LONDON, 22 May 2005 — At the beginning of April, opinion in France had shifted within a couple of months from being in favor of the proposed European Constitutional Treaty to being against. France of all countries, the historical driving force behind the European Union!

In recent weeks the mood has altered several times but, with only a week to go until next Sunday’s referendum, the Chirac government still faces powerful opposition, and there is much speculation about the consequences of a “no” vote.

It would be a quintessentially Gallic result if the ‘yes’ campaign managed to scrape a decimal point or so above 50 percent — and very reminiscent of the French referendum on Maastricht.

In my opinion, the economic troubles now worrying the French electorate were fomented by the restrictive economic policies adopted in the run-up to the Maastricht Treaty and the policy regime since then. And the performance of the French economy, not least its high unemployment rate, has featured prominently in recent debates.

Last week, Le Figaro was proclaiming: “The British miracle should serve us as an example, provided we have the courage to cross the Channel and seek answers ... to the anemia of our economy.”

Yes, the grass is always greener on the other side of the Channel. I wish I had Le Figaro’s confidence in the durability of the British economic miracle: There have been disturbing echoes recently of the “miracle” that Lord Lawson thought he had worked here in the late 1980s. Then as now we heard a lot about the flexibility of the British labor market after all those Thatcherite reforms that essentially amounted to strengthening the hand of employers against the employed. But that flexibility was not much consolation when disastrous macroeconomic policies brought us recession in the early 1990s.

Of course, pace Figaro, you do not need courage to cross the Channel or take a train beneath it. London is teeming with French waiters escaping the high unemployment in France. But to return to the French economy. The great hope of the French during the work on the Delors report of the 1980s and the Maastricht Treaty was that the outcome would be an expansionary European economic policy, providing some insulation (as far as was possible) from the vagaries of a world economy dominated by the United States.

What the French and the rest of the eurozone ended up with was subjection to a European Central Bank that seems to think Weimar inflation lurks just around the corner, plus fiscal rules that did not take account of the lessons of economic history and economic cycles — rules which have recently had to be stretched, inevitably, but whose framework was, and is, fundamentally inimical to the kind of “dash for growth” that is required when unemployment is chronically high.

With its “opt out” from the Maastricht Treaty, Britain escaped this straitjacket, an escape which assisted the impressive economic performance recorded under the chancellorships of both Kenneth Clarke for the Conservatives and Brown for Labour.

The British government did remarkably well in securing its opt-out from the eurozone while preserving membership of the EU. But London was determined that it should not again fall into the trap that ensnared Margaret Thatcher; she had signed up for the single market, without catching on to what it entailed (the single currency).

The view that the treaty is too supportive of the “Anglo-Saxon” approach to economic policy is one of the factors cited by Laurent Fabius, former French socialist prime minister, in support of his campaign against the treaty (although the party itself officially voted in favor). But the treaty is such a hard-honed compromise that Chirac can himself promote it as a French bulwark against the British. The essential point about the treaty is that with the blessing of both Blair and Chirac, it is aimed at enabling the enlarged EU to function more efficiently.

Whatever the outcome of the French referendum, and the Dutch one that is due to follow hot on its heels, Blair will be in charge of the still ‘rotating’ presidency from July to December. He will either be sorting out a mess caused by a French ‘no’ or he will himself be preparing for a British referendum.

Whatever the French end up doing, those who admire the British economic model may have their eyes opened as the UK’s housing and credit bubbles deflate, and the public sector ceases to create employment at such a breathless pace. It may well be a return to “economic problems as usual”.

Meanwhile, if the French say “yes” and Britain does indeed go ahead with a referendum, then Prime Minister Tony Blair, who is so obsessed with “respect”, must face the problem that there are few people left in this country who respect his judgment. Ironically, if Blair wants to go down in history as the man under whose premiership Britain’s position in Europe was secured, he himself will have to take a back seat in the “yes” campaign.