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Eurogamble.

Europe may not see its single currency before the end of the millennium. The carefully planned timetable for the euro is threatened by elections. The main danger does not come from John Major, who, to save his electoral skin by May 1, has at tacked Europe and branded Tony Blair as soft on sovereignty. Major looks the loser and Britain, an outsider, is not a key figure in monetary negotiations. Paradoxically, the main threat to unity was sprung by French President Jacques Chirac, who, with German Chancellor Helmut Kohl, is the chief sponsor of the European Monetary Union and who is staging a snap election on May 25 on the premise it will strengthen France in its European purpose. The snag is that this poll is for him and for Europe a sizable gamble.

France, like other candidate nations, must introduce harsh austerity measures to reduce this year's budgetary deficit below the required 3 percent of its gross domestic product. To hold the election next year, when the painful effects of that policy would be felt, is to court disaster. Chirac chose to have the battle now, hoping to save a narrow parliamentary majority. He will not run this campaign, like the presidential one two years ago, as the progressive enemy of the "social fracture." This time he will follow in Reagan's footsteps as tax-cutter and scourge of state spending, remaining discreet on the social cost of such a policy. When his Prime Minister tried to reduce the welfare bill in 1995, Paris was paralyzed by strikes and the provinces shaken by mass demonstrations.

That winter of discontent had an impact on the Socialist leader too. Lionel Jospin is still in favor of the euro, though with decreasing enthusiasm. He does not see the 3 percent of G.D.P. requirement or the 1999 starting date as categorical imperatives and is unwilling to suffer new austerity measures. He argues that Europe's financial policy should not be shaped by bankers beyond political control, and that control is not imminent. Fighting skillfully on this line, Jospin could rally the left, win the election and face Chirac with the awkward prospect of cohabitation.

The timetable for the euro looks threatened from all sides, in fact. Germany, too, has troubles with its budget. Bonn, keen on a strong currency, is also openly hostile to the admission of Italy and Spain as early members of the union. If an orthodox Chirac were defeated by the reluctant Jospin, the whole scheme would be put off, if not till doomsday, then to the next millennium (a prospect apparently favored by Clinton's advisers, who want Europe relatively united but not highly competitive). But for the Europeans the whole operation has a deeper meaning. It was conceived as an attack on the welfare state first and on real wages afterward, in an attempt to spread the American model." For the European left, therefore, the task is not simply to slow down the process. It is to outline alternative solutions at both national and European levels. In this respect, Britain's confrontation between Tweedledum and Tweedledee will be of no help. France's uncertain battle is apt to prove much more instructive.

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Title Annotation:French politics may determine the future of the European Monetary Union
Publication:The Nation
Article Type:Editorial
Date:May 12, 1997
Words:530
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