricht Treaty had not been adequately debated. "One could ask questions about the method chosen to advance the unity of Europe, a method that gave priority to monetary questions and an insufficient place to the fundamental question of employment," he said.

Mr Jospin is concerned that EMU and the ECB should not be a German-dominated technical process that neglects social policy. That is why he has campaigned for an "economic government" and a "social Europe".

Mr Jospin argues that his four conditions for EMU are being fulfilled: the participation of Italy and Spain; that the euro not be over-valued against the dollar; a solidarity and growth pact to balance the Germans' austerity pact and finally an "economic government" alongside the ECB.

During last week's debate on the euro in the French parliament, the leader of the opposition Rally for the Republic (RPR), Mr Philippe Seguin, attacked Mr Jospin on the last condition, saying it was unfortunate that the government "had not obtained the indispensable counterpart to the technocratic power of the European Central Bank."

At last November's Luxembourg Summit, France obtained the establishment of a "Euro X Council" to co-ordinate budgetary and fiscal policies among the finance ministers of the 11 EMU states. The Euro X Council had "no power", Mr Seguin lamented.

Among the ruling socialists, the economics minister, Mr StraussKahn, has made the most convincing and detailed arguments for the euro. "The single currency will be a major advantage for the competitiveness of our businesses," he said recently. "By stabilising currency, the euro will enable us to maintain low interest rates that favour growth and investment."