The electorate’s romance with Nicolas Sarkozy is well and truly over—not least because the president no longer seems to know what he wants
“THE French people,” he announced on the day he was sworn in as president, “have demanded change.” Proclaiming “a new era in French politics”, the dynamic young leader swept into office, vowing to modernise the face of government and the country. Despite a promising start, however, the global economic shock, combined with divisions on the political right, took their toll. In the end, Valéry Giscard d’Estaing lost to the Socialists in 1981, after just one term in office.
Over the past 30 years, Mr Giscard d’Estaing is the only French president not to have won re-election. Now, for the first time, the spectre of a one-term presidency has begun to hover menacingly over France’s current leader, Nicolas Sarkozy. His popularity has dropped to record lows. Some 55% of the French say they want the left to return to power at the next presidential election, in 2012. One poll suggests that, in a second-round run-off, Mr Sarkozy would be beaten by Dominique Strauss-Kahn, a socialist who is now the IMF boss in Washington, by a crushing 59% to 41%.
Even on the political right there is a groundswell of discontent. Dominique de Villepin, a former prime minister, has launched his own party to scoop up disillusioned Gaullist voters. Deputies mutter about losing their seats. Some of Mr Sarkozy’s own ministers have voiced unease at the way he spent the summer expelling Roma (gypsies). Bernard Kouchner, his foreign minister, who hails from the left, considered resigning. French magazines have begun to run cover stories such as “The 2012 Presidency: Has he Already Lost?”. Among Mr Sarkozy’s own supporters, from the fields and factories to the parquet-floored salons of Paris, disenchantment has set in. Fully 11.5m voters who backed him in 2007 failed to support his party at regional elections in March, according to Pascal Perrineau, a political scientist.
This autumn is crunch time for Mr Sarkozy. On September 7th 1.1m-2.7m people (depending on who you talk to) took to the streets for the biggest one-day strike in France for years. Teachers, train drivers, postmen, town-hall staff, utility workers and other mainly public-sector protesters are contesting his plan to raise France’s legal minimum retirement age from 60 to 62, as well as job cuts. Next to other European efforts, the pension plan appears modest. France faces a state pension-fund shortfall of €42 billion ($54 billion) by 2018 to fund some of the longest retirements in Europe (see chart 1). The new rules will close less than two-thirds of the gap; general spending will have to fill the rest. Current workers will still pay for those in retirement. Generous benefits remain untouched; civil servants get 75% of their final six-months’ salary. One government insider says that the retirement age should, in truth, go up to 65.
The reform does, however, carry symbolic importance. It reverses a decades-old French tradition of progressively cutting the time people spend in work: François Mitterrand lowered the retirement age from 65 to 60 in 1983. And it is a crucial test of Mr Sarkozy’s ability to stand firm, court unpopularity in the name of the greater national interest and restore his credibility as a reformer. For, despite his dire poll numbers, Mr Sarkozy is not finished yet. This mercurial politician may find it difficult to summon the warmth or likeability to charm the French back to his side. But he may yet be able to impress them, if he can placate the one-time supporters who suspect that he has lost his audacious touch.
What broke the spell between the French and Mr Sarkozy? Grumpiness is natural at mid-term. Voters deserted the two previous presidents, Jacques Chirac and Mitterrand, at a comparable point; yet each went on to win a second term. Mr Sarkozy has had to deal with a global recession, which has crushed growth and battered the country’s morale. Jean-Paul Delevoye, the state mediator (or ombudsman), said earlier this year that the French were “psychologically exhausted”. Two recent bestsellers include “Mélancolie française”, a historical reflection on French decline, and “Le Quai d’Ouistreham”, an account of life in poverty in a northern French town.
