By now you're well aware that France rejected the proposed European Union Constitution on Sunday. Apparently, French voters just don't understand that current global market forces will not be kind to their rather socialist-leaning tendencies... Voting against their best economic hope doesn't help matters any.
Read THIS article in the CS Monitor. An excerpt: "It could be a historical watershed, a turning point," predicts Dominique Moisi, one of France's most pre-eminent commentators on international affairs.
That, he says, is because few French citizens voted on the merits of the highly technical and laboriously written legal document presented for their approval. Instead, most of them were expressing their anger at their government's failure to create jobs, and their fear that the European Union can no longer shelter them from the harsh winds of globalized competition.
Read THIS article in the CS Monitor. An excerpt: "It could be a historical watershed, a turning point," predicts Dominique Moisi, one of France's most pre-eminent commentators on international affairs.
That, he says, is because few French citizens voted on the merits of the highly technical and laboriously written legal document presented for their approval. Instead, most of them were expressing their anger at their government's failure to create jobs, and their fear that the European Union can no longer shelter them from the harsh winds of globalized competition.
I have two problems with that: First, the premise that it's the government's business to create jobs is unacceptable. The only thing a government can do to create jobs for its entire population is to get out of the way of the private sector and let it create the jobs. Second, as to their fear of globalized competition, the French need to get over it. China and India may be taking many of the manufacturing jobs from around the world, but the U.S. and Europe still have the edge in terms of service industries and technical innovation. It's our job to make sure it stays that way.
What will this mean for investors? Again from the article: "People will have to go away and think again," says Denis MacShane, Britain's Europe Minister until earlier this year. "Europe will have to carry on under existing treaties, but there will be a period of stasis in European affairs that won't be cleared up until the political question of leadership in Germany, France and Italy is cleared up at elections."
That stasis, and the period of introspection that would follow the death of the Constitution, would clearly undermine French-led efforts to build the EU into a confident global counterweight to the United States. It may be more problematic for currency traders than for stock investors, but to me it looks like purgatory in the E.U. for a while...
That stasis, and the period of introspection that would follow the death of the Constitution, would clearly undermine French-led efforts to build the EU into a confident global counterweight to the United States. It may be more problematic for currency traders than for stock investors, but to me it looks like purgatory in the E.U. for a while...
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