The Temptation of Protectionism

I think most French would agree that the presidential election debate has been pretty poor since its beginning in February. No nuances, small media stories turned into polemics, little content overall – all very frustrating for those who enjoy a decent confrontation of ideas on what matters for the country. If you missed the saga of halal meat labelling (no joking), feel lucky.

Up until now, the role of France in the EU had been more or less absent from the debate. We had heard little about what any of the serious candidates would do in Brussels, with the exception of François Hollande, who said he would renegotiate the EU Fiscal Pact signed by 25 Member States at the European Council earlier this month.

On Sunday I was in Villepinte, north of Paris, to listen to Nicolas Sarkozy for what was announced as his first very big “meeting” (ironically that’s how we call political rallyes in French). Probably under the influence of Henri Guaino (his special counsellor who voted against the European Constitution in 2005), his speech contained far-reaching proposals in connection with the EU. Sarkozy is of the opinion that the divide between the ‘pro’ and ‘anti’ Europe is more significant in France than the right/left divide (based on unidentified polls).

Sarkozy promises to submit several proposals to the European Council: he first wants to reform the Schengen Treaty, introducing reinforced border controls, the possibility to exclude a country and political governance for the area. If within a year Schengen rules are not tightened, France would take a unilateral decision to leave the Schengen area. Funnily enough Sarkozy had already raised the issue last year following the Arab Spring and work is already underway to amend Schengen rules.

The other idea Sarkozy wants to introduce at EU level is an obligation to reserve large public procurement to European companies or companies manufacturing in Europe, replicating the US ‘Buy America Act’. “If the US, the most liberal country, does it, we can do it as well”, he justified. France would also also decide to unilaterally apply the idea should it not be popular amongst other Member States. While France under Sarkozy had so far spearheaded EU reforms (with Chancellor Merkel), in these conditions it would certainly turn into a difficult member, an outsider that is more a problem than a solution. The proposal on public procurement would have large consequences for non-EU companies. Third countries would be tempted to introduce retaliatory measures, potentially even more damaging for the EU. At a time when the EU ETS (Emissions Trading Scheme) is considered as a market distortion measure by third countries and that a trade war is threatening European airlines and aircraft manufacturers, it’s unlikely that Member States will agree to embark onto such a overtly protectionist measure.

As a believer in European integration and free market I’m naturally sceptical towards these attempts to build a ‘fortress Europe’, a continent that would have no other choice to maintain growth than to isolate itself from free movement and free trade. But it’s not just Sarkozy: none of the candidates really support a free market approach. I’m even more worried about Sarkozy’s new ‘Blame Brussels’ attitude. His comments about “the technocrats and tribunals” of the European Union are typical of candidates looking for scapegoats outside their national territory when they have run out of solutions to propose.


NB: French colleagues at Fleishman-Hillard will regularly contribute to Public Affairs 2.0 until 6 May to provide their views on the French presidential elections and their likely impact for the EU – you’re welcome to join the debate!


The EU Lobby
March 13, 2012 | 11:37 AM

It seems to show that Sarkozy is seriously worried about the elections, and the only way forward is to attract potential Le Pen voters. Moreover, it seems the scheme has worked, since he is now leading in the polls for the first time (although still to lose the 2nd round). Once in power however, The Lobby would be surprised if he went through with his threats on Schengen and procurement. This is populist politics, the lowest common denominator, but if it gets him elected he and his party won't care a jot.