Page last updated at 05:39 GMT, Wednesday, 10 November 2010

Has Sarkozy's reform agenda been derailed?

Watch Allan Little's Newsnight report in full

By Allan Little
BBC News, France

Christine Lagarde
Finance Minister Christine Lagarde says the reform agenda is still on track

"The French," an exasperated Parisian friend once said to me, "don't do reform. Nothing changes here till everything changes. The French do revolution rather than reform. That's why we are on our Fifth Republic".

He was talking in the mid-1990s, when I was the BBC's Paris correspondent.

For a decade, French governments of various stripes had flirted with radical reform, aimed at sorting out the country's public finances, only to back away when those reforms proved bitterly divisive, and protest spilled onto the streets.

Nicolas Sarkozy - elected president in 2007 - promised a break with all that. He campaigned on a programme of radical reform, promising a "rupture" with the reassuring certainties of the past.

Rising debt

About five years ago when he was, briefly, the country's finance minister, I went to hear him present his annual budget to the media.

All he wanted to talk about, it seemed, was the deficit. He was angry. He was resolute. He was passionate.

France was wasting untold millions every day, he said, just paying the interest on its outrageously high public debt.

Successive French governments had spent more than they had raised for 30 consecutive years.

It is actually 36 years now, the last year in which France balanced its books was 1974.

France was living beyond its means, he said, and it had to stop. The country was paying for its enviable life-style by borrowing - in effect sending the bill to its children and grandchildren.

Strikers in France
Millions protested against the controversial pension reforms

The problem, as Mr Sarkozy saw it, was easily stated. When Francois Mitterrand came to power in 1981, national debt was not much more than 20% of Gross Domestic Product (GDP).

By the time his successor Jacques Chirac left office in 2007, it was around 65%.

Mr Sarkozy said it had to stop. I remember how shocked even centre-right French journalists were that day. They had never heard a political leader speak so bluntly, promising, in effect, painful times ahead.

The French left began to call him "Sarko l'Americain". They warned that he would destroy France's cherished "social model" and embrace an Anglo-Saxon-style free market capitalism.

But still the French voted for him, and decisively.

Post-Gaullist leader

As the BBC's Paris correspondent I had begun to argue that Mr Sarkozy had it in him to become France's first post-Gaullist president. He was prepared to challenge some of the articles of faith of the Gaullist consensus.

One of those was that he was not afraid, it seemed, to divide the French against themselves, to pitch Frenchman against Frenchman in the pursuit of reshaping the country.

For decades in France, the idea that social harmony is sacred, has deterred reform.

President Sarkozy and Carla Bruni
Some have criticised the president's jet set lifestyle

So three years in, what has happened to the great reformer's determination to get on top of the national debt?

It was 65% of GDP when Sarkozy took over - it is now heading into the low 80s now and is set to go higher still.

Mr Sarkozy's ambitious economic reform plans have, like everything else, been side-swiped by the global financial crisis.

France's Finance Minister Christine Lagarde is widely admired outside France, especially in the English-speaking world.

She insists the reform programme is still on track.

Ms Lagarde points out that both houses of parliament passed Mr Sarkozy's controversial pension reform, despite the protests by millions of ordinary French citizens.

The minimum retirement age will increase from 60 to 62.

Recruitment has also been frozen in the large French civil bureaucracy. Public servants who retire are not being replaced.

Target of satire

On top of that, a planned economic stimulus package has been withdrawn.

Is that really enough, I ask Ms Lagarde, to rein in the costs of France's public sector?

"The deficit," she insists, "will come down from its current 8% to just 3% in the next four years." That, she concedes, also assumes an optimistic rate of economic growth and increased tax revenues.

Even if she is right, it might all come too late for Mr Sarkozy. His personal approval rating has fallen off a cliff. And only partly because of what has happened to the economy.

There is a second reason, and one that resounds more clearly in the national political conversation. It is Mr Sarkozy's own personal style.

"We elected a president whose first public act was to go to an expensive restaurant and celebrate with wealthy friends, and then to take a holiday on a millionaire's yacht," says the author Daniel Pennac.

"He makes speeches against the rich, but it is all hypocrisy. Unemployment goes up and so does inequality."

The comedian Christophe Aleveque has built Mr Sarkozy into a bitterly satirised caricature, called Zebulon (after Zebedee in the Magic Roundabout).

In his two-hour, one man show it is references to Zebulon that are guaranteed to draw the biggest laugh from his audience.

"How do you get your audiences to laugh about Sarkozy?" I ask him. "It's easy," he said. "You just have to repeat word for word what he said on the news the day before."

Three years ago Mr Sarkozy was the champion of reform who won a decisive victory in the presidential election.

He has become - even for many who supported him - a figure either of fun, or of contempt.

Can he turn it around in time for his 2012 re-election campaign?

"I hope so," says the ever-optimistic Christine Lagarde, before adding "desperately".

Sarkozy ratings graphic

Watch Allan Little's full report on Newsnight on Wednesday 10 November 2010 at 10.30pm on BBC Two, then afterwards on the BBC iPlayer and Newsnight website.

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