Thursday, March 26, 2009

Europe view 124--time to boycott France?


Plus rien de français?
Mar 26th 2009

Skoda, blancmange and the price of principle

FRENCH politicians seem to see no benefit from economic integration with eastern Europe. The industry minister wants to “repatriate” jobs from Slovenia. President Nicolas Sarkozy says it is unacceptable that French manufacturers make cars for the French market in the Czech Republic.

That may just be rhetorical pandering to the protectionist views of the French public. But it is still offensive to the east Europeans, and could prompt a severe response—such as a boycott of French-made products.

Since 1989, the ex-communist countries have played by western rules. They have stabilised, privatised, liberalised, and opened up—the kind of wrenching economic reform that is the stuff of nightmares for the cosseted workers of old Europe. True, the easterners could have gone further (especially in reforming public finances, state bureaucracy and education). With pitifully little debate, they had to swallow a colossal (and largely French-drafted) European rulebook, with an array of stupid and unpleasant rules and penalties for breaking them, on everything from sugar prices to school kitchens.

While countries such as Britain sit neurotically on the sidelines, the new members yearn to gain admission to EU clubs such as Schengen (visas), Prüm (policing) and of course the euro zone.

That was in these countries’ own interest. Paying a price to be in the clubs that matter was better than staying outside. Yet the easterners’ feel their enthusiasm and cooperativeness have met little gratitude in the west. Their occasional bouts of chippiness and clumsiness are blown out of all proportion. The failure of Romania and Bulgaria to meet anti-corruption targets has tainted the whole region’s image. The Atlanticist loyalties of the new members have been mocked and distrusted.

France was in the forefront of such criticism, and also led the resistance in “old Europe” to the extension of the single market to labour and services. The new member states are still second-class citizens of Europe when it comes to working abroad or exporting their brainpower.

Now France is close to a head-on clash with the fundamental principles of the single market in goods. The next stage could be preferential treatment of domestic producers in government tenders. After that, it is easy to see a slide towards real protectionism in Europe. With the economic glue that holds the EU together weakening, the political links will fray too. In a race to the bottom, the biggest and richest countries will do best (or least badly). The poorer and smaller ones will be left humiliated, impoverished and resentful.

It would be rash to rely on the competition directorate and EU law to stop this dangerous drift. Much better would be to apply a sharp dose of economic pressure. Stroppy French workers may not realise it, but the ex-communist countries are one of their country’s biggest export markets. Renault, for example, sells more than 1m vehicles in eastern Europe. In 2008, France exported €21 billion ($28.5 billion) to the new member states of the EU (compared with €23 billion to the United States).

Boycotting all “French” goods would be a blunt instrument. Many French-badged cars are actually made in places like Poland. And many French-made products are not easily substitutable (Lithuanian šampanas has its charms, but even its die-hard fans don’t quite consider it an alternative to champagne).

But a slogan on the lines of “Aux armes, citoyens de la nouvelle Europe! Plus rien de Français!” would deliver a timely message. Georgian wine, Hungarian foie gras, Polish salami, Skoda cars, Italian fashion and skiing in Slovakia are all alternatives to the French-made offerings. Even—if you want to be really insulting—British cuisine.

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