Is Sarkozy Fini?

The French president is having his worst month in a long time -- and the best he can do is raise taxes on soda.


He’s an incumbent president and a telegenic leader who has become strikingly vulnerable ahead of the 2012 presidential election. His achievements might have seemed impressive in another era, but have been undone by grinding hardships: a limping economy, stubborn unemployment, fierce political opposition, panic over the debt, a disappointed electoral base. Yes — France’s Nicolas Sarkozy is in trouble.

Barack Obama’s reelection challenge, formidable as it is, has little on Sarko’s. Beyond a slew of Obama-esque political crises, Sarkozy faces a rising tide of corruption allegations against those around him that no amount of "Free Libya" photo-ops is likely to stop. Nearly two-thirds of the French hold a negative opinion of him — more than the fraction who disapprove of former International Monetary Fund director and noted philanderer Dominique Strauss-Kahn. As the Socialist opposition prepares to select its presidential candidate in mid-October, its two most popular figures, François Hollande and Martine Aubry, hold double-digit leads over Sarkozy in a theoretical runoff.

These days, Sarkozy’s spinmeisters are working overtime to make him respected, given their failure to make him likeable. They point to his foresight in budgetary restraint and note his success in increasing France’s retirement age from 60 to 62, while also eliminating civil servant and teaching positions. But this is exactly Sarkozy’s problem: Acting as Mr. Austerity (which he has to, in any case, to avoid losing France’s AAA credit rating) certainly doesn’t offer an easy path to reelection. Add to that a flurry of scandals, and it’s clear that Sarkozy could be headed for the ranks of France’s unemployed.

Like Obama, Sarkozy arrived with broad support; but he began to plummet just months into his presidency. The French, including many of his supporters on the right, quickly became troubled by Sarkozy’s flashy nouveau riche style. It didn’t help that he couldn’t seem to keep his private life private — whether it was his visible suffering during a rare presidential divorce or his courtship and marriage to a former supermodel, Carla Bruni — in a country where people expect greater discretion from their leaders. To be fair, Sarkozy has, more than four years into his presidency, largely reined in such tendencies. But the impression stuck; and voters are, in any case, now more concerned with his unpopular policies, the dire economic situation, and ethics issues that, while rarely proven, won’t go away.

The Bettencourt scandal, which came to a head in 2010, has done the most damage to Sarko’s promise to be a more ethical leader. One of Sarkozy’s first major moves as president was to push through what amounted to a 10 percent tax cut for France’s wealthiest people. For octogenarian billionaire Liliane Bettencourt, the largest stakeholder in the L’Oréal cosmetics empire and the country’s richest woman, this would have spared her tens of millions of euros annually — if she paid all the taxes she was supposed to. But a legal battle between Bettencourt and her daughter over whether the old lady is mentally capable enough to control her own money (after she gave a dandy artist "friend" more than a billion dollars worth of gifts) brought forward a plethora of revelations.

Bettencourt, it turns out, enjoyed an array of questionable tax shelters, not to mention that she owned an undeclared multimillion-euro vacation island in the Seychelles (reportedly purchased from the Shah of Iran’s family). Details of Bettencourt’s questionable interactions with key figures in Sarkozy’s government also emerged. It came out that the wife of Éric Woerth, minister of budget before leading the Labor Ministry, worked for a company that helped oversee Bettencourt’s finances during the tax-evasion period. (These revelations came out as Woerth was pushing a reform that required the French to work two additional years.)

It gets worse. Some of Bettencourt’s employees also alleged that conservative politicians who visited her in the run-up to various elections left with envelopes stuffed with large and illegal cash donations, sometimes 100,000 to 200,000 euros’ worth. In unofficial testimony cited in a pair of just-published books, Bettencourt’s former accountant even asserted that the billionaire intended to make an illegal donation of 150,000 euros, in cash, to Sarkozy’s 2007 presidential campaign. According to one version, the bagman for part of that cash was Woerth, who was simultaneously the treasurer for Sarkozy’s ruling party and the government minister who oversaw tax collection. Woerth vociferously rejected such accusations, as did Sarkozy. But in the eyes of many French people, it confirmed an early instinct that there was a problem in Sarkozy’s relationship to wealth and the people who have it.

