For Love or Country: Sarkozy Surrenders

When voters in France went to the polls last May they were in the mood for reform. After the first round of voting they removed all the "no change" candidates, leaving them with two choices in the run-off: a sharp swerve toward leftwards popularism under Ségolène Royal or the promise of radical reforms by the hyperactive Nicolas Sarkozy. Then in the run-off, Sarkozy trounced his rival and led his party to a sweeping victory in the parliamentary elections that followed.

Over the summer the hyperactive Sarko was seen everywhere: commissioning reports, jogging in Paris, setting up this, announcing that and so on. One of the announcements concerned legislation to ensure that French public employees retired at a sensible age -- instead of the current 50-55 retirement age range. The public sector unions in turn threatened strikes and protests for November, with the train drivers and various other public employees walking out for a little over a week. The French people, on the whole, were not impressed with the strikers. Indeed, the power of blogs and the internet showed itself. Presentations showing just how cushy life is as a TGV high-speed train driver were widely circulated. Eventually the strikes petered out, and Sarkozy's government gave the unions some fig-leaf concessions that fooled very few. This was Sarko as we expected, and while his popularity had slipped slightly, he was still right up there.

Then things got a little messy. Sarkozy, having become the first French president to divorce his wife, became the first to openly acknowledge an affair and to willingly be photographed with his new love. His lover, the tabloids told us, was Carla Bruni, the daughter of an Italian tire magnate. A model and former girlfriend of various pop stars and celebrities, she is also a relatively successful singer in her own right. The French media were in a frenzy, in part because no former French leader has let the media into his private life. (There are only rumors about a Japanese mistress for Chirac, and the world learned of President Mitterand's mistress only at his funeral). However, Sarkozy's popularity dipped gradually because people, on the whole, seemed to disapprove of both the publicity and the choice of lover. Taking advantage of the controversy, Ryanair ran a cheeky ad using a picture of the couple to promote its low airfares. Sarkozy and Bruni promised to sue and did so, despite Ryanair apologizing and withdrawing the ad.

The Bruni-Sarko affair overshadowed more important news. During the summer, Sarkozy had commissioned a panel, led by Jacques Attali, former adviser to the Socialist government in the 80s, to look at ways to boost France's economy and reduce its chronic youth unemployment. The commission handed in its report in January. The report contains some 300 recommendations, and many of them involve removing the various regulations and protections that hedge French businesses. Some of these regulations are probably beneficial -- there is a limit to how cheap a shop can sell bread, which certainly helps the local Boulangerie compete against the Hypermarchés -- but others are rather less so. It was these more harmful regulations that the Attali commission proposed scrapping.

One of these regulations was the one limiting the number of taxi drivers. Proposition 211 of the report recommended allowing many more taxis and more competition. The number of Paris taxis was proposed to grow from 16,000 to 50,000, which is about the same as the total number of taxis in France today. Unsurprisingly, this wasn't popular with the taxi drivers. Many of them have paid a lot to acquire one of the limited licenses (France is not alone in this transferable license idea; New York, for example, has a similar rule), and they saw themselves facing price competition and losing their investment in the license. The self-employed taxi drivers federation and the unions proposed public days of protest. The first, on January 30th, caused total chaos as the drivers blockaded airports and major highways. At Nice airport, it was reported that around a third of all passengers missed their flights. During this week's second protest, the main route into Spain was blocked, and "Operation Escargot" -- driving at a snail's pace along major highways -- caused even more havoc.

However, it seems there will not be a third day of protests. An aide to Prime Minister François Fillon met union representatives yesterday and told them that the government would not deregulate the taxis. This looks like a humiliating climb-down for Sarkozy's government, and it isn't the sort of thing that can be blamed on an underling. Sarkozy met other taxi leaders yesterday and said that he will reconsider this deregulation. It will be interesting to see how this develops because his spokesman also said he still intends to increase the number of taxis and modernize the regulations. But he wants to do this in cooperation with the drivers, who don't seem to want either of these things.

All in all, it looks like Sarkozy lost this battle some of the reforming zeal he started off with. The French are becoming increasingly disillusioned with Sarko. His popularity is now a mere 41%, perhaps because they think he is more interested in his new wife than his project to reform France. Still, at least he won his case against Ryanair, receiving a symbolic €1 damages. His bride, meanwhile, received a more substantial €60,000.