Sarkozy's vindication depends on tangible results

Last night, French President Nicolas Sarkozy vigorously defended his policies during a prime time television show, and vowed to pursue his reformist agenda come what may.
Questioned by a panel of eleven French citizens from all walks of life selected by the French television network TF1, he sought to allay their fears, as well as those of the nation at large, claiming that the worst of the economic crisis was behind us.
A recent poll highlighted the issues the French believe Sarkozy should be concentrating on: unemployment (48%) the state retirement scheme (39%), and the standard of living (32%).
On the unemployment front, the President argued that France’s performance was far from mediocre. France resisted better than most, for the unemployment rate doubled in the US, doubled in Spain, and increased by 60% in the UK. Only one nation was more successful than we were, and that is Germany, the President asserted. Yet, an additional 450,000 did join the ranks of the unemployed in 2009, he admitted.
Currently, 9.5% of the population is unemployed, some 2.7 million people. Of those, the young have the greatest difficulties in finding work: almost 25% of those between 15 and 24 are jobless, the highest rate in Europe.
Nevertheless, he insisted, the situation is improving, and he believes the French economy will start creating jobs anew in 2010. The economy is expected to grow at a rate of 1.5%, and not the dismal 0.75% previously announced, a sign that the recovery may be accelerating.
In France, the unemployed are more generously taken care of than elsewhere, Sarkozy added. They are financially assisted much earlier, and for much longer (two years) than in most countries. As such, though the unemployment rate is high, no other allocations will be created. France’s problem is not working less, but more, he said. As such, France does not need additional handouts, but growth, jobs and innovation, he added. Promoting economic growth is the key to creating jobs.
In order to improve the private sector’s competitiveness, Sarkozy recently abolished the taxe professionnelle, affecting all businesses and used to finance local councils.
Sarkozy also plans to reform the nation’s retirement pension system, an explosive issue here. Currently, all those employed are entitled to retire at the age of sixty, and benefit from a state pension. In some industries, the retirement age is fifty-five, if not fifty…
In order to prevent the system from going bankrupt (currently, 10% of all pensions are not funded), the retirement age will have to be increased to sixty-one or sixty-two, to begin with. There is a growing consensus that something needs to be done, for life expectancy rates have vastly increased since the end of the Second World War. Even the opposition Socialist party leader, Martine Aubry recently admitted as such.
He vowed to preserve the system (le régime par répartition) whereby those currently employed contribute to a fund that provides the pensions of the retired. He hopes to have a bill ready by the summer…
The third major issue is the standard of living that has been battered by the financial and economic crises. The issue is a sensitive one, especially in the current context. The salaries of CEOs have made headlines and been much discussed of late, particularly Henri Proglio’s, the man Sarkozy chose to lead EDF, the French, publicly-owned energy giant. As CEO, he will earn 1.6 million Euros per year, or 150 times the minimum wage, a fact repeatedly emphasized here.
Sarkozy defended these wide disparities in salaries. I prefer a good CEO who is well paid, to a badly paid, mediocre one. What I find shocking is a high salary that is not proportional to great responsibilities. To press his point, he criticized the bloated salaries of soccer stars.
For Sarkozy, the surest way to earn a better paycheck is to work more. This is why one of his first measures was to exonerate from income and social taxes all overtime hours, in order to encourage the French to work more, and employers to provide additional opportunities for overtime. That, he claims, is the only way to stimulate consumption, economic growth, and thus job creation…
Although he was clearly in command of the issues, and his arguments cogent, was his performance a convincing one?
Predictably, the opposition was merciless in its assessment.
One Socialist leader, Pierre Moscovici, called the exercise rather pitiful.
The official Socialist party spokesman, Benoît Hamon accused Sarkozy of having given up on the major issues confronting the country.
Not so long ago, the standard talking point was that Sarkozy was doing too much. Now, it seems, he is doing too little…
For Manuel Vals, an up-and-coming Socialist leader, his policies are lacking something vital and essential, the notion of justice, he declared.
The far right leader, the octogenarian Jean-Marie Le Pen accused Sarkozy of resorting to shameful lies, with the complicity of a compliant television network.
The centrist François Bayrou denounced the President’s lack of stature last night and the absence of any vision for the future.
The main, leftist opposition‘s line of attack has been the following:
Sarkozy has chosen sides, and caters to the rich and influential…
Laurent Joffrin, a prominent columnist and editor of the leftwing daily Libération, wrote that the President defended his policies with indisputable skill…And yet, here resides the main weakness of his policies, even if they are adeptly defended, in the eyes of those present, and those who were watching, the sacrifices imposed by the recession were unfairly apportioned.
Sarkozy is thus dismissed as defending the wealthy, at the expense of the middle class. The charge is facile, but potent in a time of economic crisis.
Perhaps it is the resurrection of the classic left-right debate. The Socialists are still seething due to the bouclier fiscal (the income tax shield) he instituted in 2007, and which limited the top tax bracket at 50%.
They have been clamoring for its repeal ever since, finding it unconscionable that the earnings of the wealthy should not be taxed more than 50%…For them, this was a clear sign of where Sarkozy’s allegiances resided.
Sarkozy and his supporters argue that alienating and overtaxing the rich will not help France’s downtrodden and only benefit London, Geneva or Brussels where they are bound to relocate. Though that line of reasoning does have some merit, it holds little sway in egalitarian France.
In addition, Sarkozy has refused to adopt the Socialists’ populist and opportunistic agenda. At the height of the economic crisis, he rejected calls to nationalize (in whole or in part) banks and automobile manufacturers preferring to provide financial assistance instead (thereby earning the state some two billion Euros in interest on the funds devoted to the financial sector). He considered that the policies the Left was advocating were mere replicas of the failed policies of the past. It is precisely the excessively burdensome and meddlesome presence of the state in the nation’s economy that has limited France’s growth these last thirty years. As such, Sarkozy argues, why resurrect a model that has clearly failed?
In a time of economic crisis and dislocation, however, it appeals to many…
People yearn for protection at any cost.
Nicolas Sarkozy has two years left to press his case.
Yet, his vindication can only come through tangible results on the economic front.
If the economy rebounds, the unemployment rate falls and the standard of living, however slowly, begins to rise anew, then he will be justified in claiming that his policies, though controversial, were adapted to the context at hand.
Until that happens, however, all his energy, drive and eloquence will not suffice in reassuring a nation worried about the present, afraid of the future, and uncertain of its place and status in a globalized economy…
(the photograph above is by Gérard Cerle/AFP)