But a majority of the French want out of the EU too!
By Don Quijones, Spain & Mexico, editor at WOLF STREET.
As support for a British exit from the EU strengthens, at least according to the latest polls that give some people whiplash, policy makers on both sides of the English Channel are finally beginning to think about the days, weeks and months after June 23. Some countries, such as Germany, seem more inclined to favor a soft, pragmatic approach in the event of a Brexit, while others, led by the government of France, are calling for a more punitive response.
As originators of the phrase “Pour encourager les autres,” (to encourage the others), it is fitting that France is leading calls for Brussels to punish the UK if its public has the temerity to vote to leave the EU. Among the measures under discussion are to expedite Britain’s removal from all EU treaties rather than let negotiations drag on, as well as restrict the “passporting” of financial services, which allows foreign-owned companies to do business with the EU via offices located in Britain.
“I would be very tough [on this point],” said Sylvie Goulard, a French MEP who sits on the committee for economic and monetary affairs. “I see no reason to give passporting to a country that decides in a sovereign way to leave the EU… The day the U.K. leaves … you cannot consider the British supervising authority as an authority of the EU.”
Such a response could have a devastating impact on the UK’s core industry, financial services.
The City of London financial district is the place with most at stake in the Brexit debate. Its two biggest rivals, Paris and Frankfurt, are vying to take a piece of the action. If Britain left the EU, member countries might re-evaluate whether to recognize clearing houses such as LCH.Clearnet, and may push to force all clearing houses to be based inside the EU — as the European Central Bank has already suggested should be the case [Who’s Really Most Afraid of Brexit? And Why?].
A Britain-less EU might even try to draw business away from the City of London. “I can tell you there is already intense thinking about creating a financial hub on the Continent,” said Elisabeth Guigou, Socialist head of the foreign affairs committee in France’s lower house National Assembly. The fact that Frankfurt is home to the European Central Bank’s lavish headquarters makes it the most likely contender but that won’t stop Paris from laying claim to its share of the spoils.
But ultimately it’s not opportunism that is driving the French government’s calls for a hardline approach to a post-Brexit Britain; it’s fear. A vote to leave the EU has the potential to unleash a mass stampede towards the EU’s doors — doors that as yet do not open from the inside. The French government would clearly like to keep it that way.
“If we say you are outside the EU but can keep all of the advantages, access to the single market without any solidarity, it’s a terrible message for the rest of the EU,” a senior EU diplomat told Politico. “A painless Brexit is impossible if we want to keep the rest of the EU present.”
If Pew’s latest Pan-European poll is any indication, the government’s sentiments are hardly representative of the French population at large. In fact, a staggering 61% of French respondents indicated they would prefer to leave the EU — more than any of the other member states surveyed and 13 percentage points more than the UK. A clear majority is opposed to “ever closer union” and wants powers returned to the French parliament, a finding that clashes starkly with President Francois Hollande’s dogged insistence that “more Europe” is the answer to the EU’s woes.
“It is a protest against the elites,” said Professor Brigitte Granville, a French economist at Queen Mary University of London. “There are 5000 people in charge of everything in France. They are all linked by school and marriage, and they are tight.”
As France continues to tighten the fauxsterity screw, at Brussels’ behest, opposition to both the government — already the most unpopular ever — and the EU is almost certain to rise. French protests against the government’s labor reforms continued to rage on Thursday, less than 24 hours before the Euro 2016 soccer tournament kicks off. Once again, Air France pilots are on strike, forcing the company to cancel at least 30% of its flights; so, too, are workers at three of Total’s five refineries and garbage collectors in Paris and Marseilles, leaving the curdling stench of rotten, uncleared garbage to waft through parts of the cities.
In many ways, France was always going to be the EU’s biggest stumbling block, as fauxterity spread from the Eurozone’s southern periphery toward the center. And while some of the labor reforms are perfectly justifiable, Hollande doesn’t command the authority, respect, and public support needed to push them through.
As The Telegraph notes, Hollande is a victim of his own campaign rhetoric four years ago, when he sold 1970s nostalgia and pledged plans to raise public spending:
“Finance is my enemy,” he said. But he failed to grasp the nettle of reform in the first months of his presidency. His credibility is now so low – with 84% expressing a “total lack of confidence” in the latest TNS-Sofres poll – that France is effectively stuck in limbo.
And that’s where it’s likely to stay until either the government or the people break the deadlock. In the meantime, the inexorable countdown to the Brexit vote continues. If the Leave campaign wins, things could very quickly spiral out of control. According to George Soros, the hedge fund billionaire who broke the Bank of England 24 years ago and is once again out of retirement, a British exit could “unleash a general exodus, and the disintegration of the European Union will become practically unavoidable.”
Any attempt by the French government to make Britain suffer as a consequence of that vote is unlikely to change that fact, especially as the French public itself loses faith in the European dream. Indeed, even if there is no Brexit, it seems that France’s problems have only just begun. By Don Quijones, Raging Bull-Shit
Even the staunchest eurocrats are beginning to express doubts. European Parliament Chief Martin Schulz had warned over a possible “implosion of the EU.” But now, the eurocrats are not just falling into despondency and despair, they’re beginning to turn on each other. Read… “The Specter of a Break-up Is Haunting Europe”
Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.