The French Model of European Monetary Union: Sovereignty, the Eurozone Debt Crisis and the Repoliticisation of the Euro

Abstract

If Maastricht EMU was dominated by the German model, embodying an ordoliberal macroeconomic framework and a preference for depoliticised decision making processes, since the onset of the euro crisis in 2010 this model has been increasingly subject to contestation. At the heart of this contestation has been an alternative conception of EMU broadly based on what can usefully be conceived as the French model. The French model conceives EMU principally in strategic terms as a macroeconomic entity subject to political management. As such, it emphasises the efficacy of politicised or chartalist control over monetary as well as fiscal policy (Bibow 2013a; Buller and Gamble 2008: 264; Henning 2007; Howarth 2008: 117–20, 125–7). As briefly noted in the previous chapter, the emphasis on political control is evident in the longstanding French demand for a ‘gouvernement economique’ to overlord EMU and provide it with strategic macroeconomic guidance and coherence (Howarth 2008: 125–7; Wessels and Linsenmann 2003: 64–5). Reflecting this, the French model favours decision-making by the European Council as well as the strengthening of the policy authority of Ecofin vis-à-vis the ECB. The Maastricht Treaty itself contained elements of this alternative focus on economic government notably by subordinating the ECB’s executive board to a broader governing council, and in subjecting the euro exchange rate - the euro’s primary external dimension - to ‘strategic orientation’ as discretionally determined by Ecofin.