France’s prime minister: Ambitious

Date: 13/09/03

Jean-Pierre Raffarin is embarking on a bold programme

APPOINTED for his consensual style and convivial image, Jean-Pierre Raffarin increasingly looks like a prime minister determined to stamp his own mark. Since the return from the summer break, and seemingly unflapped by the scandal over the shocking number of deaths from last month's heatwave, he has announced a series of measures set to exasperate one quarter or another, whether the European Commission in Brussels, his government, or even the French electorate.

First, Mr Raffarin stated that France would breach the 3% budget-deficit limit imposed by the European Union's stability pact; France may go to 4% in 2003, making it the worst offender in the euro zone. It could well stay in breach, added his budget minister, Alain Lambert, until 2006. The casual abandon with which Mr Raffarin is flouting the rules is infuriating the commission, already at loggerheads with the French government over its summer bail-out of Alstom, an engineering group. “My duty”, the prime minister blithely told TF1, a television station, “is not to solve mathematical problems to please a particular office or country.”

Then the prime minister jauntily declared that he would go ahead with a 3% income-tax cut next year, despite the reservations of his own finance minister, Francis Mer. The cautious former steel boss had reportedly wanted to limit the cut to 1%. Moreover, this promised tax cut, to go with an increased tax credit for low earners, will not be balanced in the short run by spending cuts. The 2004 budget, to be unveiled later this month, will only freeze, not cut, public spending. Given that the French economy is perilously close to recession - GDP shrank by 0.3% in the second quarter of 2003, after growing by a tiny 0.2% in the first - the public finances look ever more shambolic. Is there any logic behind this apparent recklessness?

In the short run, Mr Raffarin simply wants to fire up the economy with a fiscal boost. But he may also have a more ambitious plan: to try to reinvigorate France's “old Europe” economy with broader reforms. As a former businessman, and as a member of the market-oriented Liberal Democracy branch of the ruling party, Mr Raffarin believes in the need both to unleash business and small enterprise, and to encourage French workers to stay at their desks. Hence, in part, a tax cut that will mainly benefit the well-paid: half the tax reduction, by one calculation, will end up in the pockets of the 6% who already earn most.

Certainly, Mr Raffarin's government has a sense of momentum behind it. He and his colleagues, such as Nicolas Sarkozy, his interior minister, constantly refer to it as a “government of action”. Haunted by the worrying electoral score (18%) for Jean-Marie Le Pen, leader of the far-right National Front, in the presidential poll of 2002, the government thinks it must make changes, and be seen to be doing so, if it is to persuade voters that mainstream political parties do not simply sit smugly on a gravy train between elections. It also has the political weight to push through reform, if the will exists: the president and the government are both from the centre-right, and the government has a hefty majority in parliament. “Opposition to change”, Mr Raffarin told Le Figaro last week, “is a dead end for France.”

Already, Mr Raffarin has on his list a string of structural reforms, and has achieved one of the trickiest of them, pension reform. As part of what he calls “Agenda 2006”, with a wry nod to Chancellor Gerhard Schröder's “Agenda 2010” for Germany, the French prime minister promises to revamp job training, restructure bankruptcy law, reform the health-insurance system to curb ever-rising costs, and reorganise the school system. This latter pair of reforms will be preceded by a “national debate”, to try to tease out and neutralise opposition ahead of time.

Moreover, Mr Raffarin is not afraid of taking unpopular measures, as his refusal to budge on pension reform despite paralysing strikes earlier this summer shows. He has even braved French indignation by floating the idea of robbing workers of one of their sacred public holidays each year, in order to help finance health care for the elderly, the chief victims of the recent heatwave. As it happens, the renegotiation of work contracts to allow this to happen could also open the way to making the 35-hour working week more flexible.

Yet Mr Raffarin is on a treacherous path. For one thing, he badly needs an economic revival to help plug the deficit; even the government is forecasting growth of only 1.7% next year. For another, he must show that he can continue to face down street protests once his next round of reforms, particularly over health and education, gets under way.

Already, his popularity is on the slide. The prime minister may be busy stamping his authority on the government, in small ways as well as big: he has just, for instance, forbidden two junior ministers from going ahead with their planned appearance on a political reality-television show to save them from ridicule. Steering the French back to economic reality, though, will be quite a different matter.

Feature on Jean-Pierre Raffarin, Prime Minister of France.

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