Once again European eyes are on France as its government struggles to comply with the guidelines for monetary union and its trade union movement resists the expenditure cuts used to secure them. Yesterday's protests in Paris, and several other major cities, against the resulting unemployment were a sharp reminder that the project of European monetary union, as currently designed, is contested by those who believe its costs are disproportionately loaded against labour not capital, the public not the private sector.
This is not, therefore, joust a French story. The clear political momentum that has built up in recent months to implement economic and monetary union by January 1st, 1999, has driven governments in states as diverse as Belgium, Italy, Germany, Spain, Austria and Portugal to adjust their economic behaviour in order to be among the first group to join the project. Often this has been done with swingeing budget cuts, provoking trade unions to take action along similar lines as that seen in France yesterday, or provoking voters to rally to far right wing parties, such as has happened in Austria and France.
There is no categorical pattern to this transnational movement however, largely because trade unions and social democratic parties are divided about the desirability and feasibility of monetary union, just as are other social and political movements. Many trade unions and left wing parties believe the project is worth pursuing as a priority precisely in order to create an institutional framework that can redress the regulatory balance that capital has established with the European single market and which can better govern the internationalisation of economic life. This is despite the flaws they see in the current design of the monetary union project. It is strictly defined in terms of low inflation and balanced budgets, rather than the expansionary neo Keynesian approach with which many of them have previously been happier.
In France such divisions of opinion are also to be found. There is a discernible shift among yesterday's protestors towards a more rooted criticism of the current model of monetary integration on offer from Brussels. But it remains balanced by the conviction of France's political, administrative and economic elites that monetary union is required to contain Germany's power in a more united Europe. President Chirac and his prime minister, the unpopular Alain Juppe, are excoriated for their decision to give deficit reduction priority over the reduction of social inequality, which was a notable feature of their election campaign eighteen months ago. But it is not clear as yet whether the strike and protest movement will develop the momentum that built up last November and December. The unions are split on such perspectives but because of the high level of unemployment, their membership and morale is low despite opinion polls which show that the strikers enjoy widespread public support.
Such protests and controversies are the very stuff with which new political systems are created. They indicate that the monetary union project is more likely than not to proceed on time, however much its design is found wanting. The penny is beginning to drop, even among sceptics in Britain who have argued up to now that it is still premature to make such a momentous decision.