The world economic crisis has changed Government policy in France perhaps even more than in other countries.

France has a tradition of politically disruptive mass protest arguably unequalled in the West. Anybody ruling the country at times of social and economic hardship must tread very carefully to avoid exciting this trait of the national character. What has been happening at the periphery of the country, mostly in the Caribbean, could be imitated in Paris.

President Sarkozy has an additional reasons to review his stance carefully. He won the 2007 elections by obtaining the support of a sizeable part of the popular electorate, and it is this electorate that he is at great risk of losing unless he adapts his policies and style to the new challenges created by the crisis. For the moment the opposition Socialist Party appears an unconvincing challenger, being still torn by divisions and being confronted by the converging challenge of the rumbustious New Anti-Capitalist Party and of François Bayrou’s independent Centrists. But it would be foolish for the President and the centre-right majority to be complacent, especially in the run-up to the European elections.

Majority and President have adapted not only by passing several support packages, from those approved in October to help banks, to the € 26 billion December economic stimulus, to the recent measures in favour of the vehicle manufacturers and finally to the € 2.6 billion directly targeted at boosting consumers purchasing power.

There have also been a number of changes and withdrawals on previously announced policies: - the postponement of the High School reform, the review of the planned University reform, a new emphasis on the use of publicly-subsidised jobs, and the watchful monitoring of banks’ lending policies, among others. Yet, President and majority have also been careful not to lose sight of priorities. The wide ranging reform policy which has been the hallmark of the Sarkozy Presidency from the start has been modulated and reviewed, but not abandoned. Reform plans for public health, local Government, Parliamentary procedures, and Sunday trading, among others, remain on the agenda. And, while the support packages, together with the weakness of activity, mean that the old public finance targets are no longer realistic, the policy of State spending control and of public employment reduction continues.

It is balancing act that has worked so far, but that can ultimately succeed only if the crisis is neither too protracted nor too intense.

© 2009 Europrospects Ltd.