And It’s A ‘No’

According to the initial estimates from the French agency CSA for ‘France info’ the no vote has carried the day, by 55.5% to 44.5%: a huge difference

OK, I guess the debate can now begin.

Update: Live blogging of the referendum and its imapct going on over here.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

35 thoughts on “And It’s A ‘No’

  1. I’m live-blogging the French referendum with another French blogger now. Its looking like a No but I am hoping it is not as bad as the first exit poll from France 2.

  2. Terrific! At least 3-5 years of political stagnation ahead and with 25 members to debate a new/old/edited treaty/constitution the European blogging community will have enough material to write about for a decade!

    Good times for blogging ahead!

  3. “we don’t know what it’ll mean”.

    Well, wew’ll have plenty of time to think about this over the coming days.

    Despite the fact that Le Penn has just been on the media calling for the resignation of Chirac, I am begining to think that the bigger problem will be for the French left. The PS is very badly split, and it may be difficult to put this together again for the next elections. So Chirac may be weakened, but will struggle on.

    Maybe the winner – in French electoral terms will be Sarkozy: which means paradoxically, that they may just have voted indirectly for a strongish dose of economic liberalism.

    The real loser, of course, will be Europe.

  4. One assumes that Juncker has a pre-written statement which will be issued tonight or tomorrow morning. Hopefully it will stay away form the finger-wagging tone of earlier non-French politician pro-Yes pronouncements, which ended up helping the No campaign in France.

  5. does that mean turkey isn?t going to join now?.

    Turkey wasn’t going to join either way.

    But this may mean that Bulgaria and Romania won’t join.

    And ofcourse Ukraine and Georgia can kiss their ambitions for membership goodbye.

  6. “This won’t have any impact on enlargement.”

    Well David, never say never. What we do know is that the future is now hard to foresee with any degree of precision, and this is never good for anything.

    In principle this vote should not affect any ongoing accession negotiations, including Turkey. I fear that what Aris says about Ukraine, or Georgia, or Serbia and Croatia for that matter, may well be true: short term there may well be no new candidates.

    Undoubtedly some of the politicians would like to ditch the ‘unpopular’ Turkey, but this won’t be so easy. I think Turkey will be careful to try and comply to the letter. And the EU has an institutional crisis, so credibility is at stake.

    In principle, unless things really start to get complicated, I don’t think there will be any obvious about face on those who are already in the pipeline.

    The implications will undoubtedly be more obvious in the economic area. We might start with the euro. Let’s see what happens this week. Then there is the stability pact, which I think must now be seriously enforced: otherwise it will look like we are falling apart.

    Then Peter Mandelson has to start talking with the Chinese about textile’s soon: what the hell is he going to say now? If this vote has been anything it has been a clear vote *against* free trade. I think China is going to be a bigger issue than Turkey.

  7. “Useful idiots” is probably the correct term for those voting “Non”, making the right decision for all the wrong reasons. Anyway, thanks!

  8. Yes it’s too soon to be confident this has no effect on enlargement. One thing we learn is that last year’s +10 enlargement played very differently with the masses than it did with the suits.

  9. Ok, that’s not preposterous. But membership for Ukraine and Turkey is too remote for this to have an impact. Romania and Bulgaria otoh are too close to the fisnish line.

  10. The big issues IMOH are going to revolve around how the political leadership handles this.

    Jean-Claude Juncker, who has the presidency till the end of June, has said that the process should continue as anticipated into next year. I feel that this could prove disastrous. In particular it may pit some countries against others.

    Basically, we can now expect a hefty no in the Netherlands on Wednesday, and I think they then need to draw a halt, listen to the criticisms, and formulate a plan ‘b’. If they let the consultation place go forward, there will only be the impression of a weak and divided europe. There is the clear possibility that all the forthcoming referendums vote no (and that the Czech Republic decide to have one and do likewise). OTOH all the countries where the issue is decided in parliament may vote yes. This would only serve to make us look ridiculous.

    For better or worse, today’s vote has to be the end of something, and the begining of something else.

  11. I am disappointed to see this, but not surprised (after all the predictions that had been made this was a likely outcome). 🙁

    Now I am wondering how the financial markets will react tomorrow and in the next days. Will it be as bad as some analysts said it would be?

  12. “The big issues IMOH are going to revolve around how the political leadership handles this.”

    Leadership is definitely going to be the essential factor. But who? Chirac is out, Schroder is tied up with the upcoming elections, Berlusconi..well..never mind. The only major player who has some influence is Tony Blair.

  13. This would only serve to make us look ridiculous.

    No. Evil.
    If it looks like parliaments are systematically disregarding the people there’ll be real trouble.

  14. “Now I am wondering how the financial markets will react tomorrow and in the next days. Will it be as bad as some analysts said it would be?”

    Which markets are open tomorrow? Frankfurt? Paris? I know that London and the US markets are closed. But I don’t know how many countries have a holiday this weekend.

  15. Frankfurt should be open, Paris I think is too. Tokyo could be an early indication (but I am not an expert on this…).

  16. Something I suspect we are seeing here, that no commentator I know of has mentioned, is that France has seen the perversion of federalism in the US and want’s no part of it. It sounds fine to claim that only existing powers will be delegated upward, that in most respects the EU states will have freedom to set laws as they wish, but if there’s anything we’ve learned from the history of the US in the 20th century, it’s that the feds will take any power they can get, whether through the commerce clause, through carrot-and-stick (highway funds contingent on the drinking age) and so on. It seems to me quite likely that the French, and most Europeans, have concluded that they’re happy with the current balance of power and see no need to create a situation that will have others telling them what to do about nuclear power, whether or not to have a 35hr week, how much vacation to take in summer and so on — all legit questions, sure, but questions that the French would rather sort out themselves.