Yet there is more to the disenchantment than this. When observers ask, “Why have the French fallen out of love with Mr Sarkozy?”, the answer is that they never truly fell in love with him in the first place. The French did not warm to Mr Sarkozy as a person. In polls voters judge him “determined” and “courageous”, but never “reassuring” nor “close to the French”. They knew they were electing an atypical, outsiderish leader, not an affable father figure: they had had enough of that under the torpid Mr Chirac. With no countryside roots, nor taste for wine, nor diploma from any elite French college, and a weakness for bling to boot, Mr Sarkozy was quite unlike any of his predecessors. His mother’s father was a Jew from Thessalonica; his father immigrated from Hungary, and once told him that “With a name like yours …you will never get anywhere in France.”
Rather, French voters saw past his strange tics and foibles to his hyper-kinetic, can-do style, and his unstuffy willingness to tell it straight and get the job done. This was a man of verbs, not abstract nouns like la gloire or la grandeur. He told the French bluntly that they could not afford their high-tax, high-security, low-growth, low-employment model indefinitely, and promised a “rupture” with the complacency of the past. Enough of the French knew, deep down, that something was not working, and judged him best placed to fix it. The simplest reason for disappointment, therefore, is that Mr Sarkozy has failed to bring about what he promised: more jobs, more growth and better earnings.
To which the simplest explanation is: the recession. Mr Sarkozy handled the financial crisis well, thwarting consumer panic at home, steering crisis talks in Europe and swiftly concocting a stimulus plan. The doubts, however, concern whether he has done enough to help lift the French economy on to a faster-growth, higher-employment path once the global economy recovers. The French government spends 56% of GDP, more than any other euro-zone country, yet France has above-average unemployment (10%) and its GDP has grown at below the annual European average over the past ten years. The factors that cushioned the French economy from severe recession—high public spending, a strong state, low reliance on exports—now seem to be crimping growth again (see chart 2). Christine Lagarde, the finance minister, has cut the 2011 forecast for GDP growth from 2.5% to 2%.
Mr Sarkozy can point to a good deal of useful reform on his watch. He has loosened labour laws, encouraged overtime work, cut red tape for entrepreneurs and lowered taxes. He has kept increases in the minimum wage to inflation, and tried to limit union power and disruption during strikes. He has boosted competition in telecoms and retail, as well as spending on research and development, and trimmed the public payroll. Ms Lagarde says that she has done “80%” of the reforms recommended by the Attali Commission’s report on improving French competitiveness.
One of Mr Sarkozy’s better reforms has been a shake-up of France’s mediocre, centrally run universities, with their crowded amphitheatres, drab campuses and libraries that close at weekends. The system churns out far too many psychology or sociology graduates, who find their degrees useless in the job market. Law or medicine aside, top school-leavers study madly for a place at the elite grandes écoles instead.
Today, however, 51 universities out of 82 have accepted Mr Sarkozy’s offer of autonomy, enabling them to recruit their own lecturers, fix their salaries and seek private finance. They have raised nearly €60m, and have begun to lure French researchers back from abroad. Valérie Pécresse, the higher-education minister, has shocked the universities’ egalitarian civil-service culture by forcing them to compete for money to refurbish their campuses. Of the six originally picked (Bordeaux, Grenoble, Lyon, Montpellier, Strasbourg and Toulouse), none was in Paris, to the capital’s outrage. The reform is imperfect: there is still no selective entry for undergraduates. So all those with the school-leaving baccalauréat can sign up for wherever they wish; and over two-fifths of undergraduates drop out. There are no tuition fees. But by injecting ideas like competition, independence and private finance, Mr Sarkozy has begun a mini-revolution.
The rest of the picture is far less inspiring. Many other reforms launched in the whirlwind first year do not go as far as promised. Mr Sarkozy put an end to special pension rules, which had allowed some railwaymen to retire at 55, but at a cost of agreeing to more generous rules governing beneficiaries’ final pensions. The reform, according to Pierre Cahuc and André Zylberberg, two labour economists, brought no financial savings. Mr Sarkozy loosened labour laws, but he never took the 35-hour maximum working week off the statute book. The two-tier labour market debars outsiders, notably the young, and sets up perverse incentives. High costs and protection—the labour code runs to 2,600 pages—deter employers from creating permanent jobs. For employees earning above the minimum wage firms pay 45% in payroll taxes, next to 13% in Britain. Redundancy rules dictate generous tax-free packages, which can be combined with unemployment benefit at up to 75% of salary. Managers say this encourages long-serving employees to try to get fired.
