Walker's World: France has nowhere to go

By MARTIN WALKER, UPI Editor Emeritus  |  July 2, 2008 at 8:00 AM
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PARIS, July 2 (UPI) -- French President Nicolas Sarkozy has a terrible sense of timing. He was elected last year, full of bold promises for sweeping reform of France's bloated pensions and public service and its clogged labor markets.

But the financial crisis began almost at once to narrow his options. Reforms are easier in times of growth when tax revenues are buoyant and unemployment is low.

And now Sarkozy this week took over the revolving Presidency of the European Union, once again with grand plans for sweeping reform of its defense and security strategies, its policies on immigration and asylum, and farming and trade.

But even though the Eiffel Tower in Paris was brightly lit with the blue and gold stars of Europe's flag, it was a defensive Sarkozy who addressed the French people this week as France became Europe's capital.

"Things are not going well. Things are not going well at all," Sarkozy said in an hourlong appearance on France 3 TV. "We have to think about how we can make this Europe a means to protect Europeans in their daily lives.

"We must not be afraid of this word -- 'protection,'" he went on, suggesting that Europe's people wanted to be safeguarded against the risks of globalization. But at the same time, Sarkozy added, he knew that Europe was not popular.

"Europe worries people and, worse than that, I find, little by little our fellow citizens are asking themselves if after all the national level isn't better equipped to protect them than the European level," he said.

The reason for his low-key and uncharacteristically somber approach is that yet again, Sarkozy was capsized on the way to his moment of EU glory. This time it was the Irish "No" vote in their June 12 referendum on the EU's new Treaty of Lisbon, which was supposed to give the EU a permanent president and foreign minister, which meant a real common foreign and security policy.

Sarkozy thought he would be perfectly placed to control that process and become the voice of a Europe that seriously counted on the world stage. Instead, he is supposed to try and rescue the EU from the Irish by forming a new consensus that might let the Lisbon Treaty survive. This looks difficult, since the Polish president has now said that after the Irish vote, it would be pointless for him to sign the treaty.

So instead of grandiose themes of foreign policy, Sarkozy found himself talking about cuts in EU sales taxes to help restaurants and environmentally friendly industries, and at the same time cutting taxes on gasoline.

He took on two targets. The first was the European central bank, which he thinks is too independent, and he wants it to cut interest rates when it meets this week. Instead, the bank has sent a strong signal that it will raise them in order to curb inflation.

Sarkozy's second target was Peter Mandelson, the EU commissioner for trade who keeps trying to get the EU to sign up to the Doha Round of world trade talks. Since any trade deal would mean reforming the maximum-income-for-French-farmers Act, formally known as Europe's Common Agricultural Policy, this would happen only over Sarkozy's dead body.

Sarkozy has found Mandelson to be a useful foil and hate figure, blaming him for the Irish "No" vote by frightening Irish farmers. (In fact, the Irish majority was far greater than the number of Irish farmers). The French president vowed to block a proposed new agreement at the World Trade Organization that was backed by Mandelson and Pascal Lamy, the WTO's secretary-general, claiming it would reduce the EU's agricultural output by 20 percent and its exports by 10 percent and put 100,000 people out of work.

Sarkozy argued this week that the latest rise in food prices and the shortages in Asia meant that Europe's farming needed more protection and more highly subsidized production rather than opening Europe's markets to more food imports.

"In a world where there are 800 million poor people who cannot satisfy their hunger and where a kid dies every 30 seconds from hunger, I will never accept a reduction in agricultural production on the altar of global liberalism," Sarkozy said.

"Global liberalism" is how the French define the free trade and free market capitalism of the United States and Britain, which is deemed to be heartless and socially unfair. But at the same time, Sarkozy made it clear he was not going to do the developing world any favors in trade and if they wanted access to EU markets, they would have to pay for it. The EU must insist on "reciprocity" in its dealings with developing countries, he insisted, and they were not doing enough to lower their own tariff barriers for industry and services.

"I believe in Europe. I am profoundly European. I refuse protectionism but I have had enough of naivety and I want reciprocity," Sarkozy said. "Europe must fight with equal arms."

Sarkozy's defensiveness and his theme of using the EU to protect Europeans from globalization reflect a widespread mood. Five years ago 61 percent of French voters told pollsters that Europe was "a source of hope." In a June 29 poll for Ouest-France, Frances top-selling newspaper, only 30 percent said they felt that way today.

The French government seems to agree. Foreign Minister Bernard Kouchner told reporters this week: "No one understands (Europe's) institutions and no one is interested in them. Even I don't. When Europe can't do anything about high oil prices, Europeans are not bothered about another reform treaty."

Meanwhile, the latest official Eurobarometer poll shows that 32 percent of people in Britain think that EU membership is a bad thing, 30 percent a good thing and 30 percent neither. Half of those polled say that the United Kingdom has not benefited from EU membership, the highest negative score since 1983.

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