MISSOURI COMMENTARY: IT'S A SLOW BOAT TO A WEAK EURO

Just when Europe thought it had it right, the French voters came along and messed it all up.

The United States and Great Britain held elections with revamped, modernized versions of old parties moving front and center.

First, there were the New Democrats of Bill Clinton. Old New Deal, government-activist types were shunted off tot he side. The Clinton New Democrats favored balanced budgets and reduced social programs.

Then along came Clinton's clone, Tony Blair, as Prime Minister of Great Britain. His party called itself New Labor. Labor cast aside the grip of the unions and agreed to being just as pinchpenny as their Conservative Party opposites. Frugality became the byword of New Labor and all notions of nationalization and expanded social programs were deep-sixed.

On his way home from the European continent, Bill Clinton stopped off to see Blair. As each one spoke, the other nodded in agreement. They views their obligations, responsibilities and opportunities in identical terms. They were the new men of the new frontier.

In the French elections, the tired old Socialists, virtually obliterated in the elections of 1993, rose from the political dead and trounced the two established conservative parties. In the runoff, the jingoistic, bigoted National Front threw much of its weight behind the Socialists, making the French political landscape into a crazy quilt. Picture, if you can, the Socialists and their Communist partners thrust into office with the timely help of the far right.

Blair and Clinton, dancing slightly left of center, could not so smilingly pose for pictures with France's new Socialist Prime Minister, 60-year-old Lionel Jospin. He is from the Old Frontier. He does not position himself as an austerity-budget type. Quite to the contrary, he wants to create 700,000 new jobs (half to be on the public payroll) and to reduce the work week for everyone from 39 to 35 hours.

The conservatives advocated belt tightening, but the French voters overwhelmingly opted out of that.

Lurking behind the French election, as it was in the shadows of the British election, was the question of a unified European currency, the Euro.

Not all that long ago, France had a growing economy and was the hub of advanced industry in Europe. In a world in which competition continues to increase, French industry is burdened by protectionism and government subsidization. Britain has passed France in global competitiveness.

Germany, beset with its own high unemployment, is nonetheless a zealous proponent of a strong currency. Since Hitler came to power in an economy devastated by a near worthless German mark, post-war German politicians have been resolute in avoiding a financial climate that might cause history to repeat itself. It was Germany's desire for a strong Euro that induced the French conservatives to put the squeeze on the budget.

Jospin is between a rock and a hard place. His campaign clearly called for more government spending. But, as the leader of the French government, he is to some degree bound by the intent of the Maastricht Treaty to tighten the budget as the prerequisite to the coming of the Euro.

Jospin is definitely not going to squeeze the budget in the pursuit of painful austerity. One does not achieve victory only to embrace the loser platform after the election.

Chancellor Helmut Kohl's quest for a single strong European currency is even running into trouble back home. He's in a war with his own central bank as to how much strictness is required. He is not eager to lead the charge for greater austerity in Germany. The French election will cause him to reconsider just how much pain must be imposed in the name of something as abstract as a new European currency.

The road to a strong Euro has reached a dead end. It's now a slow road to a weaker Euro.

~Tom Eagleton of St. Louis is a former U.S. senator from Missouri.