A disappointing menu
Along the way, Mr Sarkozy has made some poor choices. He abandoned good ideas (the deregulation of taxis and pharmacies), while wasting political capital on bad ones (his plan to abolish investigating magistrates). Other decisions have been daft. One was cutting VAT in restaurants to 5.5%, which involved a fierce battle with the European Commission and costs the tax-payer €2.4 billion a year. Restaurants were required in return to drop prices on just seven items on their menu—and only half have done even that. Diners scanning the pricey plats du jour feel ripped off.
Up to a point, Mr Sarkozy had to give ground in order to get things moving. France has a long tradition of theatrical street protest, which tempers even the most reformist politician. In 1995, when Alain Juppé was Mr Chirac’s prime minister, he was forced to back down on pension reform after weeks of strikes. Politically, Mr Sarkozy also needed to take a tough line on curbing financial excess. The French felt, not unreasonably, that their jobs and savings were being put at risk through no fault of their own, while bankers pocketed vast bonuses as their bank profits collapsed.
But Mr Sarkozy, a live wire, warmed so fast to his new theme, bashing hedge funds and blaming tax havens, that it has become hard to make out what part is gesture politics and what part genuine conviction. The man who urged the French to reconcile themselves to globalisation later declared that “laissez-faire capitalism is finished”. The man who implored the French to stop knocking wealth creation then vowed to stop French carmakers building vehicles in low-cost countries for the French market.
His own voters have been left thoroughly confused. Does he want to modernise the French social model, or reinforce it? Does he want to make France more competitive, or limit competition? Does he want to roll back an over-heavy state, or return to Colbertist interventionism? These questions are no easier to answer now that Mr Sarkozy has belatedly agreed to an austerity plan to curb the government’s deficit, from 8% this year to 6% next. The champion of the worker is now wielding the axe, cutting jobs in teaching, hospitals and the police force.
“Half of what he has done has been clever,” concludes Jacques Delpla, an economist who once worked for Mr Sarkozy, “and half either badly done, or not done at all.” It is a measure of impoverished ambitions that, according to presidential aides, there are no more big plans on the table after pension reform. “Next year,” says one, “we will improve or polish existing reforms, not begin anything new.”
The perils of perpetual motion
To watch Mr Sarkozy up close is to observe a machine in perpetual motion. He strides into rooms and taps his feet when bored. He zig-zags the country four times a week, dropping in on hospitals, factories or farms. Yasmina Reza, a playwright, wrote of this restlessness as a desire somehow to “combat the slippage of time”. Mr Sarkozy is a man in a hurry. Yet, after three years in office, voters have begun to feel dizzy. The style used to dazzle; now it often dismays.
The frenetic, action-man manner is more than just appearance. It is also about the exercise of power, and the nature of French presidential office. Traditionally, the president ran only foreign and defence policy. Mr Sarkozy, by contrast, has stuck his finger into everything, from the number of taxis on Paris streets to the petulant behaviour of the French national football team. All top decisions are made by a close team of advisers at the Elysée presidential offices. Ministers are kept on a tight leash.
Accruing so many powers carries risks. One is that Mr Sarkozy cannot resort to that familiar French ploy of blaming his prime minister, François Fillon, when things go wrong. Indeed, Mr Fillon enjoys far better poll numbers than his boss. Another is that it has given Mr Sarkozy exaggerated ideas about what he can do which, when exposed, breed disillusion. He promised, for instance, not to let Arcelor-Mittal, a steelmaker, close part of a factory in eastern France, only for it to shut down anyway, with the loss of 575 jobs at the site. His failure to delegate has also created a clannish atmosphere at the Elysée, in which advisers hesitate to tell Mr Sarkozy, who has a fearsome temper, when he is wrong. “It’s very difficult to talk to him as an equal,” comments one old friend.
