WHEN IN DOUBT, SHUFFLE THE CABinet. That seemed to be the logic behind the sudden resignation last week of Prime Minister Alain Juppe. Immediately reappointed by President Jacques Chirac, Juppe unveiled a new, more streamlined Cabinet that left all the key ministers in place but opened the door to a handful of supporters of presidential also-ran Edouard Balladur. The goal: consolidation of a conservative majority behind the tough belt-tightening reforms that Chirac has decided the country needs.

Juppe, 50, portrayed the shuffle as "a new phase" in governmental action. To many observers, however, it seemed more like a desperate tactical move. With his personal credibility damaged by revelations of his sweetheart rent deal in a city-owned apartment building, Juppe had seen his approval rating drop to a microscopic 12% in one survey earlier this month. More than by the whiff of scandal, perhaps, Juppe's standing was weakened by charges that his economic policies were incoherent and "unreadable."

Critics pointed to the striking gap between what the Chirac campaign had promised to do--cut taxes, create jobs, boost wages and prime the economic pump--and what the Juppe government has done since taking office last June: raise taxes, freeze public-sector wages and axe spending. In a landmark TV interview on Oct. 26, Chirac in effect declared a policy U-turn: he put top priority on reducing deficits in order to meet the Maastricht Treaty's tough criteria for joining Europe's single currency by 1999. Meeting those conditions, which limit the size of public debt and budget deficits, Chirac said, would mean two years of austerity.

Last week's shake-up, which put an end to one of the shortest-lived governments in the history of the Fifth Republic, seemed to confirm Chirac's commitment to deficit-slashing reforms. The Cabinet was reduced from 41 to 32 members, mostly by eliminating junior ministers--including eight of the 12 women originally named.

Among the incoming Balladurians were Marseilles Mayor Jean-Claude Gaudin, Minister of Territorial Administration and Cities; Alain Lamassoure, Deputy Minister of the Budget; and Dominique Perben, Minister of Civil Service. Labor Minister Jacques Barrot, meanwhile, was promoted to head a new superministry combining Labor and Social Affairs. The influential and experienced centrist will thus become the point man for the upcoming reform of the national health system, which is likely to spark strong popular resistance. This week Juppe will present a bill expected to broaden the tax base and scale back medical reimbursements, in an effort to slash a $12 billion deficit in social spending. The budget battle has begun.

--By Thomas Sancton/Paris