Will French Socialists kill EU reform?

The Independent (London)

November 29, 2004, Monday

With a critical vote looming, the Socialists of France have a powerful say in the future of the planned European constitution. They could skewer the reforms Tony Blair has backed writes John Lichfield

THE SCENE is a social centre in a council housing estate on the edge of Nevers, beside the Loire, close to the centre of France. The lights are blindingly bright. On the blue and grey walls are Christmas decorations and Socialist Party posters from the European election campaign last June. The posters say: "And now for a social Europe".

There are 200 people in the hall, aged from 38 to 70, a typical enough gathering of provincial French Socialist activists. The men wear leather jackets and beards without moustaches. The women have spiky, dark red hair and wear mauve or deep pink jumpers.

It is a middle-class gathering, with many teachers and civil servants and insurance agents (lots of insurance agents). Most French, blue-collar workers abandoned the Parti Socialiste for the far right or the far left long ago.

The audience is pleasant, friendly, thoughtful but also excited and troubled. The meeting has been called to discuss a fateful decision which faces all French Socialists in the next few days. By their answer to a simple question of "oui" or "non", the Socialists will decide the future of their own party and, quite possibly, the European Union.

On Wednesday the 120,027 paid-up members of the Parti Socialiste will vote in an internal referendum to fix the line of France's main opposition party in a national referendum on the proposed constitution for the EU.

If the party votes against the constitution next week, France will almost certainly vote against it next year (most of the rest of the French left and part of the right is already fiercely hostile). If France votes against, then the European constitution - painfully negotiated over three years - will be as good as dead, long before Britain or most other EU nations give an opinion.

It is inconceivable that the EU constitution could survive rejection by such a geographically, historically and economically vital country as France.

In other words, the treaty loathed by the Eurosceptic British right, which streamlines EU institutions and decision-making and gives Europe a constitution for the first time, could be blown out of the water by the supposedly Euro-enthusiastic, French centre-left. The implosion of the treaty would plunge the newly enlarged Europe of 25 nations into a deep crisis from which even the crisis-stricken EU might find it hard to escape.

Nevers, in Nievre in western Burgundy, was once part of the political fiefdom of the Euro-passionate, late president Francois Mitterrand, the architect of the Parti Socialiste and one of the fathers of the euro.

Could the Socialist "militants" (activists) of Nievre, of all places, vote against a treaty which The Daily Telegraph editorial page regards as a French-inspired, federalist-statist-socialist conspiracy? Could the "Old Labour" wing of France's socialists accidentally extract New Labour's Tony Blair (a man they detest) from a potentially humiliating European referendum in Britain in 2006?

The moderate Socialist Party leadership, pro-treaty with one crucial exception, believes that the party will say "oui" - just. The Renseignements Generaux, one of France's equivalents of MI5, which conducts opinion polls of its own, has warned that the "non" camp may yet triumph. The star guest at the Nevers meeting was a man who has bet his entire political future on a "non". He is the only member of the party's senior leadership to reject the new treaty.

Laurent Fabius, 58, the deputy leader of the Parti Socialiste, has the looks of an Italian crooner, with a flat-topped, balding head and a Roman nose. He prowls up and down the hall, like a chat-show host, trying to live down his reputation as a man of the managerial elite, rather than the people.

He, above all men, should be able to explain how the proposed EU treaty turns out to be an Anglo-Saxon, ultra-capitalist plot. He tells the audience that, in effect, it is all the fault of Tony Blair.

M. Fabius was once a devout European. He was once, at the age of 38, a moderate, market-oriented prime minister (1984-86). He used to like to say that he was a Blairist before Blair. It is not a boast that he makes any more.

The Downing Street press office should tape the Fabius stump speech and issue it as a press release.

Almost everything that is bad about the proposed EU treaty - the fact that it will "prevent the harmonisation of taxes" in Europe; that it will "block" an EU defence policy; that it will prevent the emergence of a powerful, united EU to counterbalance the US - M. Fabius attributes to changes in the text imposed by Mr Blair.

Although he was ultimately acquitted, M. Fabius's career was derailed by an interminable criminal investigation into his alleged role in allowing Aids-contaminated blood to remain in French blood banks for commercial reasons.

His critics within the Parti Socialiste say he is an ambitious man who lacked a power base; a man who is determined to make up for lost time. By saying "non" to the European constitution, he has reconstructed himself as a man of the left. If the "non" camp wins next Wednesday, M. Fabius will, at one bound, leap ahead of the queue of centrist or managerial candidates for the Socialist presidential "nomination" in 2007, including the party's honourable, intelligent, but uncharismatic leader, Francois Hollande.

If the answer if "oui", M. Fabius will fall flat on his face.

Holding up the offending document in Nevers, M. Fabius asked. "Have you read it?" He puffed out his cheeks in distaste. "It's not Victor Hugo, eh?"

