The Sharp Spur of Adversity

To an extent, Sarkozy has been unlucky. Factors beyond his control — America's subprime crisis and possible recession, rising world oil and food prices — have slowed French economic growth to 1.9%, below the lowest end of the government's estimate for 2008. Salaries have been largely frozen since 2001, which means that flagging purchasing power has joined unemployment as the biggest worry for the French. Despite campaign pledges that he'd be "the purchasing-power President," who would "go out and find economic growth," Sarkozy has been unable to ease pressure on consumer pocketbooks.

But the parlous state of the global economy is not the whole story. Whether it was booming or bust, the plain fact is that Sarkozy has not so far dealt with the sclerosis in France's institutions. The nation's pay-as-you-go pension scheme faces bankruptcy as baby boomers retire and leave fewer people paying into the system. France's enviable health service leaks red ink, and its public-education system continues turning out well-schooled students largely unprepared for the job market. Payroll taxes extracted from companies and employees to finance state services are blamed for higher labor costs that undermine French competitiveness.

Tackling such challenges would demand more determination than Sarkozy has summoned until now. "The reforms undertaken so far have been pretty low-risk, because they've tended to target relatively small interest groups," says political analyst and Sciences-Po professor Dominique Reynié. "It'll be a different story if Sarkozy starts the tough reform of shrinking the state. That would mean asking people to work even longer and get a smaller pension; to get less reimbursement of health expenses; and to suddenly see fewer teachers in schools and fewer cops on the streets."

The current political context, an Elysée adviser admits, makes launching such "heavy" reforms difficult. But Sarkozy has some strengths. Whatever the left's potential gains in city halls, incessant warring among Socialist leaders leaves the right facing little effective national opposition. Sarkozy's conservative Union for a Popular Movement has a massive majority in France's legislature. And with French state finances stretched to the breaking point, there is a chance that Sarkozy will slash spending in the summer and aim at balanced books between 2010 and 2012.

Will that happen? "So far Sarkozy has rolled out policy on a case-per-case basis, and has tried to project pragmatism as a program," warns Reynié. That, of course, sounds just like Chirac — and Sarkozy was supposed to epitomize a rupture from his predecessor's practiced ability to avoid tough choices. Within the next few months, we'll know if he really does.