 Ladies and gentlemen, it's my pleasure to be here in Dublin and to have the opportunity to talk to you about the French-European policy in a very specific context, because as you know, we're going to have a new president, or at least we are going to have a presidential election, and you're going to have a referendum. And obviously, both events are deeply related, at least from a Irish perspective. And it is the expression of the existence of Europe, since an event taking place in one country, France, may affect the outcome of a referendum taking place in Ireland. So if we start with the forecast, not of the weather, but the political weather in France, the chances for Mr. Hollande to win are quite good, or very good if you're optimistic. The margin was probably going to be large, because both rounds are deeply related in French elections, even if some people tend to say that they are totally non-related. So we can reasonably think that Mr. Sarkozy will be outvoted next week, and Mr. Hollande would be the next French president. So if we assume that Mr. Hollande would be elected, what are going to be the implication of his election on the French-European policy? So before answering this question in a direct way, let me just make a certain number of remarks concerning the French-European policy in general, because we cannot reasonably understand what Mr. Hollande may or do not if we do not have in mind the context in which this policy is taking place. The first element is that there is obviously a strong continuity in French-European policy since 1957, independently from political changes, which took place. Avogal opposed the Treaty of Rome, but at the end, after he came into power in 1958, implemented it. When Mitterrand entered into office in 1981, he had obviously a pro-European personal background, but he had on his side a communist who was staunchly opposed to Europe, and all his initial choices, economic and social choices, were in a sense conducted against the trend and the constraints existing in Europe. And there was a debate, an intense national debate, a political debate, which took place in 1983, where the choice was between having a kind of nationalist approach to economic problems and not taking into account the European constraints, and those who argued that it would be a political suicide, and that the future of France lies in Europe. And at the end, the choice which had been made in 1983 was definitely on a pro-European choice, which had costs for the government, but the choice had been made in favor of Europe. The period which came after this intense debate was an interesting period, because Jacques Delors, who was at that time Minister of Finance, was appointed at the Commission. And of course, the period between 1985 and 1991 was a golden period for France and for Europe, because there was this kind of trio made of Mitterrand, Kohl, and Jacques Delors. This had obviously an important implication when the Master's Treaty was submitted to a very well-known habit in Ireland, which consisted of putting the treaty in a referendum. And the Master's Treaty was, in a sense, a watershed. It was a watershed in a sense that for the first time, the European issues became strongly related with the internal political debate. So people realized for the first time that Europe was part of their everyday life. It has implication on their everyday life. And it was deeply connected with the internal debate. At that time, the stake was sovereignty. Do we accept a common currency? So do we accept the idea of sharing our sovereignty? And a pattern, a political pattern appeared, and which still exists in France, but not only in France, between political forces, in a sense that Europe divided both right and left. The Master's Treaty, the yes won, but very narrowly. And thanks to the commitment of Mitterrand, and obviously the left was on the side of the president, and the right was deeply divided between elites who were themselves actually divided, and the population, the rank and file. So on that time, during the Master's Treaty, you had base, roughly speaking, a no vote which came from the right, and a yes vote which came from the left. So the second time the European debate reappeared in the national context was the debate before the ratification of the Amsterdam Treaty. And the Amsterdam Treaty is, of course, very interesting to analyze, because it enshrined the famous stability pact. And at that time, a debate took place in France, and there were general elections in 1997. And at that time, the left said that they would not ratify the Amsterdam Treaty if there would be no reference to growth, which is an interesting reminder for the present debate. At the end, because of the cohabitation between the president, who was actually on that time, the prime minister was Jospin, a compromise was found, and the stability pact became the growth and stability pact, which was a formal lip service paid to growth. But it was enough for the left to show to its constituency that the promise of having a growth component in the pact would be included. Amsterdam Treaty opened a nearer in which Europe became more and more important in the political debate. But the debate shift from traditional sovereignty issues, as it was in the Master's Treaty, to, I would say, the social content of Europe. And obviously all this idea of growth versus stability started in 1997. And the realignment, the political realignment following this treaty were significant in a sense that the left became to be much more skeptical or critical towards Europe. Or precisely because Europe was regarded as a kind of neoliberal adventure, which may potentially destroy the French social model. So this rising tension, which had been limited because the end of the 90s where it appeared of high growth, this tension between the European project and the French model reappeared a few years later with the debate on the constitutional treaty. With here again a referendum, which, as you know, led to the victory of the no in France and Netherlands. The constitutional treaty revealed the fracture line between elites and favored social groups on one side and lower classes on the other side with a divide within the right and within the left. So what was foreseeable 10 years ago had been clearly revealed. And the best illustration of this was that the socialist party in 2009 endorsed officially the constitutional treaty, but the majority of the electorate from the left voted against. And the no in 2005 was a no coming massively from the left. Whereas in Maastricht the no came from the