Braced for change, looking for a leader

France

Sep 8th 2005 PARIS
From The Economist print edition

As fears grow over the president's health, his lieutenants compete to lead France out of its doldrums

HOSPITALISED presidents make the French uneasy. François Mitterrand hid his cancer behind false medical reports for over a decade until his first operation, in 1992; he died four years later. Georges Pompidou's cancer became public only after his death from it while in office. So the news that President Jacques Chirac was to spend a full week in hospital, after a “small vascular incident” in the brain which affected his vision, prompted much speculation about the 72-year-old's health. If the problem is as minor as officials say, in formal terms nothing should change. But, symbolically, everything has.

Even before his hospitalisation, Mr Chirac had become politically enfeebled after the French rejected the European Union constitution in May. At the same time, his new prime minister, Dominique de Villepin, has been growing in stature. This week, that impression intensified, as Mr de Villepin chaired the weekly cabinet meeting usually presided over by Mr Chirac. More than ever, the Chirac era seems to be drawing to a close. And two of the men competing hardest to offer a fresh alternative are from his own Gaullist political family: Mr de Villepin and Nicolas Sarkozy, an ambitious interior minister, and head of the ruling UMP party.

Since politicians returned from their summer break, the pair have been competing to upstage one another. In a speech last week, Mr de Villepin unveiled a new phase of reforms, including the promise of income-tax cuts in 2007. Mr Sarkozy replied with two separate speeches this week, launching his own raft of proposals, and declaring that “nothing, and nobody, will stop me going all the way”. At the party's summer school, in front of the television cameras, Mr de Villepin kept Mr Sarkozy waiting in a beachside café while he jogged along the sand and dived into the ocean. Until recently, it seemed the popular Mr Sarkozy had no credible rival on the right. No longer. One poll this week put Mr de Villepin's popularity as a potential 2007 presidential candidate at 57%, second only to Mr Sarkozy, at 63%.

In political style, the two men could scarcely differ more. Mr de Villepin is aristocratic, polished, a diplomat. Mr Sarkozy is pugnacious, plain-talking, a lawyer. Conventional wisdom has it that their politics are wide apart too. Loyal to the president whom he served for seven years as chief-of-staff, Mr de Villepin is his political heir. But Mr Sarkozy, who backed a rival candidate against Mr Chirac in 1995, has always marked his political distance from the veteran Gaullist. Yet a close look at the two politicians' speeches this week hints at something new: Mr de Villepin has begun to steal some of Mr Sarkozy's clothes.

Breaking taboos in a welfare-cushioned society, the prime minister declared that he wanted to “restore the value of work” and “make work pay”; Mr Sarkozy talked of the need to “make work central” and to reward “the France that gets up early in the morning”. Mr de Villepin vowed to crack down on welfare fraud and to balance welfare “rights and obligations”; Mr Sarkozy insisted that there would be “no rights without equivalent obligations”. Mr de Villepin said he would end heavy taxes that “discourage work and damage the attractiveness of our country”; Mr Sarkozy called for a limit of 50% on combined personal taxes and insurance contributions. Both promised help for the middle class.

To be sure, these similarities are quite differently wrapped. Mr de Villepin says he wants only to “set the French model straight”, whereas Mr Sarkozy intends to “reinvent a new French model”, that “breaks with the past 30 years of traditional political life in this country”. Yet the trend is nonetheless striking. Already, Mr de Villepin has introduced a new, more flexible two-year employment contract for small firms, addressing the problem of labour-market inflexibility that Mr Sarkozy so often bemoans. And he has declared himself against Turkish entry to the EU, another of Mr Sarkozy's pet positions—in line with public opinion but against Mr Chirac's (and hence France's) position.

Why this apparent quest for a radical alternative from within the president's own party? The answer lies partly in the war of succession: after this week, a third term for Mr Chirac must surely be ruled out. But also in the electorate's general disgruntlement, which partly explains the French “no” earlier this year. Unemployment has begun to drop a little, to 9.9%, but remains structurally high. Fears about job losses are undermining confidence at a time when the cost of living, worsened by high oil prices, is already squeezing purses. The economy is expected to grow by only 1.5-2% in 2005. And, after ten years with Mr Chirac in the presidency, there is a sense that it is time for a change.

As always, the difficulty is only partly in agreeing what reforms are needed. The harder question is how to bring them about. In many ways, the mood in contemporary France feels similar to that of Britain in the late 1970s. A political discourse of anti-capitalism has taken hold, accompanied by revolutionary communist and Trotskyite movements reminiscent of Britain's Militant Tendency and other hard-left class warriors in the 1970s.

Populist egalitarianism is preached with little regard for wealth creation. Union leaders are household names, and enjoy an influence disproportionate to their numerical importance in the workforce. (For the French firebrand José Bové, think Arthur Scargill, the noisy leader of Britain's miners). Intermittent paralysing strikes and street demos are regarded as normal (a widespread strike has been called for October 4th). Politicians promise “economic patriotism” and fear de-industrialisation. State-owned giants such as EDF, the electric-power utility, are considered national treasures, as British Steel and British Coal once were. A bloated state saps public finances. And the country is infused with a mentality of decline.

Plainly, the parallel is not perfect. France is not facing the financial crisis that forced Britain to borrow from the IMF in 1976. Its private companies are in fine form, which was not the case for corporate Britain at the time. But there are enough similarities to prompt hard questions for France. If there is no crisis to match the one that led the British to elect (and re-elect) Margaret Thatcher, are the French nonetheless prepared for uncomfortable change? After all, much of this civilised, well-kept country, of high-speed trains and sit-down lunches, does not behave like a place on the edge of the precipice. Mr Sarkozy, for one, believes his compatriots are ready. “The French”, he declared, “are not afraid of change; they are hoping, waiting, calling for it.” The question then is: who best incarnates it?

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