Making and Breaking the Rules French policy on EU.pdf

Making and Breaking the Rules: French policy on EU ‘gouvernement économique’ and the Stability and Growth Pact By David J. Howarth University of Edinburgh d.howarth@ed.ac.uk ABSTRACT French policy-makers have been caught in a dilemma with regard to the construction of the Economic governance (EG) dimension of EMU between two strong but contradictory preferences: on the one hand the supranational consequences of a dirigiste approach to macro-economic policy and, on the other hand, a Gaullist reflex to retain sovereignty as much as possible and to insist upon intergovernmentalism in EU-level macroeconomic policy-making. Since the late 1980s, French governments have promoted the construction of EG in ways which can be seen in terms of these contradictory preferences, while challenging the official Treaty-based ‘price stability’ goals of EG. The Raffarin Government supported the March 2005 reform of the Stability and Growth Pact (Stability Pact, SP) because it rendered the Pact more flexible allowing greater margin of manoeuvre in the development and implementation of the Broad Economic Policy Guidelines (BEPG) and the application of the Excessive Deficit Procedure (EDP). EG has thus involved less ‘top- down’ Europeanization and ‘transformation’ of French policy than ‘bottom-up’ Europeanization, ‘accommodation’ and ‘absorption’. KEY WORDS EMU, Economic Governance, Stability and Growth Pact, Europeanization Paper presented on Panel Session 10A Challenges to the Stability and Growth Pact: