French Franc Naustalgia

Well I’ve been reading about the Germans, the Italians, now apparently it is the turn of the French to feel naustalgic:

Three out of five French people miss their old currency, replaced by the euro in 2002, a survey for Valeurs Actuelles magazine showed on Wednesday. In February 2002 that figure was just 39 percent.

While the rising tide of nostalgia seemed to chime with French voters’ rejection last month of theEuropean Union constitution, a breakdown showed longing for the franc was widespread even among those who support the EU project.

I like that bit, “longing was widespread even among those who support the EU project”. This highlights the fact that it is perfectly consistent to feel pro EU and yet not want the common currency. Out of the wardrobe everyone.

Update: The Financial Times this morning also mentions the emergence of Philippe de Villiers, the leader of the nationalist Movement for France, as the champion of a referendum in France on continued use of the euro. According to the FT de Villiers, who is a leading anti-constitution campaigner, said a debate about Europe’s single currency was already under way in Germany, the Netherlands and Italy but had not properly started in France. ?Everybody notes today that the adoption of the euro was a technical success but its economic, political, and human toll is incontestable,?. Now much of the recent ‘ referendum euro’ talk comes from those who would predictably say what they are saying. They are normally not people with any special knowledge of the economics behind it, and I think no great significance should be attached, except the fact that these kind of comments are becoming commonplace, where they weren’t before. My guess is that debate about the euro will increase with time.

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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".

3 thoughts on “French Franc Naustalgia

  1. Why is desire for a national currency characterised and devalued as “nostalgia”? It’s a plausible policy option for France today – look at the Pound. Maybe another example of the insider tendency to see opposition to EU policies as irrational or sentimental.

  2. “Why is desire for a national currency characterised and devalued as “nostalgia”?”

    Just journalese I guess, and bad journalese at that.I’m probably as guilty as the rest here. However I think it is relevant to distinguish between those who don’t like the euro because they have never learnt to use it (those looking backwards) and those who are now critical since they don’t see how it can work (looking forwards). Euro ‘critics’, like constitution critics are likely to hold a very mixed bag of opinions.

    My objections are purely technical. Look eg at Spain’s ballooning deficit announced yesterday. What, under the euro, can be done about this? There is no obvious answer. Questions, only questions.

    Now, as to whether leaving is a plausible policy option for France, I don’t know. It is not the same as saying the UK is out, since they were never in. I think any folding of the euro would have large financial global consequences, ones which none of us want. So I don’t think this is a credible option for France now.

    I think the euro may well unwind in stages. The most likely, IMHO, is that the 4 Mediterranean states are forced to leave at some stage. The reduced group might then be more viable, for more time. This would leave France IN.

  3. My objections are purely technical. Look eg at Spain’s ballooning deficit announced yesterday.

    If real interest rates in Spain are negative, isn’t it rational that the government goes into debt?

    I think the euro may well unwind in stages. The most likely, IMHO, is that the 4 Mediterranean states are forced to leave at some stage.

    IMHO you underestimate the psychological impact coupled with the unpopularity of the currency. The question will not be why they had to leave, but why they are allowed to have their own currency.

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