Review of Jean-Pierre Chevènement’s La faute de M. Monnet: la République et l’Europe (Paris: Fayard, 2006) [1]

by Federica Cittadino, Alberto Di Felice and Noémie Paulus

June 2007

According to Jean-Pierre Chevènement, M. Monnet’s fault was, put crudely, to turn the concept of nation into a demon: “By confusing nations with nationalism, he rejects them viscerally, beginning with his own, but with the exception of the American nation-continent, the only one he judges in tune with the times” (p. 18). Chevènement identifies three wrong premises behind the construction of Europe as envisaged by Monnet and the other founding fathers: “[T]the demonization of Nations, the sanctification of competition, enslavement to the U.S.” (p. 129).
Based on his experience during the two World Wars, Monnet came to the conclusion that a fusion between European states would have been the only way to avoid future conflicts and guarantee development, both in the economic and in the political spheres. [2] As a consequence of this, he conceived an authority independent of national governments, which would pursue the objectives of “liberalization and supranationalism” by means of an “enlightened despotism” (pp. 28–9). Monnet’s method was a response to two concomitant needs: Europe’s dependence on American aid and America’s will to make the European market accessible to its production. This resulted in liberal policies imposed on Member States to develop mass production and enlarge markets. Such policies, in the words of Jacques Delors, followed the “dominant winds” (cited at p. 31).
Chevènement highlights a paradox showing the perverse effects this method has produced. Half a century after the ECSC (the original embodiment of Monnet’s ideas as applied to the coal and steel sectors), Mittal, Indian giant of the steel industry, has acquired Arcelor, European giant of that same industry. More than that, the purchase happened with the support of Thyssen-Krupp—a German company had stabbed its Franco-Belgian-Spanish friends in the back!
As Chevènement puts it: “[T]he mechanics produced by the Treaty of Maastricht yield stalling growth” (p. 54). Compelled within close budgetary bounds—namely, containment of the deficit and public debt—the governments of Europe have no longer been able to freely choose the countercyclical fiscal policies necessary to tackle recessions. In addition, the transference of monetary competences to the ECB has removed the essential tool of controlling interest rates. Both fiscal and monetary policies have therefore been inhibited.
Chevènement holds that politics has become subservient to the market doctrine. Its defeat has led to the demise of democracy. In the words of Pierre Mendès France: “There are two ways for a democracy to abdicate: to surrender its powers to a man or to a commission which will exercise them in the name of technics” (cited at p. 29). In Chevènement’s view, the only political entity where democracy is substantiated is the Nation. To support his argument, he goes back to the Republican ideals of the French Revolution, by showing that they have not removed from memory the history of France, its language and people. He criticizes Habermas and other advocates of “post-nationalism,” which he argues has shown its deficiencies in the light of the recent rejection of the Constitution in the French and Dutch referenda.
Chevènement’s recipe resides in the cooperation of the nations of Europe at an intergovernmental level, most importantly between France and Germany, the forerunners of the so-called “variable geometry.” The role of the Commission is valuable and democratic as long as the powers delegated to it are clearly defined and can be withdrawn. As Chevènement sees it, the main orientation of Europe should be to favor internal growth and social cohesion, in particular within the Euro-zone. The most important step toward this end requires mutual concessions between France and Germany: the former has to abandon the principle of parity with German, and the latter has to relinquish its longstanding deflationist policy, upheld by the ECB. In a nutshell, what Europe needs is a fully-fledged “economic government” based on Keynesian expansionary policies.

The following will focus on parts of the book that the writers regard as particularly salient with regard to matters of economic policy. Other aspects, such as its insistence on auxiliary political solutions (e.g., the building of a “Great Europe” including Russia; a common foreign policy for the Middle East, independent of the U.S.) will not be considered.