Apart from its poor literary style, M. Fabius has four main objections to the treaty negotiated in the "convention" chaired by the former French president Valery Giscard d'Estaing:

The constitution is "conceived for an unlimited period" and can only be amended by agreement of all 25 governments and parliaments. This means, M. Fabius says, that all hopes of progress towards a "Europe Puissance" or a powerful, united Europe are frozen. (His critics within the Parti Socialiste point out that this is the fifth EU treaty in 18 years and likely to be no more definitive than the others.)

The third section of the constitution lists all EU policies - from fish to regions - and constantly uses such wicked ultra-capitalist words as "markets" and "competition". A list of policies, rather than principles, has no place in a constitution, M. Fabius says. (The "oui" campaigners point out the offending words and policies in section three are a restatement of past treaties, negotiated by, among other French socialists, M. Fabius.)

The article on European defence policy states that the Nato alliance remains Europe's primary military shield. M. Fabius says this blocks an EU defence policy. His critics say that the reference to Nato is a statement of fact and the treaty goes further towards EU defence than ever before.

The constitution preserves the national veto over all EU decisions on tax and social affairs. M. Fabius says that this will prevent harmonisation of tax and social policy. You cannot, he says, preserve a single European market for long, if some countries undercut others with lower taxes and poorer social protections.

This is the nub of the Fabius argument and, to be fair, one that he has long made. France has 30 per cent taxes on company profits, he points out. Estonia has 0 per cent. Wages in the east of Europe are much lower than in France.

"You don't have to be a great economist to see what is going to be the outcome. Five or 10 years from now, what industry is left to us will be gone." Fabius critics in the Parti Socialiste, including the former European Commission president Jacques Delors, say that this is pure demagoguery.

Job relocation is a global problem and one that goes beyond EU tax policy. In any case, what is M. Fabius suggesting? That all EU countries bring their taxation policy in line with France? The contradictions at the heart of the Fabius case were brilliantly skewered in Nevers by a man in his late 30s called Christophe who asked the first question.

France had the highest taxes and social protections in Europe, he said. The great majority of EU governments are right of centre. Even the "left- wing" governments, as in Britain, Germany and Spain, are far to the right of the New Fabius.

"If we allow a majority vote," Christophe said. "It is absurd to think that the others will come in line with us. They will outvote us. The unanimity principle on tax and social affairs is not a threat to us. It is our shield."

To this, M. Fabius waffled for 10 minutes but had no coherent reply.

In a sense, however, M. Fabius is right. The proposed EU constitution is not a socialist document. It is incompatible with the kind of hardline, nationalising, industrial intervention and protection, high-tax policies in which some in the Parti Socialiste still believe. That, however, is an argument which the hard left lost long ago. Every EU treaty since 1957 has been based on free-market and competition principles.

This does not mean, the moderate French Socialist leadership argues, that the EU is incompatible with social democracy, public service and the welfare state. Ask the Danes or the Dutch or the Germans.

For 46 years, the EU has been built on a creative ambiguity (or a contradiction, of you prefer). Free marketeers could believe that it was all about trade and competition and increased prosperity. Advocates of a "Europe puissance" could believe that it was all about creating a powerful, united Europe with a strong voice in the world. Some - and not just M. Delors - could believe in both.

Until now, French Socialists have been persuaded to go along with the liberalism of the EU - the single market, the free competition rules, the independent central bank - on the grounds that it would make a stronger Europe, capable of "defending the European model" against the US and the Far East. The "social Europe" - i.e a Europe built on the French model - would be the next phase, they were told.

When there was an EU of 10 or 15 nations, and when the free market and competition rules were unevenly applied, there seemed little for French Socialists to fear in Brussels. No longer. The recent enlargement of the EU to 25 nations and the stricter application of the rules has alarmed many in France, and not just on the left.

M. Fabius has run his "non" campaign by cleverly pressing against this neuralgic spot: by appealing to a nostalgia for the "Europe of the Six", pre-1973, when continental economies boomed, the European Economic Community market laws were haphazardly applied and France, with Germany, ruled the roost in Brussels.

One of his proposals is that Europe should be divided into three concentric circles: with Turkey and eastern Europe kept indefinitely in some vague "periphery"; the awkward countries, like Britain and Spain and Denmark, in an outer band; and the original six in an "inner core".

The implication is that countries within the central core could press ahead with tax harmonisation and economic planning by political control of the central bank and all the things that M. Fabius complains are not in the constitution.

How the Europe-wide market would survive such a lurch to "socialism in six nations" (even assuming that the other five wanted to go along) is unclear.

His ideas are, however, persuasive to a French left, even the centre left, which has become suspicious about the threats of "ultra-capitalist" globalisation and the "ultra-liberal" policies of the EU.

A brief straw poll of activists at the Nevers meeting suggested that the Fabius line appeals to moderates and hardliners alike.

Regis Fity, 69, a medical research worker, said: "There are a lot of people here who will vote no'. Joining forces with the Germans and a few others, that was fine.

"Now they see all these countries, countries with different traditions and histories and systems and they are afraid that this bigger European Union, this constitution, will swamp our French way of doing things."

Even if the Socialist leadership wins the internal vote next week, such attitudes - on both left and right in France - will make next year's national referendum a close run thing.

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