Europe Decides

Nicolas Sarkozy had promised he would overhaul France. He starts by overhauling its administration – quite symbolic in France. The new Ministries to be created will reflect the changes in policy and the change he wishes to publicize to his electors.

Two major changes stand out: the break-up in two parts of the almighty Finances Ministry (“Minefi”) and the regrouping under the banner of Sustainable Development of Transportation, Environment, Industry and Territorial Management (plus maybe also Energy Policy but this tricky one is still being fought for).

So there are now a Ministry of Ecology, Sustainable Territory Management & Development” (sounds awful in English, and even in French…); a Ministry of the Economy, Finances & Employment and a Budget, Public Accounts & Civil Service Ministry.

Sarkozy ensured that the newborn Environment Ministry is led by a heavyweight by naming former Prime Minister Alain Juppé. The two others will be led, respectively, by former Social & Employment Affairs Jean-Louis Borloo and former UMP CFO MP Eric Woerth.

You may wonder why the policy areas these last two cover have similar-sounding names. Well, despite the names they will have different responsibilities: Borloo for economic strategy, employment and finances, while Woerth will have the civil servants, the Social Security budget and… finances. At this stage it seems unclear what exact power Borloo will have with the budget.

More soon.

Dominique de Villepin, who was President Chirac’s Prime Minister for 714 long, hard days, gave his formal resignation to the President this afternoon. Unusually for a French politician, he is expected to go back to private life and leave politics aside. There is an afterlife even for Prime Ministers… in Harvard, as it is rumoured?

The Prime Minister’s resignation is the last formal step before the outgoing President hands the executive power to his newly-elected successor. However, this does not mean Nicolas Sarkozy has not started pushing his agenda: amid the usual rumours about potential picks for the restricted 15-member Government expected to be named between Thursday and Monday, a few names have already popped up and a few heads rolled down: a new head of police forces (DGPN), the expected dismissal of the DST (the “French MI5″), etc.

Sarkozy is “locking the doors” before he goes on with more public policy annnouncements next week. He does not seem intent to a complete revamping of the French “système des dépouilles” (executive privilege over top jobs picks) as he had promised, though. Maybe later?

The “third man” is in dire straits. François Bayrou, who before the first round of the presidential election was courted by both left and right, became a pariah after Sunday’s coronation of Sarkozy by the French.

Although he theoretically wields significant political power with his 18.5% of the vote, he has to prepare for the general elections due in June. And this is where it hurts: 22 out of the 27 MPs the UDF has at the Assemblée nationale have chosen to rally Sarkozy. They wish to be re-elected, and the only way to do so in the current situation is to please Sarkozy so that he does not push for a UMP candidate in their constituency – in the past this ensured them election as they gathered all votes from the right. Another right-wing candidate would split the vote and eliminate them.

Bayrou is due to announce today the creation of his brand new center party, the Mouvement Democrate (MD) with a little help from his 7 friends left. We’ll know more after his press conference this afternoon, but the MD’s prospects at the general elections look very pale.

Is this yet another sign of the clear “great divide” of French politics? Once again the centrists’ dream to create a genuine, powerful center party looks doomed.

Mr. Sarkozy won going away and put a serious dent in the socialist platform. But as is always the case in politics they honey moon is short lived. The real nemesis for Sarkozy lies ahead in the form of a picket line — organized labor. No country loves a good strike like France. In fact it is called out in the preamble to their constitution. Sarkozy will have to move delicately in taking on the million and half representatives of labor who have shown time and time again they can shut down the country and its economy. But at the same time we have seen the ineffectiveness of the approach taken by Chirac and Villepin who buckled at the first sign of a protest following their proposals on employment contracts a few years back.

Unfortunately, tough times require tough measures. And you don’t always win popularity contests when making such decisions. Thatcher took on the miners and won but at great political costs. But one could argue it set the course for Britain’s economic recovery. Similarly Ronald Reagan stance against the air traffic controllers drew a line in the sand with organized labor in the states. Granted the US and the UK aren’t France, but the similarities lie in the state of France at this moment. France a proud nation is currently looking at their shoes instead of sticking their chins out as they have so often done in the past.

Chirac a master politician was doing little to instill pride in the nation, other than an occasional thumb in the eye of America over international policies. That made for good theater but did little to reduce the size of the unemployment lines in the Republic. His last chance at drama will be when he begrudgingly hands over the codes to the nuclear arsenal on May 16th.

France is in a state of morass, as Jimmy Carter once said of the U.S., and it will take a strong leader to move them forward. Sarkozy has the will but if the trains aren’t running he may not be able to get to the office to do much about it.

Sarkozy and Royal have been fighting last night the very last round of this presidential election in this debate broadcasted almost everywhere in France. Jere is right: much ado about nothing. Apparently, the French do agree on this as the post-debate polls all point to the same conclusion: Sarkozy supporters are still, and even more, convinced that he is the right candidate for the presidency just as Royal’s supporters have been conforted in their choice that she is the best candidate to lead France.

More interesting is the poll results indicating that Bayrou’s supporters have been overall a bit more convinced by Sarkozy than by Royal: but in French politics, the tacit rule is “do not EVER trust centrist voters” as they may change their opinion in the very last minute…

Le Monde, France leading “elite” daily, endorsed Segolene Royal recently. Today its editor Jean-Marie Colombani pointed out interesting facts and conclusions drwan from last night’s debate. One should be of relevance for Americans: he talks about Sarkozy’s policies as being a kind of “compassionate conservatism” - keeping in mind that in France such comments and references to George Bush’s policy platform and concepts amount to a very sharp dagger under the journalist’s cloak.

