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France and the Claims for Social Harmonization in the European Economic Community 97
ble part of total social charges weighing upon German employers. Nor did it take
account of the overvaluation of the French franc and the undervaluation of the German
mark. Thus, the disparity in the cost of labour in the two countries was, according
to officials in the Interministerial Committee for Questions of European Integration
(SGCI), less than indicated in the table above. The SGCI concluded that
in the course of two years the difference in the cost of labour between France and
Germany had decreased from 22.6% in 1954 to only 7% in 1956. 64
The Quai d’Orsay was well aware that a harmonization of social charges would
not compensate for the disparity between French and foreign prices. The Ministry
was of the opinion that this disparity was mainly due to the structure of the French
costs and to the sum of production costs. After the Second World War, subsequent
French governments had, in contrast to the previous period, led a policy focused on
investments. Simultaneously, a policy of increased wages had been pursued. At the
national level the increase in income had balanced the increase in prices. At the international
level these policies had created a gap between French and foreign prices.
65 Consequently, harmonization of social legislation would only very slightly
improve the situation for those branches of French industry where prices were
higher than in other countries. Nor was such harmonization likely to be accepted by
France’s partners. Not only would it contradict objectives with regard to competition
pursued notably among the Six, social harmonization would also worsen the
European countries’ competitive position on the international market without improving
France’s position versus third countries. 66
The Quai d’Orsay was concerned with the danger involved in describing the gap
in prices as a general disparity. Export-aid and import-taxes did not concern all
products. This could be interpreted as if disparities did not exist within sectors outside
the scope of these arrangements, which would mean that the disparity was not
general. It could also be interpreted as if disparities within these branches were
compensated for by specific distortions to the detriment of other countries. 67 An investigation
into general price disparities would highlight the need for reform of the
structure of French costs. 68 Alternatively it could lead France’s partners to recommend
with reinforced insistence a devaluation of the French franc. The Ministry
was well aware that a permanent elimination of price disparities would take both
devaluation and reform. Yet while the Mollet government did not share the preceding
government’s reasons against devaluation, it was all the same against it. 69 The
system of export aid and import taxes was conducive to avoiding devaluation. The
argument presented by the French government was that the price disparities were
64. CAC, 910004/2, Note sur l’incidence des charges sociales et de la charge salariale globale, undated.
65. MAE, DE-CE 1945-60, 711, Note, 15.09.1956.
66. Ibid.
67. Ibid. One is left with the impression that this was the case, since the Ministry advised against a sector-wise
study of price disparities since this could reveal specific distortions harmful to certain countries.
68. Ibid.
69. DDF 1956, I, no.265, Note de la Direction générale des Affaires économiques et financières,
21.04.1956.