Blair Versus Chirac

Acrimonious finger-pointing is the order of the day across the Atlantic, following French and Dutch voters’ rejection of the European Union constitution. Personal relations between French President Jacques Chirac and British Prime Minister Tony Blair are so frayed that tongue-in-cheek allusions to Waterloo are commonplace. It’s in Europe’s interest that Britain prevail in this cross-channel showdown too, given the issues involved.

Britain, along with some other allies, has for years pressed the EU to adopt more flexible business regulations that would encourage more risk-taking and create more jobs. Despite their high unemployment rates and sclerotic economic performance, France and Germany have dragged their heels, accusing London of not understanding or supporting Europe’s benevolent social model. Unfortunately for the accusers, Britain, despite its superior economic performance, is not the heartless capitalist nation with no social safety net depicted by officials in Paris and Berlin.

Blair shows every sign of taking on Chirac as Britain prepares to assume the rotating presidency of the EU on Friday. In an important speech to the European Parliament last week, Blair said: “Some have suggested I want to abandon Europe’s social model. But tell me: What type of social model is it that has 20 million unemployed in Europe, productivity rates falling behind those of the U.S.A.; that is allowing more science graduates to be produced by India than by Europe; and that, on any relative index of a modern economy -- skills, R&D;, patents, IT -- is going down not up?”

Blair is justifiably adamant that the EU must roll back its lavish agricultural subsidy program, which mainly helps French farmers. As Blair told his own parliament last week: “It simply does not make sense in this new world for Europe to spend over 40% of its budget on the common agricultural policy, representing 5% of the EU population producing less than 2% of the EU’s output.”

The rest of the world -- not just Europe’s consumers -- has a stake in the confrontation between Blair and Chirac. Europe’s direct payments to its farmers and other forms of agricultural protectionism hurt farmers in the developing world and undermine the basic fairness of the global trading system. But don’t expect Chirac, a former agriculture minister who calls the inefficient subsidies a “dynamic” policy, to care much.

Germany’s support of France in recent intra-European squabbling, dating back to the Gerhard Schroeder-Chirac partnership against the Iraqi war, is both disappointing and shortsighted. Germany should be alongside the British, pounding the table for economic reforms. September’s national elections offer a chance for Berlin to align its politics with its real interests. If elected to replace Schroeder, Angela Merkel, leader of the Christian Democratic Union, is believed likely to switch sides on many of these continental squabbles and back Blair’s vision. Europeans can only hope.