Nicholas Sarkozy: Pragmatic Realist in the Service of France; Or a Media President on the Make

Nicolas Sarkozy: Pragmatic Realism in the Service of France? Or, A Media President on the Make?

After winning the Presidential election with 53% of the vote, the French right suffered a serious erosion of its electoral strength in the final round of the legislative elections, taking only 47.8% against the left’s 46%. After the first round on 10 June, all polls pointed to an overwhelming victory of the UMP, Nicolas Sarkozy’s platform for political power. The expectation was 405-425 seats for the right and less than 100 for the left. The final tally shows that the swing voters moved to the left on 17 June. In the end, the UMP and the New Center will have 323 seats and the PS and its supporters will have 205, a loss of 50 seats on the right from the last National Assembly and a gain of approximately that number on the left.
So what happened? With the abstention rate at a record 40%, the easiest explanation is that the right, confident of victory, simply did not get out the vote. But that’s only part of the story. A better explanation is a monumental error on the part of Jean-Louis Borloo, Minister of Finance and Economy. On 10 June, in a televised debate with Laurent Fabius, Borloo suggested that a hike in the VAT could help pay social security costs, transferring a part of the tax on labor to a tax on consumption, a kind of social VAT. Fabius and the PS in general seized on that offering to explain that while only 3% of the income of the more fortunate goes to paying VAT, over 8% of the income of more modest income earners goes to paying the consumption tax. To make matters worse, a few days later François Fillon actually gave a number, a 5% increase. Having just refused any further increase in the minimum wage over the 2% indexed increase due in July, the new government was in trouble with an electorate eager for reform, but less eager for transferring the cost to those at the bottom of the scale. All this while President Sarkozy was visiting Poland, trying to get the brothers Kaczynski to compromise on their sensible defense of Poland’s voting power in the European Council of Ministers.
Despite Sarkozy’s belated intervention saying that taxes were coming down not going up, the damage was done. The center voters, particularly the 7 million who voted for François Bayrou in the presidential elections, shifted from the right to the left, changing the balance of electoral power in a significant fashion. Only a few hundred votes saved Arnaud Montebourg, Ségolène Royal’s spokesman during the campaign, from defeat. And only 670 votes defeated former right Prime Minister, Alain Juppé, the number two of the Fillon government and Minister of the Ecology, Energy, and Sustainable Development. Montebourg, symbolic of the young lions ready to take on the heavy weights of the PS -- the so-called elephants -- sees his future firmly in place. Alain Juppé paid dearly for being faithful to Chirac and his Gaullist legacy. Founder of the UMP in 2002, the unified party of the right, Juppé saw it hijacked by Nicolas Sarkozy. And if Sarkozy invited Juppé to take charge of a super ministry in the Fillon government, he insisted that he, like all the ministers in the new government, stand for election and win. Having lost in Bordeaux, Juppé has honored his engagement and resigned from the government, his political ambitions shattered. But Sarkozy and the local members of the UMP urged Juppé to retain his place as mayor of Bordeaux. Juppé then announced that he would stay on as mayor and work to make Bordeaux “an exemplary community, generous…and just.”
The elimination of Alain Juppé provided the Sarkozy-Fillon tandem with a challenge and an opportunity. The challenge was finding a replacement for a Ministry that was cut to measure for Juppé. The opportunity was to remove Jean-Louis Borloo from Bercy, the Ministry of Economy, Finance, and Employment and to replace him by the talented Christine Lagarde. The sensible ask: how can Sarkozy promote Borloo, the man responsible for the loss of 100 seats in the National Assembly? The answer, it seems, is that the shift is not really a promotion at all. Industrialists have been calling Sarkozy and Fillon saying that Borloo was not terribly energetic in his first month on the job and that a more forceful personality is needed at the key post of Finance. Borloo was too nonchalant, too social for the austere technocrats of Bercy. His replacement, Christine Lagarde, the first woman ever to hold the job in that very macho ministry, will give an international and liberal twist to policy. The Wall Street Journal voted her the fifth most important woman in European affairs and Forbes placed her in the 76th position among the most powerful women in the world. Formerly Chairwoman of Baker and McKenzie, she is a tenacious defender of French agricultural and economic interests as Peter Mandelson’s experience during the World Trade Organization talks can testify.