The first thing to note is that Chevènement clearly advocates protectionist measures (i.e., State control of businesses and commercial tariffs) to keep the European economies from being harmed by globalization. Consider for example his insistence on the need to support “European champions” in the face of worldwide competition in key sectors such as the aforementioned steel industry, or his strong inclination to reform and preserve the European agricultural model (i.e., the CAP).
Nevertheless, two strong criticisms can be raised at this view. First, it appears that his preference for “European champions” may in fact hide a preference for “national champions,” which could put the internal coherence of the Union at risk. Instead of creating a healthy competition within industries comprising the whole European market, states might start to battle each other by protecting their own national interest groups. Second, any protectionist measure in favor of an industry is in some way countervailed by the sacrifices it inflicts on other producers and consumers. Such sacrifices are easier to justify on a national basis than they are when no bond between those who are negatively affected and those who benefit is in place. “The decisive consideration is that their sacrifice benefits compatriots whose position is familiar to them.” [3] Moreover, and perhaps more importantly, Chevènement seems to completely ignore the positive effects that the absence of barriers would generate for developing countries. It has been estimated that the CAP alone costs 20 billion dollars a year in terms of less exports from developing countries. [4]
Another aspect of Chevènement’s analysis is his unfavorable judgment of post-nationalism as personified by the Commission. This is usually granted consent by a large portion of the public opinion and political commentators alike, as it is associated with the notorious “democratic deficit” and all that it implies. However, his overall conceptualization of the nation as opposed to the technocratic Commission is biased by his own nationality. He gives quite a Gaullist account of what things should be like for the future. Indeed, his recipe closely mirrors France’s historical thirst for Grandeur vis-à-vis the United States. “But even here the only prospect of successfully standing up to the United States was if France could do so with Europe behind it, in particular Germany with its increasing monetary strength.” [5]
While France has always tried to push for expansionary policies, even before the EMU started its monetary freedom was constrained by the action of the German Bundesbank, whose only priority had always been to keep inflation under control. This was not only a consequence of Germany’s importance to France, but most importantly of France’s will not to depreciate in order to preserve its exchange rate against the dollar. In the words of former French Prime Minister Michel Rocard: “It is of this kind of archaism, obstacle to growth, that the single currency will finally liberate us.” [6] France thought that a collective management of a common European currency could give it the power to exert more influence over monetary issues and reverse the long-standing German deflationist policy without depreciating; yet, this assumption proved patently wrong.
Chevènement’s idea of an “economic government” of Europe is based on that same idea: it is mainly Germany that has to allow more flexibility and loosen its strict interpretation of the convergence criteria. Such a project is unsustainable as long as there continue to be heterogeneity among the economies of the Member States and imperfect mobility of factors of production. Insofar as BoP surpluses and deficits linked to foreign demand are not counterbalanced by flexible exchange rates, in a situation such as that of Europe not even a common fiscal policy would yield any effects: policies aiming to combat unemployment would have the effect of increasing inflationist pressures, and vice versa. [7] In addition, experience with countercyclical fiscal policy has been disappointing; in many cases, the lag between identifying the problem and fiscal response has been too long, with the result that a fiscal boost coincided with the next boom, while a contraction might coincide with the next recession. Fiscal policies that are intended to be countercyclical could end up exacerbating the original problems.
Chevènement acknowledges that the EU has reached important results, such as common rules for a common market, a common competition policy (although unfavorable to “European champions”), a common commercial policy, the Euro, etc. As already mentioned, the main element of his recipe for the future consists in expansionary policies on the part of the ECB (see especially pp. 131–3). Evidently, he thinks that policies that in the past have proved ineffective at the national level can now be transposed successfully at the European level. All the same, as we think our foregoing arguments have shown, there lack the necessary preconditions for this to occur.

NOTES

1. References to page numbers will be given in the text in parentheses. The translation is ours. [↩]
2. “To avert a negative peace such as that of 1918 … the economic and political organization of a ‘European entity’ is necessary. … There will be no peace in Europe if the States rebuild themselves on the basis of national sovereignty, with its implications of prestige politics and economic protection. … The countries of Europe are not strong enough individually to be able to guarantee prosperity and social development for their peoples. The States of Europe must therefore form a federation or a European entity that would make them into a common economic unit.” Jean Monnet, cited at p. 24. [↩]
3. Friedrich von Hayek, “Interstate Federalism,” in Individualism and Economic Order (Chicago, IL: University of Chicago Press, 1980), p. 262. [↩]
4. See Federico Bonaglia and Andrea Goldstein, Globalizzazione e sviluppo (Bologna: Il Mulino, 2003). [↩]
5. André Szász, The Road to European Monetary Union (London: Macmillan, 1999), p. 217. [↩]
6. Michel Rocard, cited ibid., p. 218. [↩]
7. See Robert Mundell, “A Theory of Optimum Currency Areas,” The American Economic Review, LI, No. 4 (November 1961), pp. 657–64. [↩]