Success for Sarkozy Sets French Reform Path WiresTuesday, June 12, 2007

PARIS — French President Nicolas Sarkozy’s centre-right party crushed the Socialists in the first round of parliamentary elections but still faces major reform hurdles, despite the likely weakness of the opposition.

Sarkozy plans a wide series of changes to tax, labor and pension laws aimed at restoring momentum to the French economy and he won overwhelming endorsement when his UMP party routed the Socialists at the weekend.

Pollsters predict that the UMP will take more than 400 seats in the 577-seat National Assembly after the June 17 second round — the first time since 1978 that a ruling French party has secured re-election.

But UMP officials were deliberately cautious on Monday, taking nothing for granted, at least in public.

“Above all, no triumphalism,” said UMP deputy secretary general Patrick Devedjian, a close Sarkozy ally.

Their mood contrasted with the gloomy picture in the Socialist camp, which is struggling to keep a show of unity following a fresh setback on top of the failed presidential campaign of Segolene Royal.

“It is a difficult moment,” said party leader Francois Hollande, who is under fire from many Socialists.

But despite the expected magnitude of the final victory, Sarkozy is aware of the problems of reform in France, having experienced last year’s violent protests over a proposed youth jobs laws as interior minister.

He said he needed a broad majority to back his reform project but there were warnings that too feeble a parliamentary opposition risked driving protesters on to the street.

“When parliament is silent, the street does not take long to speak,” wrote an editorialist in business daily La Tribune.

The Socialists say the election will leave too much power in Sarkozy’s hands but his first act was to offer a conciliatory gesture to teachers by overturning a previous government initiative that made them work longer hours.

“For him, it’s a way of entering into negotiations on the teaching profession in a calm spirit,” said Patrick Gonthier, secretary general of the Unsa union, which represents teachers.
Prime Minister Francois Fillon said the election result confirmed voters’ desires to “set a course for France” and he pledged to continue with planned reforms.

Sarkozy’s government has already begun work on an ambitious program of changes to tax and labor laws designed to give new impetus to the euro zone’s second largest economy and the result was welcomed by financial markets.

“Overall, I take the outcome of the first round as favorable for the process of reforms and the potential growth of the French economy,” wrote Morgan Stanley economist Eric Chaney in a research note.

The government has already unveiled plans to cut tax on overtime and mortgage payments and give more independence to universities. He has also begun talks with unions aimed at guaranteeing a minimum service during public transport strikes.

Germany, Canada, and now France. Is the world becoming more conservative?

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