Anti-Deficit Sarkozy Pivots to Tackle Rising Unemployment
French President Nicolas Sarkozy is on course to be the first president - aside from George Pompidou (who died in office during his first term) - to be a one-term president.
Sarkozy resembles the juggler who simply has too many balls in the air at once. In the last couple of months,
Sarkozy has been scrambling to avoid a credit downgrade for France that would also impact on a projected European stability mechanism to combat the debt crisis. Austerity was the bitter medicine that the French government administered to win investor confidence, although the jury is still out on whether this effort was successful.
While the French government tried to plug the dike on the deficit front, unemployment was creeping up and is approaching 10%. This has made the government an easy target for the Socialists and other opposition parties. The Socialist party spokesperson Benoit Hamon lashed into Sarkozy on Saturday, describing him as one who pretends to protect the French "there has never been a President of the Republic who has mistreated them in order to protect a minority of them… there are now 1 million more unemployed registered at the unemployment bureau while €75 billion of financial gifts have been distributed to the very rich."
According to opinion polls, the French electorate is most interested in growth and jobs and this is what the Socialists have been hammering at.
Now the French president is pivoting to tackle unemployment, or at least to appear to be tackling it, as it is doubtful that he can show results before the first round of presidential elections in April.
He has scheduled a roundtable of labor unions, industrialists and government to tackle the unemployment problem, while announcing that the government has done what it could do on the deficit.
He is asking industry not to trim payrolls by having workers put in less hours and perhaps taking flexible days of work. The workers will not have to take deep pay cuts because the government will kick in the difference.
From where will a government that has just announced austerity measures going to take the money to subsidize the salaries? Sarkozy has the outlines of an answer.
As the government has helped the banks, the financial sector will have to kick in a transaction tax in expiation of the damage that it caused.
Another idea advanced by the French president is to tax imports. Obviously, this is easier said than done, particularly when a great deal of these competing imports come from the European Union and are therefore are exempt from tariffs and taxation. If the French president means the Chinese, then the World Trade Organization will have something to say about that policy, unless the French can prove dumping.
Sarkozy is running out of time. By pivoting, he appears to be justifying the policies of his rivals – the Socialists on growth and the National Front's Marie Le Pen in her attacks on globalization and EU membership.