The upshot of a reduced UMP legislative majority is not entirely unwelcome. It consolidates power among those deputies with the strongest local support, an important element is selling the government’s program to the French. And the small parties on the left and right, having been eliminated from significant representation, will see the new legislature as truly bi-polar, giving the UMP a mandate for reform and the PS the legitimacy of a true party of the opposition. With two hundred plus seats in the new National Assembly, the PS has a responsibility to engage the right in the debate over the proposed reforms. More importantly, it is representative of a strong current of public opinion that wants reform but not at the expense of a particular category of French citizens, particularly not those most exposed to forces of globalization. And here France might just be in the process of finding an historic compromise. On the right, globalization has been accepted as a fact of life. On the left that realization is gradually dawning. Only 14% of the electorate of the PS believe in socialism. The rest favor a brand of social democracy without, of course, that dated nametag. The question then for the PS is not so much ideological, but generational.
Who is going to lead the PS? The power struggle that opened in the primaries leading up to the militants overwhelming choice of Ségolène Royal was played out during the campaign. Rarely did Royal appeal to the heavy weights like Strauss-Kahn or Laurent Fabius for assistance. In fact, she was repeatedly at odds with the policy line traced out by François Hollande, the First Secretary of the PS and, as fate would have it, the father of her four children. The tragic melodrama of their impending separation introduced an element of sentimental disorder into an already dysfunctional campaign. With the campaign over, their relationship ended, Hollande and Royal now struggled for control of the party. Hollande, having stood aside to allow his companion to be the candidate, has been shown the door of conjugal household. And even if he is well liked within the PS, Hollande’s political leadership has ended. A place holder, Hollande continued presence as Party Secretary is only a sign of the immobility of the PS. A power struggle for his position as is wide open. Royal wants the job. But so does Strauss-Kahn, former Minister of Finance; Bertrand Delanoë, the present Mayor of Paris; and Laurent Fabius, the man who betrayed the PS by campaigning against the ‘Yes’ vote for the Constitution of Europe but who saved 100 seats for the PS in the new National Assembly. On the left, the hunting season has opened early. The old guard, defined in terms of the personal leadership of those who served with François Mitterrand, control the National Council of the PS. The younger militants, who joined the party to support Ségolène Royal, are eager to have their turn. On 23 June, the party leadership met in Paris. Absent was Ségolène Royal. She preferred to appear on television in populist fashion to put her case before the French.
The struggle can be defined neatly as a confrontation between Ségolène Royal, who attracted 17 million votes in the May presidential election, and the official party leadership composed of the ‘old guard.’ And here is Royal’s major problem: only presidential contests in France are won at the national level. All other decisions require the party apparatus to chose candidates, decide policy, and spend money. Lacking the party’s financial and political support, it will be extremely difficult for her to translate popular support into political power. In effect, she risks the same fate as François Bayrou, popular with the voters and having a legitimate claim to national representation, but incapable of translating that popularity into effective political action. The mechanisms of electoral democracy in France simply do not permit “the people” of the left or the right to plebiscite a leader to power. Given Europe’s history, that restraint is not so bad.
If this election buried anything, it was the antiquated ideologies shaping foreign and domestic policy. First, in foreign affairs the Gaullist claim to French exceptionalism, that strident and strained assumption that France had an historical responsibility to lead Europe. The nomination of Bernard Kouchner, the founder of the Nobel Prize winning Doctors Without Borders (S.O.S Médecins) to the Ministry of Foreign Affairs speaks volumes about the new international image that Sarkozy wishes to fashion for France. Kouchner will be a partner, not a lesson giver, in European construction with specific recommendations for going forward.
A good example of this new and constructive approach is Sarkozy’s surprise recommendation at the G-8 meeting in Heiligendamm, Germany in early June that the fate of Kosovo be discussed for another six months, a compromise suggested in his meeting with Vladimir Putin and recently taken under consideration by the United States.
Second, in domestic affairs the reform of the French social model is inevitable. And here the French political landscape resembles Germany’s. The reforms put into place under Gerhard Schröder and accentuated under the coalition government led by Angela Merkle of the CDU, have allowed Germany to transfer the cost of social security from a labor tax to a consumption tax. Together the reforms permitted Europe’s first economy to lower public expenditures by 2% of GDP in three years to 45.6% in 2006, down from 48.5% in 2003. And that’s under the EU average of 47%, just behind Ireland, Spain, and Luxembourg. As in Germany, both principle parties in France have agreed that salaried employment cannot continue to bear the burden of financing the social security system. And, more importantly, the changes in Germany’s distribution of the burden for the social welfare system have a necessary consequence on her European partners. The transferring of social costs to consumption directly reduced factor costs of production in Germany. Effectively reducing production costs, it achieves what exchange rate depreciation used to achieve. In a word, it is a competitive devaluation. And when Europe’s most productive and most profitable economy makes such a move, there’s little alternative to its trading partners and rivals in the European Union but to follow suit.
