Mandate won, Sarkozy set to reform

A high-stakes experiment to dramatically reform France now begins in earnest – despite a surprising last-minute shift to the left by French voters in parliamentary elections Sunday. President Nicolas Sarkozy, whose labor- and tax-reform plans are designed to alter the social fabric of socialist France, won decisive victories in three of four elections this spring – giving him a mandate to begin his "politics of change," experts agree.

But while the ruling party eked out a majority Sunday in the French parliament, it was not the overwhelming victory, the "blue tsunami," that pundits and pollsters confidently predicted even while the voting took place. Mr. Sarkozy's Union for a Popular Movement (UMP) was cut by 45 seats to 314 in the 577 National Assembly, while the Socialists won 186 seats, a gain of 37 seats.

Still, the UMP's victory Sunday marked the first time any party has won reelection in France since 1978. With the parliament's makeup settled, the voluble new French president will open the legislative summer session on June 26 with an ambitious reform plan that is likely to define his tenure: He will try to institute growth policies to attack unemployment that has run at or near 10 percent for a quarter of a century – while at the same time betting that growth will support the social welfare system that has defined the "good life" in France.

"Sarkozy's presidency will be judged on reducing unemployment, a problem that many politicians and many people have simply given up on ever solving," says Nicolas Jabko, a research fellow at Sciences Po in Paris. "If growth can reduce employment nationally, it can also have an effect in the banlieue [largely immigrant suburbs where riots broke out in 2005] where jobless rates are 20 percent. That may satisfy some residents there – make them feel they aren't forgotten. That's also why the stakes are so high in this reform."

Controversial plan; diverse cabinet

It is a controversial plan that, paradoxically, will require a lot of political agreement to pull off, experts say, in a country hidebound in terms of unions and bureaucracy.

It involves a "single employment contract" that will make it easier for French companies to hire and fire, a loosening of the 35-hour cap on the French workweek, a 5 percent hike in the "value added tax" similar to one implemented in Germany, and a recently announced reform of the rigid university system, designed to make colleges more autonomous – and greater engines of innovation and research and development.

Since defeating Socialist Ségolène Royal with a clear majority six weeks ago, Sarkozy, who calls himself a man of the political right, has sought to bring a variety of centrists and leftists into his government. He gave the post of foreign minister to a well-known leftist, Bernard Kouchner, and named Rachida Dati as justice minister, making her the first female of north African origin to sit in a top cabinet position. In a further sign of diversification, the number of female deputies rose to 107 from 71.

Sarkozy's leadership in Europe

Sarkozy, the son of a Hungarian immigrant, is also cutting a prominent figure for himself in European affairs.

He is lobbying for outgoing British Prime Minister Tony Blair to take the European Union (EU) presidency position. He has entered the discussion on the future of Kosovo independence, suggesting a compromise between the indefinite time frame advocated by Vladimir Putin, and the immediate independence sought by many EU countries.

As the first baby-boomer president of France, he brought a youthful vigor to the recent G-8 summit in Germany, a contrast with his predecessor Jacques Chirac, who retired after more than 40 years in May.

In fact, Sarkozy's unfettered juggernaut and confidence in recent weeks may partly explain the unexpected vote Sunday. Only a week before, all but one of Sarkozy's 110 UMP deputies had won seats in first round voting. Yet in an unguarded moment, a French minister last week stated the ruling government would shortly raise the value-added tax (VAT), widely seen to help France's small wealth class and add taxes for the majority.

"The VAT was a gift to the Socialists that allowed the French to pause," says Pierre Haski, cofounder of the news website Rue 89, launched in May. "The overwhelming majority, the appearance of a clan taking over the [Elysée] Palace, which controls all media, the parliament, the Supreme Court – and then a parliamentary election that was nearly unanimous, may have scared people. One side getting everything may not be healthy, is how French may be thinking."

The banner headline in Le Figaro in Paris after Sunday's vote was, " 'Yes, but,' say the French." Probably the severest blow to Sarkozy's plans came with the seat lost by former foreign minister Alain Juppé, whom Sarkozy had tapped as environment minister, and whose seniority made him No. 2 behind Prime Minister Fillon.

Socialist Party leader François Hollande described Sunday's vote as a "counterweight for democracy." He was also, however, put in the position of answering questions about the announcement Monday by Ms. Royal, his longtime companion and mother of his four children, that the two were splitting up.