Is EU Right to Grant More Flexibility to France on Budget

This is published by Carnegie Endowment Europe


Denis MacShaneFormer UK minister for Europe

France compares itself with two nations in the EU. Across the Rhine, Germany. Across the Channel, Britain. In German, the word for debt and guilt is the same:Schuld. In French, as in most other languages, there are two separate words. The view that to be in debt is to be guilty belongs to Germany, not to France or Britain.

In fact, France must look with longing at the guilt-free manner in which Britain has run up debt and deficits and ordered the Bank of England to print more money under the euphemism of quantitative easing. The result is clear: the UK’s levels of growth, employment, and tax revenues are better than France’s.

With Britain decoupling from the EU’s Common Foreign and Security Policy, France now shoulders most of the burden for EU defense within NATO—unlike Germany, which spends half as much as France does, as a share of GDP, on common security and defense.

Moreover, Berlin’s vision of virtue is one in which every nation exports and enjoys massive trade and current account surpluses. But without indebted, importing nations like France, who buys German goods? The EU is waking up to the fact that bleeding a patient until he dies is not successful medicine, whatever the textbook says.

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