Chirac gives poisoned chalice of economic reform to main rival

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The Independent Online

The president of France, Jacques Chirac, appointed a new government yesterday and gave the poisoned chalice of economic reform to his rival on the centre-right, Nicolas Sarkozy.

The president of France, Jacques Chirac, appointed a new government yesterday and gave the poisoned chalice of economic reform to his rival on the centre-right, Nicolas Sarkozy.

M. Sarkozy's former job at the interior ministry went to the Foreign Minister, Dominique de Villepin, a Chirac loyalist who shaped the President's diplomatic reaction against the US-led invasion of Iraq. The post of Foreign Minister job went to one of France's two European Commissioners, Michel Barnier, 53.

These decisions seemed to be driven by personality politics within the centre-right, rather than an attempt to regain the confidence of an electorate that turned to the left in regional elections at the weekend.

Eyebrows were raised ­ and not just on the left ­ at M. Chirac's decision to give the interior ministry to M. de Villepin, 50, a civil servant who has never stood for election. The post traditionally goes to a tough career politician.

M. de Villepin's appointment was interpreted by analysts as a move to groom him as a future prime minister ­ and as a bulwark against M. Sarkozy's rise. One government official said: "We are heading for a de Villepin government by the autumn." M. Sarkozy, 49, has been a popular Interior Minister and he seems likely to challenge M. Chirac for the presidency in 2007.

At the weekend French electors voted against reforms which might damage their benefits or public services.The national budget is ¤63bn (£42bn) in the red. Public sector unions are threatening to take to the streets against any cuts. So the task M. Chirac has given M. Sarkozy is big. The cabinet includes a new post, Minister for Social Cohesion, Jean-Louis Borloo, a Chirac loyalist. M. Chirac believes this is a win-win situation. If M. Sarkozy fails, a rival is disposed of. If he succeeds, his position is strengthened but so is that of M. Chirac.

The Prime Minister, Jean-Pierre Raffarin, offered his government's resignation on Monday after the centre-left captured 50 per cent of the vote and all but two of the 26 French regions in Sunday's poll (Corsica remains undecided).

M. Chirac accepted the government's resignation but immediately re-appointed M. Raffarin, ignoring the pleas of the majority of centre-right parliamentarians who wanted M. Sarkozy as prime minister. It is widely expected, however, that M. Raffarin will be fired if the centre-right suffers defeats in the European elections in June.

The government was picked by M. Chirac and M. Raffarin, but officials said that that many of the key choices had been shaped by Alain Juppé, a former prime minister and close Chirac ally who is in disgrace after being found guilty of corrupt party financing. M. Juppé is not believed to supportM. Sarkozy.

The centre-left newspaper Le Monde has said that, by retaining M. Raffarin and reshuffling the government for his personal, political convenience, M. Chirac was playing with fire. "It is always dangerous to play games with the electorate and play games with democracy," the newspaper said.

The main losers were the Finance Minister, Francis Mer, the Education Minister, Luc Ferry, the Health Minster, Jean-François Mattei and the Europe Minister, Noelle Lenoir.

The resignation of M. Barnier, the European commissioner for regional policy and the constitution, from the Commission was the third in five weeks from its top team of 20 officials. His move follows Pedro Solbes's decision to become Spain's Finance Minister and Anna Diamantopoulou's departure for Greek politics.

With the Commission due to finish its mandate at the end of October, officials are scrambling for political life-rafts. Mario Monti, the Italian commissioner for competition policy, is tipped to be the head of the International Monetary Fund, and the Commission's President, Romano Prodi, is a likely challenger to the Italian Premier, Silvio Berlusconi.