Sunday, September 7, 2014

The irrelevance of the French minister of the Economy

The replacement of a French protectionist by a 36 years old philosopher as French minister of the economy illustrates the irrelevance of this position. The relevant instruments of macro-economic policy in the euro zone are today in the hands of the European Commission and the euro-group. That is why Manuel Valls, the French prime minister, could afford to appoint a demagogue protectionist with ideas that are very different from his, for reasons that had to do with internal party politics. And that is why now that he needed to give the opposite signal, he appointed a moderate philosopher of a very young age, too young in fact to seriously think that he will take any relevant decisions. France influences economic policy at European level meetings, so hopefully Hollande and Valls will focus on appointing good advisers for their role in these meetings. I have always seen France as a successful country, and therefore I do not understand well why it is supposed to be always in crisis. It is a society with a very high level of state intervention in the economy, that has one of the highest standards of living in the world. Surely it has to reform many things, but I don't think they seriously consider doing something very different from what they have been doing pretty well since the times of François Mitterrand: work for a more integrated Europe, consolidate their alliance with Germany, and accept an open economy with a high degree of public spending. Their risk is Madame Le Pen, not the moderate socialists. Their goal should be the same as everybody else's in Europe: promote a more democratic, and less technocratic, European federalism.

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