"The French state in the Euro zone: 'Modernization' and legitimizing dirigisme in the 'semi-sovereignty game'"

Howarth, David. (2001) "The French state in the Euro zone: 'Modernization' and legitimizing dirigisme in the 'semi-sovereignty game'". In: UNSPECIFIED, Madison, Wisconsin. (Unpublished)

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Abstract

This paper [examines] the discursive structure underpinning and shaping the impact of EMU upon French state structures, policy regimes and policies and French strategic responses to the operation of the EMS and EMU. This discursive structure is shaped principally by a conservative liberalism and a rear-guard interventionism. State reforms and strategic behaviour of French policy makers in the Euro zone reflects the dialectic between these ideologies. The operation of the EMS and the EMU project has provided French governments a justification for "modernizing" reforms and state withdrawal from interventionist strategies sought for other reasons, crucially European competition rules and the impact of globalisation and the comparatively heavy reliance on foreign capital (both public and private sector debt). Participation in the EMS and the EMU projects over the past fifteen years has encouraged financial market liberalization, budget reform, including the reform of the social security budget and the structures controlling this budget, fiscal reform, increasing labour market flexibility, and privatization. Monetary power motives encouraged the French to embrace EMU as a means to share control over monetary policy with the Germans. However, core elements of the EMU project- notably central bank independence-were directly contrary to the French republican tradition. French governments-particularly the current Plural Left government led by Lionel Jospin-have sought to qualify the application of "sound money" policies by advocating developments at the European and domestic levels that correspond to the strong French interventionist tradition and thus improve legitimacy in the eyes of public opinion wary of the modernizing reforms made more necessary by international constraints.

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