Open Europe Blog

Well, we know that French economic and budgetary souveraineté runs incredibly deep. So that French President François Hollande didn’t react with enthusiam to the European Commission’s new economic policy recommendations to France shouldn’t come as a surprise. This is what Hollande had to say (courtesy of AFP),

The [European] Commission doesn’t have to dictate to France what it has to do. It simply has to say that France must restore its public accounts.

Two quick points:

  1. It may seem that, through statements like these, Hollande contradicts his own call for a “real economic government” for the eurozone. But remember, when France talks about le gouvernement économique, what it has in mind is an intergovernmental structure where member states have the last word – not a supranational one where the European Commission has the power to veto national budgets. Incidentally, the latter is what Germany wants.
  2. In turn, the remarks clearly show how difficult it will be to achieve a eurozone fiscal union. Will France ever accept being bossed around on economic issues – and the type of strict supervisory powers Germany demands for underwriting the eurozone?

As we’ve said before, this is a pretty brutal Catch-22 situation. We keep our eyes open for further reactions. 

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