However, Colombani admits in the end that however flawed Sarkozy’s program may be in his eyes, it has at least the merit of being politically coherent. So if the French choose him, they’ll know what to expect…

What’s an American to do when his command of the French language is limited to bonjour, merci and un baguette s’il vous plait? Turn down the volume and watch the body language. Going into last nights debate I thought Madame Royal needed to coax Monsieur Sarkozy into the middle of the ring and show his darker, meaner side. In fact, Sarko appeared to have turned the tides on her and got her to lose her temper over handicap children and schooling.

Polls gave the victory on the debate to Sarkozy, but polls are only as good as the questions they ask. I would give him the edge simply on my criteria that he kept his cool. There was nothing new covered in the debate and no great quotes that will be remembered like Lloyd Bentsen’s retort to Dan Quayle — “Senator you’re no Jack Kennedy.” A great quote, but hell everyone in America except for my dog and three year old niece already knew that.

But despite the barbs, it is interesting to watch the body language and presentation of the two candidates. Both always look impecable in their dress and presentation. If nothing else they serve as great fashion mentors to aspring politicians. (Footnote: wear a tie and lose the Members Only jacket to make an impression).

We will know more on Sunday if the debate moved the needle. Conventional wisdom says Sarkozy should win and all of my French colleagues say the same, but there have been other sure bets that did not pan out as expected.

I for one will not be surprised at all on Monday if I am prefacing the President of France’s surname with Madame.

With an outstanding rate of 85% of voters, France has managed to demonstrate that its democracy is probably livelier than ever. Kicking off all the extremes, both from the left and from the right, the three main candidates have also proved that the new generation of politicians was highly expected by the French public opinion, keeping in mind that:

• Sarkozy with 30,5% managed to get the best score for the first round of a presidential election in 30 years;
• Royal with 25,7% managed to gather the main “leftist” forces for the first time since Mitterrand;
• And Bayrou with 18% will not be in the second round but has a card to play in the third one (i.e. the general elections to be held in June) in which he could disorganize the bipolar equilibrium that the upcoming Sarkozy/Royal final fight for Presidency could lead to.

I heard Jean-Pierre Raffarin (our ex-prime Minister) in Brussels 2 weeks ago. I would like to quote him to illustrate the dilemma with Bayrou.  Raffarin was explaining that the trouble with Bayrou is that on very important dossiers such as energy, Bayrou would not be able to make any move. He would promote wind turbins to please the socialists/left but would power them with nuclear to get the support of the right.  

Perhaps the French candidates could use a touch of James Carville as they head down the home stretch — after all as a native of Louisiana, the ragin cajun probably has some French ancestry in his background. With 40 percent of the population still undecided on which lever to pull this Sunday in the first round of the French elections maybe the candidates could use the help of Frederic Bastiat (renowned French economist). Because, all the candidates have danced around the most important issue facing France — it’s lagging economy.

As some of their best and brightest leave for the UK and America, all the candidates point to the effect, rather than the cause of the problem. Extremely high unemployment for young french men and women entering the workforce — particularly those of Middle East and African origin — a growing state payroll and employment laws that in effect enforce a job for life rule on the employer make for a perfect economic storm.

Who ever makes it to the second round should be thinking about what types of changes are needed to sustain the culture, lifestyle and economic prowess that has allowed France to maintain its swagger on the global stage. Will it be the reincarnation of Napoleon or Joan of Arc? Whom ever it is, let’s hope for the sake of the French citizens they have a plan. Otherwise the only ones reaping financial rewards from this election, will bet the bookies taking bets on the outcome of this very tight race.

Pressure is mounting for candidates in the French presidential election. If the last one in 2002 proved anything, it was that nothing can be taken for granted before the final vote is counted: French voters enjoy proving wrong those who think they can predict how the public will vote. And this election is sure to beat all records for the number of polls published - more than 300, compared to barely 200 in 2002. The number has increased for many reasons, but particularly due to a change in the rules which govern this practice, making it so that polls can now be published during the final week before the vote.

All polls tend to predict the same outcome Sarkozy with 27-30%, Royal with 25-27%, Bayrou back to under 20% (after having threatened Royal for a couple of weeks) and Le Pen with around 12%. All the others are predicted to be below 2% - even Arlette, the record-holder for women in presidential election (since 1974 she has participated in all of them) who managed in 2002 to get over the 5% threshold (the limit to get public funding for election expenses) is predicted to not exceed the 2% mark. But one should be rather careful with these predictions. Firstly because to-date, they have never managed to get it right: according to the polls, Giscard d’Estaing would have been re-elected in 1981, Mitterrand would not have been re-elected in 1988, Balladur would have been president in 1995 and Jospin in 2002.

Secondly, polls are inaccurate because the people they interview rarely tell the truth: “never trust a Frenchman” seems an appropriate motto regarding French polls.

And thirdly (and most seriously) there is a very strong bias in the way French polls are conducted: they only interview people who are registered in phone directories, i.e. individuals with a landline. However, around 30% of French people with a phone only have a mobile phone, which means that a third of the French voting population is structurally ignored by the polls. Worse yet, most of them are below 35 years old, and many have never voted before.

With so much uncertainty, polls are just badly designed crystal balls and most people in France agree that 22 April could bring a big surprise. Actually, there’s a poll which confirms that 85% think there will be a surprise This one, however, I’m inclined to believe in.