The Euro 10 Years on…its Father Speaks

 Whether in Strasbourg to promote his latest literary effort Mathilda (its outstanding quality that of its brevity, according Le Monde‘s literary supplement on the day) and dispel the doubts still surrounding his dubious ascension to the French Academy in 2003, no one really knew Valéry Giscard d’Estaing’s true intentions in town. But he was certainly on much surer footing at the Ecole National d’Administration when invited on Friday to speak on his lifelong passion for the European project. The architect of the monetary system and inspiration behind more recent, albeit unsuccessful, moves for the Union’s constitutional consolidation, the former French President continues to command a special place in the eyes of the federalist movement. Charged with on this occasion sharing his thoughts on the single currency on the eve of its first decade, VGE sought to calmly qualify its “great success” amidst the pandemonium and hysteria raging outside.

His presence having initially been lapped up at length by the director of the ENA, the city council’s minister for International and European Relations and the head of the local division of the Young Europeans, D’Estaing set out to anchor the single currency’s existence within a historical narrative. The first steps towards a monetary union, towards the end of the 70s, he reminded not only responded to a progressive political trajectory, but an economic reality at a time of chronic inflation and devaluation, both on the continent and abroad as the dollar shuddered and the US Treasury struggled to balance its books. The adoption of the single currency, he claimed, had brought price stability and hence improved living conditions, eurozone inflation today shaving 2% while four decades averaging 10%. D’Estaing then promptly hit out at the notion of a “Euro crisis” quipping “la situation est pas dramatique…elle est dramatisée,” underlining how the continent’s stock markets continued to climb while the American ones tumbled, wondering how a downturn in a country such as Greece, constituting 2% of the Union’s economic might and 0,02% of the world population, be possibly described in such apocalyptic terms (“a currency having never been displaced by a local crisis”) and laying into the Anglo-Saxon financial press and New York traders, “hostile” to the Euro’s rapid rise to become the second world currency. Had most of the EU not taken to the single currency, he said there would have been a wider “cascade of devaluations,” a deeper downturn and even more fundamental existential crisis of the Union, the Common Agricultural Policy for one heavily reliant on the common market’s price stability.

D’Estaing quickly turned his attentions to answering criticisms of the monetary union and providing his own suggestions for its improvement. He disputed the idea that a common currency was not possible on so large a territory with such divergent economic patterns, sniping whether this meant a global fragmentation of the dollar should be considered. Addressing the tiresomely oft-raised accusation that the Euro serves as an affront on national sovereignty, he underlined that ideally only a mutualisation of the eurozone’s debts would take place, in line with the guidelines of the Stability and Growth Pact, ignored for the past decade by its signatories. On the point of whether or not to pursue European integration, VGE said this was a must, as proven by the Euro’s successful mitigating role during the crisis. To go about this, he regretted the reality of a Europe at deux vitesses, consisting of those forming part of the Eurozone and those not. To rectify this he proposed four steps, the first rendering future sanctions powers for the European Central Bank both automatic and extended to all member states. Second of all, he hoped for a suitable mechanism allowing a member of the single currency to leave if they so wished, no doubt alluding to the anguished indecision of Greece. D’Estaing also criticised the confusion and inefficiency of the Eurozone’s decision taking, suggesting a double majority voting procedure, similar to that he put forward for the European Constitution, and the installation of an economic and monetary secretariat for Europe. As for the means through which to achieve this all, he doubted the usefulness of another treaty revision and also lamented the Franco-German divisions bogging down the project, in contrast to the cosy consensus between the two partners in his day. On a final note, he saw the crisis, or rather “this trouble,” as an opportunity for Europe to forge a long-term monetary and financial vision, capable of furthering the bloc’s potential on the world stage and guided by a European Central Bank with additional powers to oversee given process.

Valéry Giscard D’Estaing’s remarks were greeted with acclamation by an audience no doubt largely favourable to his cause, but seduced by his solid and finely poised case for the single currency. While his suggestions for a longer-term overhaul of the monetary framework are valid though not necessarily his own, he failed to provide a word of comment on the current firefighting efforts, nor their innumerable twists and turns nor their ever-revolving means of bailouts, austerity packages, technocratic governments and so on. Moreover, in times where the trader and word of mouth rule the roost, with little consummate interest in his ambitions for Europe, he failed to present a genuine alternative which would somehow counter their power and conclusively entrench the single currency. The destiny of D’Estaing’s and the federalist movement’s ambitions is being played out at this very moment, in no way determined by its genuine merits or failings but torn apart by an artificial and vile market reality. If all fails though, one guesses he could always go back to his burgeoning literary career.

A full transcript of Valery D’Estaing’s speech is available at



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s