Can This Man Tame France?

It's a complaint made with particular resonance by political commentator Nicolas Baverez, whose best-selling book France Is Falling has turned national decline into the No. 1 topic among the commentariat. Baverez says the shocking results of the first round of presidential elections in April 2002 — when French voters put far-right National Front leader Jean-Marie Le Pen into a runoff with Chirac — amounted to "a national cry of distress." The massive mandate for Chirac in the second round, bolstered by parliamentary elections in June 2002 that gave conservatives a 68% majority in the National Assembly, handed Raffarin "an extraordinary possibility to make enormous changes," Baverez argues. But he thinks that opportunity has been wasted out of political cowardice. This government, he writes, is "betraying the reforming mandate given by the voters in April 2002."

Malek Boutih, an outspoken Socialist Party official, says the government's mandate wasn't so much for reform as for stopping Le Pen. But that doesn't mean it can afford to spin its wheels. "If this government sits and waits things out," he says, "it risks exhausting public patience, and finally convincing a lot of people that mainstream politicians are just a bunch of incapable losers."

Raffarin is good at reeling off lists of accomplishments: "We've battled the crime problem, improved the justice system, streamlined the police and modernized the army." But he's pulled a good many punches, too. Not until next autumn will the government tackle a major reform of France's free-spending health-insurance system, which is bleeding some j10 billion a year. And when it came to repealing the 35-hour week altogether, Raffarin demurred. "We can't do everything the first year," explains Raffarin aide Jean-François Cirelli. He acknowledges that the government's public-pension reform won't go even halfway to bridging the estimated j43 billion funding chasm that will open between now and 2020. Now, though, both private and public employees will have to work longer to get a full pension, and "it will be an easy matter to raise the contributions down the line if we have to," he says. That still leaves him hoping unemployment drops by the next national elections in 2007, so that any increase in pension payments is offset by a fall in unemployment benefits.

The government has made some genuinely popular moves beyond putting more police on the streets. In September, it passed a 3% cut in income tax, which only about half of French households earn enough to pay. But joy was muted — the announcement was swiftly followed by rises in local taxes and taxes on diesel fuel and cigarettes. "People feel it's just a game: what the government gives with one hand, it takes with the other," says Elie Cohen, an economist and professor at Sciences Po, a Paris graduate research institute. "That creates a credibility problem." The government clearly botched the announcement of the new taxes, but Cirelli insists taxpayers still end up ahead. And the government bravely stands by Chirac's vow to reduce income tax by 30% before 2007 as a way — "a little bit American," Cirelli confesses — of forcing spending cuts. But cost cutting hasn't been seriously tackled yet; the 2004 budget holds inflation-adjusted spending level rather than reducing it, which makes getting to a 30% tax cut something of a stretch.

That leaves a lot of pain still to be administered and endured. Next year's budget, like this year's and last year's, remains out of line with the 3% deficit limit imposed by the E.U.'s Stability and Growth Pact. Raffarin has dismissed the pact as "mathematics," but smaller states that have done their fiscal homework aren't amused. Yet making France pay a fine during an economic slump could hurt its neighbors, too. "We're ready to do what the Commission demands," Budget Minister Alain Lambert said last week, "as long as it bears no risk of pushing France into recession."

The great hope for Raffarin is one that he admits remains largely outside his ken: a return to growth, starting in the U.S. and Japan and hopefully spreading to Europe by the beginning of next year. Once the economy picks up, he vows, he'll tackle the vision thing with more gusto, focusing on completing his reforms of the pension and health-care systems and pushing power and money from Paris to the regions. To get there, Raffarin will have to confront ornery unions, suspicious voters and the Parisian élite who believe the Prime Minister is a symptom of French decline. "France is too hierarchical, too pyramidal," he says. All the decline-mongers are "like the cork in a champagne bottle judging the champagne. That cork has to pop so we can taste the champagne." There's still a long way to go before the celebrations can begin.