France: A Cavalier Insider?

Most French political leaders of the centre-left and centre-right had rather ambivalent attitudes towards the Economic and Monetary Union (EMU) project. On the one hand, EMU was seen as desirable to share monetary policy power with the Germans. On the other hand, the institutional design of EMU was considered highly problematic, notably independent central banks and the lack of an 'economic government' at the EU level to dialogue with the European Central Bank and to counter balance the bank's emphasis on sound money. The constraints imposed upon national policy-making were also considered excessive. Despite this flouting of the EMU rules, French governments have continued their active push to construct 'Economic Government', which has involved managing the 'hard' coordination of fiscal policy but also reinforcing the 'soft' coordination on employment and macro-economic policies through the Luxembourg, Cardiff and Cologne processes and the Lisbon strategy. However, there is already considerable pressure on France and Germany coming from the Commission and the smaller more virtuous euro area countries, like Finland and Austria. The Swedish 'No' vote simply contributes to this pressure.