Analysis: France's Economic Battle Royale

Council on Foreign Relations

Updated: November 14, 2007
Author: Lee Hudson Teslik

For Nicolas Sarkozy, the honeymoon is over. The new French president gained popular support for an ambitious program of economic reforms during his campaign, but to turn his platform into policy he must now face down French unions, angry at the prospect of losing worker benefits they had come to see as an entitlement. Following one-day October strikes that shut down France’s railroads, the country’s unions launched sweeping November 13 public sector walkouts (France24). Their aim remains to derail Sarkozy’s momentum as he works to launch a program of broad economic change.

The strikes come at a tense moment for the French economy. Global market jitters have weakened a strong run of European growth, and Sarkozy recently complained that a declining dollar is undermining French exports (Bloomberg). Still, a majority of the French people say they support Sarkozy, but the question remains whether a new wave of strikes will trip up his rush for reform, or come as a mere blip in a broader, liberalizing time.

Sarkozy’s plans are simple enough. He wants France to work more, and he wants to revamp the country’s business laws to make Paris a friendlier venue for finance. Laying out his economic goals this summer, Sarkozy said France needs to play “the game of globalization” (NYT) and said he was willing to upset France’s welfare and labor protection systems if it helped French businesses compete in a world marketplace. Speaking recently at CFR, France’s Finance Minister Christine Lagarde expounded on Sarkozy’s plans. Lagarde said she and Sarkozy are working at “reforming the country as fast and as much as we can, while not upsetting too much the social balance that has been crippling France.”

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