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PRESS RELEASE


French Government and EU Forced To Accept Major Canal Infrastructure Project

PARIS, Oct. 5, 2017 (Nouvelle Solidarité)—On Oct. 3, the French government made a major breakthrough, reaching an agreement to finance one of the biggest infrastructure programs in European history: a large barge canal connecting the Paris region with the dense canal grid of Northern Europe.

History: "I will make the port of Antwerp into a pistol directed at the heart of England." This is what the revolutionary republican military genius, and then-Mayor Lazare Carnot said 200 years ago, while arguing for construction of an inland waterway connecting the Seine basin (Paris) with the Schelde (Antwerp); at the time Antwerp was part of the French Empire.

Concrete plans have been on the drawing board for at least 35 years. But today, the program is set to go ahead under the name of Canal Seine Nord Europe (CSNE). The €4.7 billion project, the largest infrastructure project of the EU, has three major components: 1) an upgrade of all infrastructure along the Seine and Oise Rivers, especially between Le Havre and Conflans Sainte Honorine; 2) The digging of a new 54 meters wide and 104 kilometers long canal between Compiègne and Cambrai; 3) a massive upgrade of the canal connecting Dunkerque with Lille. Crossing the border, also in Belgium, a massive upgrade of the inland navigation canals is already underway.

With the highways connecting France to Belgium, the Netherlands, and Germany totally overcrowded by trucks, major economic players want to move durable goods from road transport to rail and water transportation.

Presidential candidate Jacques Cheminade campaigned for infrastructure, underlining that both the Seine Nord and Le Havre required urgent action. Cheminade proposed a "New Freyssinet Plan" inter-modal program aimed to boost the French ports such as Le Havre by massively upgrading their "hinterland" (waterway and railroad cargo connectivity).

If not sabotaged, the construction work for the new canal will immediately create about 15,000 jobs, and the intermodal platforms connecting rail, road and airports with the canal will generate another 50,000.

Initially, when Emmanuel Macron took office as President on May 14 of this year, the French government announced that, given the budget situation, they would "pause" the financing of all major infrastructure programs. The "pause" created an uproar among mayors and local and regional elected officials. To finance the €4.7 billion program, the regions directly involved have already offered €1 billion. For the rest, the EU Commission gave a green light for 40% of the program (€1.8 billion), since the canal is supposedly a "green" program, with fewer trucks. Another €1 billion will come from the French state, and the remaining €776 million had to come from a loan. But since under current circumstances, no bank wanted to finance the program, and France, under Macron, wants to conform to the Maastricht criteria (deficit below 3%), the program was put on hold. Local elected officials went into riot mode, since their re-election depends on creating jobs in the devastated regions of northern France, where steel, coal and textile have disappeared over the last 50 years of globalization.

The "compromise" concluded on Tuesday uses creative bookkeeping to kickstart the program. The company created to build the canal will become a "regional" entity. The regions, over the coming two years, will front the financing of the initial costs to start the program, and later be reimbursed by the French state, which will raise a new national tax on a local basis. The regions also volunteered to be the security for the loan.

Since it is the French regions and not the state per se which will go into debt, France’s so-called deficit will remain within the Maastricht 3% criterion. In the current insane system, only creative tricks can allow rational policies: rather than the French state financing the regions, the regions are financing a giant infrastructure program whose impact is national and global. It’s great, and good news for the New Silk Road, but not a model of Hamiltonian state credit and banking.