The Summer Of Sarkozy

Few politicians in France, or indeed the world, have had a rise and fall as dramatic as that of Nicolas Sarkozy. After soundly winning the presidency last year, he had an approval rating in September of 57 percent—a 30-year French record for a new president—and then a record low of 32 percent just eight months later. Through it all, there was this pervasive sense, particularly among English-language commentators, that Sarkozy's tenure was already on the verge of failure, that his reform agenda had crashed just as it had begun to take flight—that France, ultimately, was hopeless.

Sarkozy himself all but invited much of the criticism, upending the traditional style of the French presidency during a tumultuous first year, when he moved quickly and very publicly from one glamorous wife to another. But lost amid the spectacle was a simple fact: in one year he had initiated more economic reforms than predecessor Jacques Chirac did in his 12-year presidency. Last summer, he appointed a commission led by Jacques Attali to devise ways "to liberate growth," and in January it came back with 316 measures on things like immigration, harnessing the digital age and tightening public spending—and Sarkozy responded. "The fact that half the reforms we gave have been launched is very, very good," says Attali. "But the easiest has been done."

Now, with his poll numbers near their bottom, Sarkozy is actually speeding up the pace, and in some instances fighting against his own party and his core constituents. Many of the tougher reforms are now moving toward completion this summer in part of the biggest surge of economic reform Europe has seen since Margaret Thatcher transformed Britain in the 1980s. Last week, he launched an overhaul of the nation's military, rationalizing the bloated defense budget by cutting 54,000 posts and mothballing dozens of military bases. This month, Parliament passed a bill to make it easier to hire and fire contract workers and salaried employees.

In July Parliament is expected to pass Sarkozy's economic modernization bill (already approved by the lower house), which would boost entrepreneurship and lift old laws that protect small shops, spurring competition in the food and retail industries and lowering consumer prices. Next month, Parliament is also expected to pass a law that allows individual firms to negotiate overtime hours with their employees—a deathblow to the old 35-hour workweek. Still on tap for the next several months: a change that would allow bureaucrats to move from one government department to another, an increase in the number of job cuts in the public service (through attrition) and a set of changes to a health-care system laden with chronic deficits.

Sarkozy, to be sure, is no Thatcher, and France is no 1980s Britain, which was mired in strikes and stagflation. Last year, the French economy grew 2.1 percent. Unemployment, now at 7.2 percent, has fallen steadily since 2005 and union workers comprise a mere 8 percent of the workplace. Yet France consistently punches below its weight, trailing Germany and Britain economically, and though Sarkozy lacks Thatcher's single-minded focus on economic liberalism, he knows that by removing the rigidities in the labor market, cutting taxes and rewarding work, he can spark far greater growth and help keep France competitive in the global economy. It's about "putting into action what economists, on the left and right alike, have wanted for years," says Michel Didier, head of the economic institute COE-Rexecode.

With no key elections on the horizon, now is the time. And Sarkozy has recalibrated his image, reprivatizing his private life, dropping the habit of verbally provoking European peers, silencing loose cannon advisers and generally preparing France for a serious summer of reform. Economists like Didier are taking notice, suggesting growth nearing 3 percent is possible, which could one day move France ahead of Germany, the United States and Britain. Better still, says Didier, Sarkozy's method just might get it done without the kind of social upheaval France experienced in the past: "It's the big bang without the social explosion."