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Hypo thesis 1: The greater Paris is not part of the European economic model

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As we have seen, the European Union is functioning under the liberal theory. Nevertheless, the French
government has, as we have previously seen, been an important interventionist state. According to
Vivien Schmidt, the French government realized during the 80’s that their traditional economic system
of interventionism based on the Keynesian model was not efficient anymore, because of the global
economy change(93). Indeed the Keynesian tools lost their efficiency with the free trade development in
Europe, as the economic recovery of 1981 has shown the limits of the fiscal policy. Indeed at this time
the economic recovery helped more the German economy than the French one.

But is this project of Grand Paris from a Keynesian model? We could argue that yes, the government
is using the multiplier effect in order to generate some economic growth. By the willing of the state to
invest in new transports infrastructures, we can directly see the correlation with the Keynesian policy.

Indeed, according to the Prime Minister report, the economic objectives of the project are in these
words “to obtain a Keynesian effect on the economy”(94). The government will inject some money in the
economy through important construction projects, in order to obtain the multiplier effects of the
General theory of Keynes.

This is why we can seriously think about the economic impact of the Greater Paris on the economy,
because of the discordance of the French and European economic models.

We can see where would be a major problem for the Greater Paris in its goal to create an economic
growth. Article 14 of the loi relative au Grand Paris precise that “la societé du Grand Paris” has to
select the actors which will be in charge of the construction of the new automatic transport
infrastructure according to competitive criterion(95).

Because of this law we can see a threat for the Parisians and French companies. Indeed, the
construction of this automatic line will cost approximately 20 billion of Euros. The region and the
government will have to issue a call for tender, and will maybe have to entrust the project to a foreign

As previously seen, the François Mitterand’s policy of 1981 had used a Keynesian model to recover
the French economy at this time. But because of the free trade area of Europe, the French consumption
has generated more imports from Germany, as the German products were more competitive regarding
to their price.

This is why we can link this historical problem to the Greater Paris model. As the “Societé du Grand
Paris”, the project should create approximately one million jobs. Nevertheless, this forecast should be
strongly reduced if for example a company from Eastern Europe would win the tender.

Indeed, this eventual foreign company could “import” its labor force to France, without hiring French
labor force. This would impact the economic recovery expected by this investment, because of the low
hiring rate for the transport system construction.

So no, the Greater Paris cannot be considered as part of the European economic model as it is an
application of the Keynesian model. This is why, because of the European economic infrastructure; we
can analyze some threats which could reduce the expectations from this project regarding the
economic recovery objective.

Nevertheless, this analyze has to be moderated, because the injection of the money will still be
effective. Indeed, this project will still increase the consumption in France (even if the construction of
the new public transport system, will just be ensured by foreign labor force, the moving of this
population to France would still increase the French market consumption). We also have to notice the
human benefits of this project (people closer to their work place, so maybe more efficient at work),
which can also be taken into consideration, with no matter concerning the economic model used.

93 V. Schmidt, “From stake to market, the transformation of French Business and government”, University of
Cambridge, 1996, P.P. 175
94 Premier Ministre François Fillon, « Projet de loi relatif au Grand Paris étude d’impact, 2009, P.P.31
95 Assemblée Nationale, « Projet de Loi relatif au Grand Paris », Décembre 2009, P.P 16

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