It's the politics, stupid

The economic forecast for France is reported to be better than expected. The economy is predicted to grow by 2.3 per cent in the second quarter, instead of the originally mentioned 1.7 percent. Of course, predictions in west European countries have, in the past, turned out to be incorrect and had to be scaled down, but for the moment Nicolas Sarkozy, the Finance Minister is riding high: France is doing better than the other eurozone countries, where average growth is predicted to be 0.6 per cent.

The French expansion appears to be export led. Consumer spending is not growing particularly noticeably, but exports, fuelled by demands from the United States and China, are set to expand by 3.6 per cent this year after contracting by 2.7 per cent last year.

Alas, this is not all good news, even on the economic front. There is no sign that unemployment will go down. According to Laure Maillard, an economist at CDC Ixis bank, this will not be a jobless recovery but “a recovery with less job creation than usual”. Other economists cautiously agree both with the figures and the probable lack of impact on the job market.

It was enough for Sarkozy to strut in front of the National Assembly, while making a few cautious noises. Even with the predicted growth France will not be able to reduce its deficit to below 3 per cent “unless we act”.

Unfortunately, if President Chirac has his way, it will not be Nicolas Sarkozy who will do the acting. The President, worried about the recent catastrophic election results, the fact that his close cohort Alain Juppé is still appealing a guilty verdict for diversion of funds to the party and by M Sarkozy’s continuing popularity as well as his open intention to run for the Presidency in 2007, has offered to do a deal.

Sarkozy’s first step in his campaign for the French Presidency is to bid for the Presidency of the Union for a Popular Movement (UMP), the right-wing, supposedly Gaullist party both he and Chirac belong to.

Chirac has agreed to support his bid on condition that Sarkozy leaves the government. Presumably M Chirac considers that a mere party official who is not a minister will soon vanish from the public view. This may be a miscalculation, given Sarkozy’s amazing ability to reappear when he is least expected.

Sarkozy is reported to be unimpressed by the offer, seeing no reason why he should not continue to be a minister while leading the party. After all, Chirac himself served as prime minister and party leader from 1986 -1988, as did Juppé in 1995 -1997.

It is worth remembering that Nicolas Sarkozy's father was Hungarian. President Chirac may not have heard of those famous revolving doors.