In addition to the Bettencourt scandal, which continues to generate plenty of sparks more than a year after it evolved into an "affaire d’État," polls suggest that Sarkozy has failed his post-vacation rentrée politique, a natural moment for launching a crucial comeback just seven months before the French choose their next president. It’s not that he hasn’t had some triumphs — it’s just that the meaningful ones have all been beyond France’s (and Europe’s) borders. During his brief victory-lap visit to post-Qaddafi Tripoli on Sept. 15, he likely lapped up the "Merci, Sarkozy!" chants and graffiti messages.

And when he spoke before the U.N. Security Council in Turtle Bay on Sept. 21, his negotiating lawyer’s soul was on full display. With the Palestinian push for U.N. recognition facing an all-but-certain U.S. veto, the French president went public with an intermediate step — that the United Nations grant observer status to Palestinian authorities.

In better times, such moves might engender the appreciation of French voters. They tend to like courageous and crafty solutions that advance lofty ideals of French universalism and allow the country to punch above its weight abroad. Back home, however, Sarkozy is failing to connect.

The latest sign of his electoral fragility came in senatorial elections on Sept. 25, when the Socialist opposition seized control of the French Senate for the first time in more than a half-century. Sarkozy’s advocates note that it wasn’t a direct election; a sort of Electoral College chooses the French Senate. So, they argue, the vote does not foreshadow an electoral catastrophe for the French right next year. But the election may highlight something more grievous: a multiyear leftward trend in local elections, which signals even more troubling ground-level weakness for Monsieur le Président.

Worse, the senatorial results also happen to be perfectly in line with popular sentiment toward the president. Sarkozy’s meager approval ratings — generally just one voter in three supports him — have hardly budged in 18 months, their steadiness in stark contrast with the turbulent mountains and valleys etched on European stock market graphs.

The French electorate is notoriously mercurial and pessimistic, but this moment is especially bad. Sarkozy’s predecessor, Jacques Chirac, endured lengthy periods of disapproval, but the French are far more troubled now than they were at any time during his 12-year presidency. Nearly nine voters in 10 are worried about the state of the country, and more than three in four are concerned about their own economic situation. Two in three fear for their own job or that of someone close to them. Such sentiments are significantly direr than they were at the peak of the 2008 financial crisis or prior to the country’s overwhelming take-this-European-Constitution-and-shove-it vote in 2005.

On top of the bad election results, just last week two Sarkozy intimates — including the best man at Sarkozy’s 2008 wedding — were charged with misuse of public funds in what the French media call the "Karachi Affair." A French court is looking into whether kickbacks from a sale of military submarines to Pakistan in the 1990s funded the 1995 failed presidential campaign of Édouard Balladur, prime minister at the time. Sarkozy had been budget minister from 1993 to 1995 under Balladur and was also his campaign manager, though the Élysée Palace denies that Sarkozy had any authority over the financing of that campaign.

The Karachi Affair isn’t just about cash-stuffed suitcases. A 2002 terrorist attack in Pakistan’s largest city killed at least 14 employees of a naval defense company, most of whom were French, on their way to a Pakistani dockyard to work on one of the military submarines in question. Some have brought up the possibility that Pakistani authorities orchestrated the killing as a long-distance retaliation against the French for cutting off kickbacks to officials there.

Amid this swirl of accusations, investigations, and prosecutions, the government unveiled its proposed 2012 budget on Sept. 28. It includes 3 billion euros in tax increases on everything from sugary soda drinks to individuals who earn more than a half-million euros annually (thus nullifying part of the president’s signature tax cut). It also includes a wide array of spending cuts that, more than three years after the start of the global economic crisis, are sure to inflict more pain on the Average Jean on the street.

The goal is to bring France’s budget deficit in line with EU limits by 2013. If Sarkozy succeeds in keeping his promises to Brussels — and given shrinking economic growth forecasts, that’s a big if — he could garner kudos from the European Commission and stock markets. But they aren’t going to be voting in the election next spring.

Given the circumstances, what sort of arguments can the French right put forward to eke out a victory? For now, scare tactics and, apparently, even redbaiting. Nadine Morano, a junior minister to the minister of labor, employment, and health, said in a Sept. 29 TV interview that France’s credit rating would surely be "downgraded within a week" if the Socialists won the presidency. The Socialist candidates, she asserted, have a political program that is worthy of the "Soviet Union," ripe with state-driven economic proposals that are "resolutely turned toward the past." Unfortunately, she doesn’t seem to realize that most French people see little these days that is more appealing.

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