right for two reasons. The first is that the debate shifted from sovereignty to social issues. So we have a French right which is not a liberal right. And who has a traditional constituency attached at least historically to national sovereignty. So which explained why it was massively against the Maastricht treaty. But of course there is another internal reason is that roughly speaking when the referendum is proposed to the French citizen by a French, a rightist government the right and to vote in favor of the treaty and support the government and the reverse is right for the left. In other words people always answer to other questions. And that obviously it's not specific to the French but to the nature of the exercise. So this however the fracture revealed in 2005 became extremely serious and was a source of concern for the left. Because it realized that its constituency its political basis was becoming more and more critical toward Europe. And that is why from 2005 onwards the left shifted toward a more critical approach vis-à-vis Europe and a more leftist approach vis-à-vis let's say social issues and a much more long opposition to neoliberalism which was regarded as the culprit of the problems in France. This picture was in a sense blurred by the rise of the far right which was from the beginning an anti-European force which was a concern for both the right and the left for the right because of course it limited the political influence of the right by definition. But also for the left because many of the argument made by the far right vis-à-vis Europe criticism against Europe were largely endorsed by the average left voter and vis-à-vis Europe with the anti-European approach I mean there are no significant differences between the criticism from the right and the criticism from the left accepted on identity issues and the criticism of the neoliberal movement in Europe is massively rejected both on the right and the left. The main difference lies in the relation to let's say immigration and identity and that is why you and you have the same pattern which had been reproduced during the first round of the French presidential elections between the front gauche with the left front which was on the left of the socialist party and the far right I mean the opposition to neoliberalism to Europe and things like that were basically the same I mean advocating a strong state with strong public services and so on but of course a difference regarding immigration and identity. Now the mainstream left from the left and the right remains committed to Europe with no significant differences no significant differences and that's bringing me back to the idea of continuity between the right and the left and the major common point to the right and the left vis-à-vis Europe is a strong endorsement for a strong Europe including at a global level Europe has a power what we call l'Europe puissance but also a desire and a common desire to limit the influence of European institutions so strong Europe with weak institutions that's defines the French traditional approach vis-à-vis vis-à-vis vis-à-vis Europe and there was no significant alteration of this and Mr. Sarkozy and was the perfect and the best advocate of this exacerbated intergovernmental approach and with the creation of the famous directoire which was called Mercosie which sidelined the European institutions and sidelined the other European countries who didn't see favorably this special relationship so which brings me to a second point which concerns the Franco-Germain relationship which is regarded as crucial by the right and the left when Mr. Sarkozy was elected in 2007 he starts saying or before his election that he will try to rebalance the Franco-German relation with the Brits for example and he used to say that we cannot carry on this policy of having Germany as our only partner and he used to say I mean are you going to spend your holidays in Germany so but it was an attempt to introduce a rupture as he called it with his predecessor so but the reality it was things worked very differently because the relationship had been in a sense reinforced but the reinforcement of the Franco-German axis or relation obviously doesn't mean that French and Germany agree and basically they disagree and they tend to more and more disagree on many issues so why do they disagree whereas they maintain this kind of directoire which had been illustrated by the famous Deauville summit the reason is that the Germans are in a position of strength and the main change which occurred during the last five years at least was a the evolution of the balance of power between France and Germany this relation is more unbalanced than previously but because of the weakening position economic position of France and the strongest position the stronger position of the German economy so both economies are not at the same I'm not on the same playing field the Germans are in a better position and employment trade growth social let's say consensus which much higher than it is in France and the position of France had been weakened so why this relation works to a certain extent on the German side the reason is simple the Germans cannot afford to be isolated in Europe they are largely isolated but without the French consent they would be totally isolated so they absolutely need the support of the French to convey a German message which is rebranded as a European message so it's a very convenient ally for Germany so Mrs. Merkel had resisted all proposals made by Mr. Sarkozy on many fronts but may a certain number of concessions including in the fiscal pact in regard to the court of justice and the automaticity of sanctions even the non-conventional measures monetary of monetary policy conducted by the ECB where the result the partial result at least of a strong French lobbying so the reason why the Germans are I mean still believe and still want to have this core alliance is related to the desire of not being isolated but there is on the French side the alliance with Germany is very useful because it helps France to be at the core of Europe okay so the core of the decision-making process and the Mercosie is the expression of that so we are the core we are the center of the game without being in a position to be equals or in other words we are equalizing our political influence in this direct or in spite of a weakened economic position and that is a traditional French pattern aiming at using political creativity to compensate economic weakness in our relationship with the Germans but there is a paradox in the evolution of