Reflecting on the dramatic results of France's parliamentary elections, commentators have observed that the result is as much a defeat for the governing right wing parties as a victory for the Socialists, who come to power with the support of Communists and Greens. The point is well taken and has lessons for other European governments and voters. The French electorate was unwilling to extend another five year mandate to President Chirac and his supporters, giving them the sole power to define the crucial transition to the European single currency. It has chosen to balance them with a fresh emphasis on growth and employment, within a framework of power sharing between centre right and centre left parties. Governments throughout the European Union will now have to accommodate these new political realities as they head into a series of the most difficult and far reaching decisions on monetary union.
It is as well to remember that such political balances have always been important determinants of European integration. This factor, together with one other whether the European economy is expanding or contracting goes far to explain how the precise conditions for the transition to the single currency were defined. The Maastricht Treaty which did so was conceived during an expansionary period, in a complicated tradeoff between economic criteria defined by the German centre right and a French centre left determined to share regulatory power over monetary union with a united Germany. The prolonged period of recession and low growth since then have affected popular attitudes towards the single currency project in these two states that drive it, as austerity policies defined by centre right governments became more and more associated with it.
The French election result has broken this political cycle. Ironic ally, there has been a certain convergence of view on economic issues between President Chirac and an opposition that scored points in the campaign by throwing back at him the slogans of social solidarity on which he was elected in 1995. His government proved incapable of explaining the necessity to restructure the economy to prepare for more international competition as well as for the single currency. It ended up as one of the most unpopular since the war, badly miscalculated the timing of the election and then ran an inept campaign.
Mr Lionel Jospin's programme calls for the French economy to be stimulated by a reduction of working hours, the creation of 700,000 more jobs and an end to privatisations. He wants to see Italy and Spain in the first wave of the single currency, growth and employment reprioritised, the emergence of a European economic government and an understanding that the euro will not be overvalued against the dollar and the yen. This is a radical programme, which has raised expectations among Mr Jospin's followers. It will take statesmanship of a high order between him and Mr Chirac and between both of them and their European colleagues to translate it into reality. They will be tested mercilessly by nervous markets and by ripple effects in other member states. This result comes at a particularly difficult time for Dr Helmut Kohl, embroiled in a row with the Bundesbank over revaluing gold reserves.
These events make the economic management task of whatever Irish government is elected this week all the more difficult. It underlines the issue of competence facing the electorate. Preparedness for joining the single currency must continue to be the hallmark of policy. But now there will be renewed uncertainty about the timing of its launch, whether it will be softer compared to the dollar or the yen and accompanied by higher than expected interest rates.