The cracks begin to widen

A couple of different stories regarding the EU caught my eye today. From the Guardian, word that the leaders of "old" EU countries (essentially France and Germany) will fight bitterly to prevent any of their hard-won prosperity from slipping to newer members as they battle over the new constitution:

European leaders on all sides hope that Mr Barroso's conciliatory language will help to calm the debate in France where there is anger that the EU is moving towards a neo-liberal, free market future and away from the "French model" of strong social guarantees and public services.

But unease extends beyond France as the two halves of Europe - dubbed "old" and "new" by Donald Rumsfeld - divide over the measure. On one side stand the two main founding members of the EU, France and Germany, whose political forefathers would turn in their graves if the Treaty of Rome led to a Thatcherite laissez-faire Europe.

On the other side is Britain and the new EU member states in central and eastern Europe who want to reform what they regard as Europe's hidebound economy.

And from Businessweek Online, a look at French and German efforts to further loosen the Growth and Stability Pact they insisted upon at the EU's birth but have routinely ignored when it doesn't suit their own economic issues:

EU leaders approved a watering down of the rules that underpin the stability of the euro on Tuesday, a step Germany and France -- repeat offenders of the old rules -- quickly hailed as necessary to spur growth in lean times.

French President Jacques Chirac said the amended "Stability and Growth Pact" contained "more intelligent" monetary rules that will be "more accepted and more respected."

The original rules, written in 1997, had become unsuitable for they prevented governments from triggering growth at a time when Europe's economy is in the doldrums with an annual growth rate of barely 2 percent, Chirac said.

Other interesting news out of Europe: France appears ready to reject the EU constitution as workers fear French acceptance will expose France to too much competition from lower-income Eastern European members of the EU.

I'm left with the feeling that French and German intransigence will eventually hobble the EU to a point where members begin to dismiss it as a debate club rather than a serious representation of Europe.

Here's a little sound bite from French president Chirac to give you an idea on how France would like to see the EU promote economic growth:

"Ultraliberalism is the new Communism of our age," one source reported Chirac as saying.

Mike over at Blog One for the Gipper has another take on French reluctance. Will this make France the unexpected hero...?

European Union
Stability and Growth Pact
Services Directive