This has led to some staggering errors of judgment. Mr Sarkozy failed last year to grasp how nepotistic it seemed when his son, Jean Sarkozy, an undergraduate, tried to run for the presidency of the body overseeing the Parisian business district of La Défense. One junior minister is still in place despite admitting to having use of two official lodgings. Another spent €116,500 of tax-payer’s money hiring a private jet to take him to an aid conference in the Caribbean (he has since resigned). Yet another charged €12,000 of Cuban cigars to expenses (he also quit).
Most egregiously, Eric Woerth, the pensions minister, remains in office despite a conflict of interest linked to the Bettencourt affair. This is an ongoing dynastic court case centred on Liliane Bettencourt, the billionaire heiress to the L’Oréal cosmetics empire, which touches alleged illegal financing of Mr Sarkozy’s UMP party and alleged tax evasion. Mr Woerth was previously budget minister, and led a clamp-down on tax evasion at a time when his wife, Florence, worked as Mrs Bettencourt’s wealth manager (she has now resigned). He was also UMP treasurer while the Bettencourt family was a donor. Mr and Mrs Woerth deny doing anything wrong. But the affair smells rotten.
With such a faltering touch, Mr Sarkozy seems particularly prone to extreme measures to boost his standing. This summer he blew a relatively small problem concerning illegal Roma into a national drama by stepping up expulsions, closing illegal camps and sounding a xenophobic note. He is also changing the law to strip nationality from naturalised citizens who deliberately endanger the life of a police officer. Both moves—which polls suggest meet with voter approval—look like gimmicks to woo the far right, and a decoy to distract public attention from his mixed record on crime and the banlieues. For, despite promises of a Marshall plan, a toxic mix of high unemployment, drug-running and resentment festers on the heavily immigrant estates that ring French towns.
Nicolas Baverez, a political commentator, sums up Mr Sarkozy’s problem in terms of “transgression”. The French did want a leader who would shake things up, he argues, but he went too far in the wrong places, touching sacred elements of the presidency: dignity in office, a respect for parliament and judicial independence, the separation of private and public life. The clubbish links between the Elysée, certain business and media bosses, even the judiciary, are troubling. In a country where public life has traditionally stopped at the bedroom door, many French people are dismayed to hear the president’s advisers comment publicly on the state of his marriage to Carla Bruni. Nobody wants a return to the hypocrisy of the past. But something of the solemnity of office has been damaged.
In time, some of the movement that Mr Sarkozy has set in place should nudge France out of its comfort zone. It could be, for instance, that a small group of universities will offer students a real alternative to the grandes écoles. For all his faults, Mr Sarkozy has done more than Mr Chirac ever attempted. And the tempestuous French do not make it easy. Fully 93% of French respondents say they think their fellow countrymen moan a lot.
Yet France is not the same place that Mr Juppé ran. Many voters realise that they cannot defy the laws of demography and economics for ever. Although 70% of them said this week that they supported the strikers, 53% also agreed that the rise in the retirement age was “acceptable”. Those who do not enjoy the protection of public-sector jobs no longer feel so inclined to back the cause of those who do.
Mr Sarkozy has been in politics for over 30 years, and knows its recent history intimately. Back in 1976 President Giscard d’ Estaing’s prime minister resigned unexpectedly, and founded his own party. That ambitious man was Mr Chirac, the party became the one Mr Sarkozy inherited, and the move split the right and wrecked Mr Giscard d’Estaing’s chances of re-election. To avoid a similar fate, Mr Sarkozy knows that he needs to restore his credibility and his grip. He may not gain many friends by holding firm on pension reform. But he will lose the ones he has if he fails.
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