Looking forward, what can we expect from a Nicolas Sarkozy presidency? Without listing the series of reforms that will be discussed in July’s extraordinary parliamentary session, the first and most important challenge for the new government has been and must continue to be the conquest of public opinion. With 74% of the public supporting Sarkozy, he now benefits from a state of grace that no president in the Fifth Republic, excepting De Gaulle in 1965, has enjoyed. Imitating Clinton and Blair, Sarkozy will be a media president, constantly occupying the public space, constantly selling his reforms to the French. Rather than withdrawing into the presidential chambers to preside, as did François Mitterrand and Jacques Chirac, Sarkozy, like Louis XIV before him, will be his own first minister. He intends to govern and to change France and to do so he understands that he has to communicate and convince the public.
But will the street have the last word? The received wisdom suggests that confronted with reform, the French will take to the streets. The government will back down. The status quo will win. France will lose. There’s plenty of historical evidence to make that course the ‘received wisdom’. That was the political culture of the past where un mouvement social defended les acquis sociaux. That had the ring of martyrs spilling their blood to defend a sacred sanctuary. The realist would have described what was happening differently, saying that the street, (the metaphor for the transportation unions, truck drivers and students) took the country hostage in defense of the privileges of a restricted and protected elite. But social protest brought governments to their knees and forced capitulation because of the public’s widespread support for the protesters. Public opinion was and remains the key to successful political action. Come September the French might be in the streets but the public want reforms – at least reforms that share the cost of change equitably and not in terms of a rapport de force. Having realized that society cannot be changed by decree, Sarkozy has initiated a dialogue of sorts with social and economic actors. He has also reached out to widen his majority, making peace with the center and even inviting socialists into his government. If this is a genuine attempt to build a large and inclusive coalition that can initiate and sustain reform, all the better for France. If these are only cynical and Machiavellian electoral gestures, aimed at dividing the opposition and seducing the public, then results of the second round of the legislative elections suggest that the French are watching.
Most recently, Sarkozy showed his extraordinary political talents through a spectacular intervention in Brussels to win support for a mini-treaty for the European Union. At 4:30 on 23 June 2007, Angela Merkel announced that the 27 member states had reached a “good compromise,” allowing for a modification of the previous treaties binding together that states of the European Union. Most essential was the concession to the Polish Kaczynski twins whose Germophobia had nearly derailed a settlement. Reluctant to accept the two tier voting system that requires a 55% of majority of the member states and a 65% majority of the population of the EU, the Polish leadership insisted on voting power to be decided by the square root of the population of each nation. Justifying this position, they said that Poland lost a lot of people in World War II, a statement that reveals how pertinent history remains in Central Europe. Merkel’s response was a threat: she said that an intergovernmental conference would be called to decide the issue, implying, of course, Polish isolation. Then there was advanced the idea that EU funds to Poland, a manna of sorts for the Poles, would be drastically reduced.
Enter Sarkozy. A talented, open, but persistent negotiator, Sarkozy met with Lech Kaczynski. He brought in Tony Blair, José Luis Zapatero, and Jean-Claude Junker to join the negotiations. After several hours, a compromise was reached, the Poles accepting the new voting system, but under the condition that it would not go into effect in 2009 but only in 2014. In addition states, such as Poland, would have the ability to insist that certain decisions be postponed until 2017 should they be in disagreement.
His role won him a phone call from Ségolène Royal and extensive praise on the left and right in France. But more than the historic compromise for the Poles, he won something for France -- the elimination of the phrase that free and unimpeded competition would be an objective the European Union. And this much to the dismay of Tony Blair and the British delegation. But The British won their concession regarding the symbols of EU. No mention in the new Treaty of the EU flag or EU hymn even if these still exit. Nor would the EU have a Minister of Foreign Affairs, only a High Representative. A significant advance was the decision to eliminate the rotating presidency in favor of an elected two and a half year presidential term. Even if the federalists, such as Romano Prodi, the president of the Italian Council of Ministers, lamented the results, there’s a general sense in Europe today that pragmatic realism won the day. And realism seems to be the order of the day. In light of his performance at the earlier G-8 meeting and the EU meeting, expect Nicholas Sarkozy to shift French politics away from confrontation and towards negotiated compromise. And if the conference on Darfur, opening in Paris on 25 June is symptomatic of this new direction, expect a more active role for France in Africa and the Middle East.
But free competition – read free trade – will not be an objective of French or EU policy. Trade negotiations involving China, the United States, and the European Union are going to take a turn for the worst. If that is possible.