Implications of the “Non” revolt

cnfrench31.jpgThis Telegraph article provides a nice summary of the potential implications to French business interests of the vote over the weekend by French voters to reject the proposed European Union constitution.
The French left’s vote heavily influenced the election, with two thirds of the Socialist base voting no, including over 70 per cent no vote levels in hard-Left strongholds such as Calais. French employers are clearly worried about the implications of the vote, which they believe will stymie employment reforms that would allow the French economy to become more competitive with the U.S. and emerging economic powers such as China and India.
By the way, Marginal Revolution’s Tyler Cowen notes in this post that it’s already not easy to find a plumber in France.
Meanwhile, Forbes Paul Maidment provides this insightful summary of the political implications of the vote, including this observation:

The French campaign united some strange political bedfellows. Witness the Trotskyite far left making common eurosceptic cause with the conservative right, The “no” camp was also boosted by the unpopularity of President Jacques Chirac and the cautious economic reform-minded Prime Minister Jean-Pierre Raffarin, both advocates of the draft constitution.
But the pre-vote polling reflected a growing mistrust of Europe’s institutions, not confined to France, we should note, as well as wider economic and social anxieties. The proposed EU constitution was attacked by its French opponents for being an Anglo-Saxon neoliberal document that threatens the integrity of the French social economy. (In the U.K, of course, the constitution is mainly opposed because it is a Franco-German neo-statist document that threatens the integrity of the British market economy.) So caution is required in interpreting the outcome of Sunday’s poll.

And, Jane Galt of Asymmetrical Information sums up the implications of the vote this way:

I’ll tell you what is a big deal for the EU, though: the euro. The disparities between euro-zone economies are not shrinking as everyone had hoped; in some places, they’re growing. That is making it nearly impossible to craft monetary policy that is both hawkish on inflation, and doesn’t throw huge economies (i.e. Italy and Germany) deeper into the slough of economic despond. Italy, meanwhile, is managing to disprove the adage that “inflation is always and everywhere a monetary phenomenon” by having stagflation, a recession, and an inflation hawk at the monetary helm. If the euro falls apart, it could have major repercussions for the EU, as it would be a full scale retreat from “ever-closer union”.

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