On January 1 French President Nicholas Sarkozy took the reins of the G8 and G20 economic groupings and the international limelight that comes with the post. Sarkozy who started his presidency in 2007 with astronomical popularity ratings has seen his personal popularity plummet to 24% --even farther south than his predecessor Jacques Chirac (who faces corruption charges in March). His wife, former model and singer Carla Bruni, who was once an asset has attained the dubious title as the celebrity that Frenchmen would most like to slap. Sarkozy hopes to exploit the opportunity of global economic leadership, when we are now less than 500 days away till France's presidential elections
The French president will meet with Barack Obama next week in Washington and at the end of the month he will take part in a summit of African countries and will pick up frequent flyer miles by the planeload. If he manages to cut a figure in international economics it may help his electoral prospects, France is still nostalgic for its former grandeur. Nothing is guaranteed; former British Prime Minister Gordon Brown similarly counted on the economic posts to lift his sagging fortunes but in vain.
In any event Sarkozy mixed his New Year's message with two seemingly contradictory messages. The first was that France would continue with a policy of cutting the budget deficit and there would not be a pre-election-year spending spree. From a 7.7% deficit in 2010 the deficit would be cut to 6% in 2011 and 24.6% by the end of 2012 projecting a 3% deficit in 2013 and 2% in 2014 comfortably within the limits specified in the euro stability agreement.
The French President acknowledged that the reforms were painful and realized that it would hit public services "I do not know of any public services where one doesn't tell me that he needs more personnel and more resources." However if France wanted to have an independent future and enjoy growth that will protect jobs these are the things that had to be done. Sarkozy warned that France would not like to find itself in the position of Greece and therefore "we will not do… What we have seen being done in certain European countries who find themselves today confronting insurmountable situations … When one doesn't make the efforts that one has to at the necessary moment the price to pay is much heavier." France simply could not go on accumulating budgetary deficits as it has had done in the last 30 years.
Sarkozy however softened his budgetary harsh medicine by dissociating himself from free-market approaches and promised that during this year's French presidency of the G8 and G 20 France would defend the idea of a "more regulated" and "less brutal" world. As a token of this approach he held out the possibility that France and Germany would be the first to harmonize their tax policies and thus prevent the migration of jobs. Both Sarkozy and the German Chancellor Angela Merkel last week issued ringing defenses of the euro. The French president warned that if the euro fell this would mean the reversal of 60 years of European progress and would mark the demise of Europe.
Sarkozy also promised a new global monetary system that would be less dependent on the dollar and even threatened to yoke the French minnow to the Chinese economic Leviathan to convince the Americans to agree to new financial arrangements. A multipolar world required multipolar economic arrangements as well.