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European economic governance

Published on August 8, 2011
Excerpts from the article by Jean Leonetti, Minister responsible for European Affairs, published in the “Le Figaro” newspaper

Paris, August 3 , 2011

Europe’s economic government: don’t leave things half done

On 21 July, thanks to President Sarkozy’s impetus, Euro Area heads of state and government took the necessary steps to rescue Greece from bankruptcy and put in place stronger European mechanisms to avoid any contagion effect. The decisions taken are exemplary. In addition to the balanced and wide-ranging Greek aid plan, the decisions taken on 21 July lay the foundations for a “European Monetary Fund” capable of reacting swiftly and preventively.

Even so, who can say that all danger has been averted? Should we not go even further? When it comes to economic governance in Europe, as elsewhere, things must never be left half done.

We created the euro. We must not forget the practical advantages we gain from it: purchasing power is protected thanks to moderate inflation, historically low interest rates are encouraging investment, and our companies are benefiting from easy access to the internal market, because the foreign exchange risk has gone. The French have clearly understood this and are deeply committed to the euro. Vague desires for a return to the franc are neither realistic nor constructive.
They are populist and ignore the real consequences of such a decision: the ruin of our economy and pauperization of French people.
But if having a single currency is a great opportunity, it also entails obligations. Firstly, a duty of solidarity: to rescue Greece is to defend our currency. Secondly, greater common economic and budgetary discipline: the present crisis is not so much a crisis of the euro as a consequence of the different national policies conducted at the beginning of the 2000s. (…) Finally, a real single market: possessing the euro without exploiting our internal market’s full potential would be fatally incoherent. Supporting the financing of SMEs, easing their regulatory obligations and encouraging the development of the digital single market in Europe, as proposed by Michel Barnier, are all urgent initiatives I shall resolutely support.

The necessity of an economic government of the Euro Area, which President Sarkozy was the first to mention, is now recognized by everyone. Following on from this, Nicolas Sarkozy has announced joint proposals with Angela Merkel on strengthening the economic government of the Euro Area after the summer break.

It is now obvious: the world today is not the same as 10 years ago. We must adapt to this reality even more proactively and pragmatically. (…)

Europe has always been built by overcoming crises. It has made spectacular progress in recent months. While we can only welcome the fact that an agreement has been reached between Democrats and Republicans on the other side of the Atlantic, it is equally true that, in many respects, Europe does not suffer from the comparison. France will remain one of the chief architects of this new, less naïve, more realistic Europe capable of protecting us from economic upheavals in order to confront the future more effectively. Europe is an appropriate size to respond to globalization. It is our trump card for investing collectively in innovation, research, the digital economy, new energies and environmental protection – all those sectors that will create the wealth and jobs of tomorrow.

Vague desires for a return to the franc ignore the real consequences of such a decision: the ruin of our economy and pauperization of French people./.

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