France’s reshuffled government: Sarkozy’s moment

President Jacques Chirac appoints a new clutch of ministers

IT HAS become an unceremonious tradition under the Fifth Republic for the French president to dump an unpopular prime minister. Georges Pompidou got rid of Jacques Chaban-Delmas; Franois Mitterrand booted out Pierre Mauroy, Michel Rocard and Edith Cresson. So it was to widespread surprise that Jacques Chirac reappointed Jean-Pierre Raffarin as prime minister this week, after the centre-right's worst electoral defeat for 16 years.

With just over 50% of the vote in the second round of regional elections, the Socialists, Greens and Communists won an absolute majority for the first time since 1988. Not since France's 22 regions were created in 1986, when the centre-right took 20, has the electoral map looked so uniform. This time, the left bagged all but Alsace and Corsica. No fewer than 19 members of Mr Raffarin's government were beaten, as was Valery Giscard d'Estaing, a former French president, in Auvergne. As one Socialist said, “it was the electoral equivalent of a general strike”.

In the face of such a defeat, Mr Chirac's decision to keep his prime minister, and make do with a reshuffle, is a gamble. After the result, 54% of French people said they wanted Mr Raffarin out. The centre-right retains its huge parliamentary majority. But the theatre of French opposition is more often the street than the National Assembly. The left and its union friends will use any provocation to protest. The Socialists feel combative, and their leader, Franois Hollande, has been buoyed by the victory of his partner, Segolene Royal, in Poitou-Charentes, Mr Raffarin's home region. A turbulent summer is promised.

Mr Raffarin insists that his new government will push ahead with reforms. But his new team feels made-over, not fresh. Many old faces remain. Two weak ministers, Luc Ferry at education and Jean-Franois Mattei at health, have been replaced by professional politicians: Franois Fillon, from social affairs, and Philippe Douste-Blazy, secretary-general of Mr Chirac's party. Michele Alliot-Marie stays at defence. The biggest surprise is Dominique de Villepin, who swaps the foreign for the interior ministry. This does not reflect a change in foreign policy, which will pass into the safe hands of Michel Barnier, now a European commissioner. It may stem from Mr Chirac's desire to make Mr de Villepin a more rounded political personality now that Alain Juppe, his protege, has been convicted of political corruption.

To present a more socially minded face, there is a new “ministry for work and social cohesion”, run by Jean-Louis Borloo, a former mayor of Valenciennes, whose easy grin lends him a usefully unpompous air. Elsewhere, the new team embodies political savvy and experience rather than freshness or reformism. With one exception: Nicolas Sarkozy's appointment to the finance ministry.

The hyper-energetic outgoing interior minister does not hide his presidential ambitions. He had hoped for the prime ministership, and may yet get it after June's elections to the European Parliament: another rout would surely spell the end for Mr Raffarin. The right's most popular politician, Mr Sarkozy has an uncanny ability to remain so despite his party's problems. Will finance finally floor him?

The finance ministry is not a natural place to gain political kudos. France is likely to breach the European Union's budget-deficit limit of 3% of GDP this year, for the third year running. With GDP growth forecast at just 1.7%, promises to bring the deficit below 3% in 2005 look thin. The biggest problem is the public health-insurance deficit, which may surge from €11 billion ($13.5 billion) this year to €29 billion by 2010. Any remedies - higher contributions, limits on reimbursements, higher prescription charges - will be unpopular. Indeed, Mr Chirac may be keeping Mr Raffarin on precisely as a fall-guy for a painful health reform this summer.

Mr Sarkozy, however, has argued that reforms are poorly implemented because they are poorly explained. His instincts are summed up in the title of his 2001 book, “Libre”, in which he argues for free choice over matters such as working hours, for lower taxes and for reward based on merit. “He is a fiscal conservative and an economic liberal by French standards,” comments Jacques Delpla, at Barclays Capital. He supports France's wealth tax and the idea of strategic national champions. But, unlike Mr Chirac, he grew up politically during the Thatcher and Reagan era. He is not bound by the notion that France's heavy public sector is unreformable. “In today's world, it would be a great risk for France to think that it can remain a prosperous nation without the French making the necessary effort,” he wrote in his book.

While Francis Mer, the outgoing finance minister and a former businessman, was frustrated by his lack of autonomy, Mr Sarkozy is a more even political match for the interventionist Mr Chirac. Collisions are inevitable. Would Mr Sarkozy have rescued the Alstom engineering giant from bankruptcy? Will he take on the bloated public service, which one official calls “the only really poisonous animal in France”? But then that may be why Mr Chirac, his rival, has given him the job.

French President Jacques Chirac has appointed a number of new ministers.

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