00:00Well, we haven't had any official reaction from the European Commission behind me,
00:04but in the weeks leading up to this vote, when the writing was on the wall,
00:08we heard a lot of concern from EU officials, and that's for two reasons.
00:12One is, as you mentioned, France is the second biggest EU country,
00:16and political instability in the second largest EU country is bad news for the European Union.
00:23This is, of course, the second time a government has fallen in recent years,
00:27and there seems to be no clear way that the French Parliament is going to become governable,
00:33and, of course, you have all the speculation about Emmanuel Macron resigning as a result of this vote,
00:39although he said he has absolutely no intention of doing so before the end of his term.
00:44But it all means a kind of leadership vacuum in the EU,
00:48and it adds to the perception that President Macron is a lame duck
00:52and unable to take a lead on the European stage.
00:55Then the other reason they're worried is actually because of the policy issue
01:00that resulted in this no-confidence vote, which was the budget,
01:03which was trying to deal with France's deficit and debt, as you were just talking about.
01:09Now, France's deficit is very clearly violating EU rules,
01:13and the Commission has ruled so last year.
01:15However, the Commission has taken a very light-handed approach with France
01:19in a way that it certainly wouldn't with other countries,
01:21and that's because of France's central importance to the European Union.
01:26But, of course, there's always fears that patience will run out
01:28with France not getting a hold of that deficit
01:32in a way that it's required to do under EU rules.
01:36And, of course, the worst-case scenario that people fear,
01:39that your guest was just speaking about there,
01:41is that France would have to take out some kind of loan,
01:44that it would, especially if the bond market started panicking
01:47as a result of this political instability,
01:50that it's been suggested that the IMF would have to step in.
01:53What's more likely, since the debt crisis,
01:55the IMF wouldn't really need to have a role
01:57because there's the European stability mechanism.
02:00The EU could bail out France.
02:03We're not, as your previous guest was noting, we're not there yet,
02:05but there's a lot of discussion right now in Brussels
02:08about what would need to be done very quickly
02:11if there was some kind of panic in the bond markets,
02:15if investors lost confidence in France's debt.
02:18That, of course, needs unanimous approval
02:20by all the other EU governments.
02:22So I've also heard a lot of people speculating
02:24whether France could even get unanimous approval for a bailout.
02:29Well, Dave, we've asked whether France's role in Europe
02:34has been weak now.
02:35I mean, it has such a, traditionally, it has such a leading role.
02:38Do we envision that their role is now weakened?
02:45Yes, I mean, that is the consensus.
02:47Already there was an impression that Emmanuel Macron is a lame duck
02:50and that when he's speaking at European level,
02:53he is so sidetracked by the domestic political and economic crises
02:58that he's facing that he's not really able to move the needle
03:01at all at European level.
03:02And that's a big problem because there really isn't anyone right now
03:05leading at European level.
03:07He was, of course, when he came in his first term
03:10out to the sounds of the Ode to Joy, the EU anthem,
03:14he really made Europe the centerpiece of his presidency
03:18and he was going to transform Europe,
03:20give Europe a stronger vision in the world.
03:23Nobody is feeling right now like Europe is very strong
03:26and having a strong position in the world.
03:29And they're looking around at the table
03:30at this current crop of leaders
03:32and they don't see anyone who could maybe lead Europe
03:35out of this position it's in right now.
03:37And certainly today's vote leads,
03:40furthers that impression of Emmanuel Macron
03:42that he is not going to be able to help Europe as a whole
03:47in this very delicate and dangerous position
03:49that the EU finds itself in right now.
03:51Dave, great to get the European reaction to all of this.
03:55Thanks so much for joining us.
03:56Dave Keating reporting live there from Brussels.
Comments