Up to a Better Tomorrow

Leila Fathi, 20, a law student at the University of Nanterre, outside Paris, has been spending every day of her spring break in the library. After four weeks of demonstrations during which her university was blocked and idle, she and her co-students have a lot of catching up to do before exams. Fathi was in the thick of the protests. "We always knew we would win," she says. "Of course the government had to back away from their law after such a show of force, but who would have thought it would take four weeks of protests to bring them to their senses? So it wasn't a real victory, but at best a partial one, which has brought us back to the normal state of affairs."

Judging by recent French history, the students' victory is likely to be partial for other reasons, too. The same combustible sequence of events that killed Prime Minister Dominique de Villepin's contested youth job bill has played out in identical fashion twice before in the past decade. Huge protests confronted the government's attempt to overhaul pensions in the mid-1990s, and they broke out again when it tried to shake up the Finance Ministry in 2000.

In both cases, the government also backed off, with serious consequences. The 1996 climbdown by then Prime Minister Alain Juppé helped bring a socialist government to power the following year; in the 2000 debacle it was Finance Minister Christian Sautter who lost his job. But here's the twist: years later, both sets of reforms have happened anyway. The national pension system was revamped three years ago. The Finance Ministry, long a bastion of public-sector inefficiency, is today one of the few government departments that is successfully reducing its head count, cutting costs and improving productivity. So, if the truly "normal state of affairs" prevails in France, some watered-down version of Villepin's employment measures may well creep through at some point in the future.

France is spectacularly good at saying non. Naysayers are often fêted in heroic, Joan-of-Arc terms; when the student demonstrations exploded in March, Paris Match ran a thrilling cover photo of two young people locked in a dance-floor embrace in front of a cordon of riot police. But behind the scenes, more quietly and with no discernible romance, France can and does also say oui. For every rock-throwing protester posing for TV cameras outside the Sorbonne, there is a polished technocrat in an anonymous office patiently pushing the modernization envelope. The changes those technocrats can institute are limited, less sweeping in scope and slower to take effect than grandiose political programs, but they're often more effective. They underline the truth that France is a prosperous nation whose public services are often superb and whose private companies are frequently world-beaters. And they undermine the international cliché — a cliché the French themselves like to propagate — that France is impossible to change.

Bruno Parent is one of the change agents. He's a top civil servant at the Finance Ministry and played a key role in bringing about the transformations there. The failed Sautter plan would have cut costs by merging two huge tax administrations within the ministry. Both are still in place; Parent and his colleagues left the structures largely alone, but looked at ways to eliminate the overlap. "I prefer progressive reforms that succeed even if they take five years," Parent says, "to more ambitious and more rapid ones that run the risk of being a complete failure."

That's typically French. In Germany and Scandinavia, change happens after considered debate and lengthy analysis. In France, by contrast, it tends to be convulsive and born of conflict: one violent leap backward followed by two surreptitious steps forward. It's Houdini, not Thatcher. "If you only think of reform in terms of the Big Night, you'll never get anywhere," says Jean-François Copé, the government minister officially charged with reform of the state.

In its own way, the incremental approach can bear fruit. Over the past decade, governments of both left and right have privatized or partially privatized most of the major French companies that were state-owned. Each privatization was bitterly contested, and the whole program only took off after strikes at automaker Renault — and following catastrophic losses at state-owned bank Crédit Lyonnais. But change happened, and the firms and France have both thrived as a result. Similarly, France is less at risk than some of its neighbors from the costs of an aging population, partly because of the 2003 pensions reform.

These days, it's the health-care system that needs work, as the government seeks to curb spiraling costs without sacrificing a high standard of care. Doctors, nurses, paramedics and many others around the country are up in arms; some are on strike. Inefficient French hospitals aren't closing, in contrast to Germany, where several hundred have shut down. But the government is introducing a rigorous new accounting system that for the first time details the cost of every service. Perhaps most significantly, the workings of the national budget have just been revamped; a new law requires government ministries to justify every item of their spending. The French are some five years behind Britain and Sweden with such measures, but they hope to learn from others' mistakes. If they can, the new system could put an end to reckless French government spending that has led to a fivefold increase in the national debt to €1.1 trillion over the past 25 years. "It signals a big shakeup," says Jean-Raphael Alventosa, a budget expert at the Cour des Comptes, the national accounting office, which will get more clout. Even France's love affair with hugely expensive — but glorious — infrastructure projects is changing: the Millau viaduct, the world's highest road bridge that opened last year, was entirely financed by the private company that built it. In the past, the French state would have automatically footed the bill.

1. Why McCain Picked Palin
2. McCain's Prickly TIME Interview
3. The Palin Pick: Bold or Disastrous?
4. McCain's Surprise Pick: Sarah Palin
5. Klein: Obama's Speech 'Very Tough'
6. Obama's Risky Stadium Gig
7. Exclusive Poll: Obama's Swing Leads
8. Is McCain Overplaying the POW Card?
9. What Bush Taught McCain
10. Clinton Builds a Bridge to Obama