PARIS — French ministers are back at work after the three weeks or so of rest they were granted following their first 100 days in office. The least one can say is that the tasks ahead of them won’t be easy. Crime has increased by 3 percent in spite of the new Cabinet’s vow to make crime-fighting a top priority. Unemployment increased by 0.9 percent in July, depriving the state of important revenues and compelling it to spend more to help the jobless.
There’s nothing specifically French about this situation; it mainly results from America’s economic slowdown. The severe fall of stock markets worldwide over the past several weeks eliminates any hope of a fast recovery.
When the number of businessmen and bankers presently being prosecuted in the United States for their roles in corporate scandals is added into the equation, the near bankruptcy of giant French communication group Vivendi is leading more and more people to question the alleged ability of economic liberalism to meet all challenges.
President Jacques Chirac is by nature an optimist. Like his former prime minister and rival, Lionel Jospin, he obviously expected much brighter prospects. Hence his solemn promise during his re-election campaign to cut income taxes by 5 percent for roughly half the population.
German Chancellor Gerhard Schroeder, who faces a very difficult general election on Sept. 22, had made a similar commitment. But he has already warned that tax cuts would be postponed for a year due to the dramatic financial toll taken by the recent floods in eastern Germany.
In France, however, the campaign promise of tax cuts leaves Prime Minister Jean-Pierre Raffarin’s Cabinet no possibility of following Schroeder’s example, despite the fact that, as a EU member, France will have to give substantial financial assistance to flood victims in Germany, Austria, Czech, Hungary and Romania.
Making matters worse, the 12 members of the euro zone are committed to keeping their budget deficits from exceeding 3 percent. To that end they signed a “growth and stability pact” that mandates stiff penalties for countries that fail to meet this obligation.
For the time being, it’s hard to say how France will comply. Jospin, who anticipated a balanced budget by 2004 when the pact was signed, still believed as late as last spring that the deficit could be limited to $31 billion. It has since risen to $45 billion. Now Raffarin is at pains to obtain from the EU commission an extension to the commitment.
To tell the truth, France is not isolated on the issue. It is clear Portugal and Italy will be unable to meet their commitments, and Germany has already hinted that its deficit would likely exceed the 3-percent ceiling.
Given these conditions, the floods in central Europe may have provided a welcome excuse to postpone the imposition of penalties. But any respite granted won’t keep Raffarin from asking his ministers to make drastic cuts in areas such as research and education, especially since the health sector now faces severe personnel shortages and since Chirac is insisting on substantially improving French road security — at present the worst in Europe — and significantly increasing military expenditures to enable France to have a greater voice on international issues. Add to this a recent increase in the nation’s minimum wage, and it becomes clear that Paris needs more money than ever.
Where can additional funds be found? Tariffs have already been raised in the transportation and electric-power industries, which are still owned by the state. Leftist governments have already privatized more than their conservative predecessors. The Chirac government is determined to sell part of its holdings in Air France, Renault, Electricite de France and other companies, a move that is expected to meet strong resistance in places where the Trotskyites, who made unexpected gains in the last elections, have very strong followings.
Therefore, the situation the Cabinet will face in coming months is not an enviable one. But the absolute majority of the pro-Chirac Union for the Presidential Majority in both Houses of Parliament provides it with a substantial asset — which the party intends to institutionalize via a major change in the electoral law.
The change will limit the number of candidates to two in the second round of elections, considerably reducing the political impact of both the extreme-right and the communists. France’s system will become similar to the two-party situation in the U.S. and Britain: Chirac’s right against the Socialist Party.
Will the Socialist Party make a rapid recovery from its disastrous electoral defeat this past spring? It’s very unlikely. No one has managed to occupy the leadership vacuum created by Jospin’s retirement. The former prime minister himself is under attack by one of his former ministers, Marie Noelle Lienemann, who describes him in an upcoming book as a “pessimist surrounded by autists. A bit short, in any case, to be president.” Clearly the party is too strongly divided between its right and left elements to present a credible alternative to the ruling party.
Will Raffarin be able to exploit this situation to win the deep popular support that he lacks? It largely depends on the length and extent of the global economic crisis. Meanwhile, he looks increasingly determined to use all the tricks he learned in his previous occupation as a communications professional to try to win the hearts and minds of the people.
What he brings above all is his willingness to be in close contact with a great many people and to speak in simple, intelligible and image-laden language.
Some of his statements, however, seem rather strange, such as: “I try to prevent the spirit of a system from taking possession of my software. My government isn’t a mammoth one. We want to be creative, active and reactive.”
Will the effect of this innovative speech match his expectations? It’s too early to say, but the fact is that all too many disappointments have made the French rather skeptical.
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