the couple because the Germans actually under Miss Merkel became closer much closer to the French on a fundamental point which is into governmentals traditionally the division between the French and the German was that the French were and I mean into governmental and the Germans were federalist but it's no more the case and if you read the famous speech given by Miss Merkel in in Bruges it reveals what she called the union method which is different from the community method and which is actually the endorsement of an intergovernmental approach so the Germans and that is a paradox are becoming more and more on the French line not because they are following the French or they are influenced by the French but because they are realizing that in a sense they are more isolated they were to maintain their position of strength and that a intergovernmental approach is the best way to enhance their position and the management of the crisis was for the Germans in a sense a good I mean they have they can be satisfied from their point of view with the the way they carried their own interest and their own messages through the Franco-German relationship now what Mr. Hollande may change or not and doubtedly I mean there's no doubt that Mr. Hollande will remain strongly attached to a strong Franco-German relationship it is part of the French DNA since 1957 and there is no reasonable alternative to that for France in in Europe but obviously the fiscal compact has in a sense created a new situation because Mr. Hollande said that he will renegotiate the fiscal compact because the growth component is terribly missing and that austerity is obviously not sufficient to bring a sustainable solution to overcome the European crisis and obviously Mr. Hollande is having in mind to take advantage of the election to say to Ms. Merkel that I am invested with a new political legitimacy that you need to take into account Mr. Sarkozy was a lame duck so is no more influence and the second factor which is playing in his favor is the European context because obviously all other leaders in Europe independently from the political inclination are waiting for a French signal to increase the pressure on Germany in order to rebalance the fiscal compact because politically it seems that this approach is not sustainable and what we saw recently in Holland not Hollande but in Holland shows that there is a problem there is a political problem of social acceptability so how to maintain a fiscal compact or to reconcile fiscal compact with growth so the first thing and I would like to insist on that I mean Mr. Hollande is definitely supporting the content of the fiscal pact so the fiscal discipline is not put into question so that is a fundamental point so even when Mr. Hollande talked about renegotiating the treaty I mean it doesn't mean that he's not supporting the fiscal compact as such I mean I'm not sure that he will be able to renegotiate the treaty because it would open a Pandora box and the Germans are strongly opposed but I mean political creativity is without borders and there are different ways of dealing with the issues without renegotiating formally the treaty so in this perspective Francois Hollande made four proposals the first is the creation of project bonds which are not euro bonds and this is of course important he dropped two initial proposition he made in his program which are the most difficult proposals for the Germans and which are basically unacceptable at least for the moment for the Germans one was the creation of euro bonds and the second was the transformation of the ESM into a bank which could apply for loans at the ECB so he dropped those two propositions and made four proposals the first is project bonds which aims at raising money in Europe for financing projects the second aims at recapitalizing the European Bank of Investment for the same purpose the third is the use of undisputed funds in Europe structural funds and the fourth is a tax on fiscal transactions if you look at those four proposals I mean they are reasonable in a sense that they are already on the European table so none of those proposals is original but the fact that they are they have been floated in Europe increase the chance for Mr Hollande to get something so it's not a radical change and none of those four propositions are a non-starter for the Germans the use of undisputed funds is had been proposed even by the the commission the tax on fiscal transaction is supported by the commission but of course the repetition of the gains varies according to the different proposals the recapitalization of the Bank of Investment is not a source of concern and the project bonds appears like a second best compared to the Euro Euro bonds Mr Hollande got recently the support of the governor of the European Central Bank who referred specifically to a growth pact but Mr Merkel yesterday who probably understood the political dynamic which was taking place in Europe with the French election reaffirmed that there was no position between austerity or and growth and that she endorsed the idea of a growth pact the problem of course is the meaning and the content of the growth pact and here you have obviously different perspectives on the growth pact for Mr Hollande at least at this stage at the political stage in which he is now the growth pact is regarded or assimilated to a stimulus package to the different proposal he made in the German mind or even in Mr Draghi's mind a growth pact means something different which doesn't mean that it excludes those proposals but it contains some much more sensitive issues such as reform labor in European countries reduction of the perimeter of the state in the case of France which is an important issue and even if Mr Hollande is obviously supported by other Europeans including Mr Monti but Mr Monti is conducting a policy in Italy aiming at both stimulating the economy and reforming the country he has decided to put an end in Italy to the perfectures which had been instituted by Napoleon when he occupied Italy so that is for example something which could be done in France quite easily but politically very difficult to to reach so as a clever politician Mr Hollande is is perfectly aware of those differences and he explicitly in his press conference refers to the different definitions of a growth pact but obviously he will concentrate on the stimulus dimension and we may expect a hope that once this achieved he moved toward internal reform which are obviously indispensable for a full recovery in France so I guess that I can stop here thank you very much