  17. 2nd casualty: the reticence of the French media about reporting private lives of pols. It seems like Sarkozy’s personal problems have broken through the taboo.

  18. Maynard, the left wing ‘non’ voters are not against Brussels telling Europeans what to do, they just don’t like what it is currently saying. They want Brussels to force countries to have higher taxes, shorter work weeks, higher minimum wages, barriers to outsourcing, etc.

  19. ‘Which markets are open tomorrow? Frankfurt? Paris? I know that London and the US markets are closed.’

    Well London isn’t, but in Paris and Frankfurt it should be business as usual. The US I think is closed today. There is Asia too remember. As it happens the euro is already falling there, but only very moderately. I guess we will have a clearer picture on Tuesday.

    I don’t think there will be a big initial reaction. As many have said, the markets were probably already anticipating a ‘no’.

    I think the impact will be seen over weeks and months. And it will be seen as a reflection of how our institutions react. There are perhaps four main items: the EU budget, the Stability and Growth Pact, the ECB and the euro, and the Lisbon reform process.

    If agreement on a new budget, which has already proved complicated, only becomes more difficult, then this will obviously be negative. If Almunia isn’t tough on Italy and Portugal, ditto.

    As I posted last week the ECB is having a credibility problem itself, and people will be looking long and hard at Trichet on Thursday.

    Then there is the Lisbon process. Was the vote yesterday in favour or against? I think this isn’t clear at this time. The worst issue is there will probably be a crisis of weak leadership in France until the next presidential election. Yesterday’s vote now makes Sarkozy the likely winner, and is most likely to be very strong on Lisbon.

    At some stage, the EU political leadership will turn this situation round, in the sense that they restore confidence in their ability to carry the majority of voters behind them on EU issues. But it is the time between now and then that is going to be tricky.

  20. T”hey want Brussels to force countries to have higher taxes, shorter work weeks, higher minimum wages, barriers to outsourcing, etc.”

    On the taxes I wouldn’t be too sure, on the other items you could be right, but since none of them are realiseable, we have a crisis about the ‘reality’ of voter expectations.

  21. Edward ‘harmonisation fiscale’ – one of the demands of the left wing ‘non’ campaign, ‘dumping fiscal’ – one of the chief exhibits of how the const. is too ‘liberale’ So I’d say they do want higher taxes in the new member states. Now if you’re saying they don’t want higher taxes at home I’d agree with you, though either Fabius or Emmanuelli did suggest a tax of 110 Euro/person over a five year period in the rich member states to subsidize development of the new members.

  22. The more I think about it, the more I don’t anticipate a rapid financial crisis. The initial focus will be on the political crisis and how the politicians respond. If the political situation deteriorates, and there is a more general crisis of confidence in the ability of our institutions to respond, then I would expect the economic consequences to arrive.

  23. Thinking aloud – and with the China textiles post in mind – the French vote may strengthen Greenspan’s hand with China, and for the following reason:

    What we have is uncertainty, under conditions of uncertainty investors tend to go for the safest bet. Strangely enough this is still likely to be the dollar. So money will be coming into the US, as people, obviously sell euros, anticipating a reduction in its value. So……..

    The US treasury will have an additional flow of non-Chinese funds, and will not be so dependent on China to sell US government debt. Hence they may be able to take a stronger line. Just a thought.

    Of course, if this does happen, longer term interest rates will effectively drop, which will only make the distortions of the housing boom worse.

  24. Can we take just a moment an appreciate Tony Blair’s political savvy?

    If the process stops (which I think is not such a good idea), he’s off the hook for the UK referendum. If it continues, he’s already had an election in which the people had the chance to give him a bloody nose. Now they can consider the EU on its merits, or at least insofar as the UK debate is ever related to the reality of the EU. Further, from the little England point of view, can anything opposed by so many Frenchmen be all that bad?

  25. Does the Non mean that something is rotten in the EU? You bet. Can it be fixed easily? No. Basically what’s required is to re-educate the political elites (since re-educating the population is not what we do) in how to relate their work to real needs of their constituents. Undertaking huge projects at the EU-level whose results are then junked because they have no reliable support in the population is just a depressing waste of time and resources.

  26. Further, from the little England point of view, can anything opposed by so many Frenchmen be all that bad?As much as I dislike the Daily Wail set, this strikes me as wishful thinking. It isn’t French enthusiasm or the lack thereof which concerns most opponents of the European constitution, but the sheer length and incomprehensibility of it, along with all sorts of ridiculous clauses mandating positive “rights” that have no business being decreed from on high by Brussels.

    Europe has gotten along just fine thus far without a constitution, and after all the changes of the past few years, a little gridlock won’t necessarily be a bad thing, in so far as it gives people time to absorb all the changes to date. This turgid brick of a constitution was a disaster in the making, and in the years to come advocates of the EU will be grateful that they were saved from their own worst tendencies by the French and Dutch electorates, if only they can muster the willpower to try again for something a lot more modest and transparent. Vive la France indeed!

  27. This is a very complex topic. The complexity increases noticing the different perspectives among you. Edward is interested in stability for the sake of the market(s). Georg, Oliver and others (if I read them correctly) are interested in the political process and preserving at least a grain of democracy in it.

    This has to incubate with me for a day or two before I can comment any further.

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