French election pivots around euro

Chirac is trying to skate over a sea of domestic troubles by playing the Europe card
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The Independent Online
Paris - In the British election, the euro has been the wicked fairy. It was excluded from the ball, but insisted on turning up anyway. In the snap French parliamentary election, announced last night by Jacques Chirac, the European single currency will be, so the President hopes, the principal and honoured guest.

As ever, Britain and France are separated by more than 16 miles of water.

Mr Chirac may, however, be as disappointed as John Major with the shape and tone of the campaign, which will end in two rounds of voting on 25 May and 1 June. The President is breaking recent historical precedent by dissolving parliament early, essentially for tactical reasons. Like President Mitterrand, when he called an unnecessary referendum on the Maastricht Treaty in 1992, Mr Chirac hopes the popularity of Europe will mend his own unpopularity. He risks finding, as Mitterrand found, that his domestic difficulties will test French commitment to Europe, almost to destruction.

Mr Chirac gave three reasons for calling the election eight months early (backing the hunch of his Prime Minister, Alain Juppe, against his own better judgement). He said the poll would allow France to reject the divisive and destructive message of the far-right National Front; it would give new impetus to his government's state-shrinking reform programme; and, most of all, it would provide a clear, new mandate for France to enter the tough final negotiations on the single currency next spring.

The euro retains broad, but maybe shallow, support in France. By making it the centre-piece of the campaign, Mr Chirac and Mr Juppe hope to skim over a sea of other economic, fiscal and legal troubles (not least of which is likely legal action this summer against two senior cabinet ministers). The truth is that no new constitutional or political backing for the abolition of the franc was needed after the narrow vote in favour in 1992. The real arguments for bringing the poll forward were tactical: opposition parties were not ready and the economic and electoral climate was likely to turn against the centre-right majority in parliament as the year wore on.

What is true is that France has not yet debated the idea of a single European currency, even if it has approved it. A thorough debate of Emu in France would be, democratically speaking, a healthy thing but it is not necessarily what Mr Chirac and Mr Juppe are seeking. If it happens, it may not go the way they would hope.

The social and economic reform programme, undertaken unevenly since Mr Chirac was elected President in 1995, remains fundamentally unpopular. There is a grudging acceptance that the state must be shrunk; a desire for lower taxes and lighter social burdens on business. But there is also a broad anxiety that the privatisation of state industries, the reform of health policy, or pensions policy, will take France on an alien Anglo- Saxon course towards economic liberalism.

The great miracle, and mystery, is that no live political connection has been made between domestic reforms and spending cuts and the need to prepare the economy for Emu. The Front and the Communist Party, as well as dissident voices within the centre-right and centre-left, will use the election campaign to make precisely that connection if they can.

It is President Chirac and Mr Juppe's gamble - one among several - that such a debate would do most damage to the main opposition party, Lionel Jospin's Socialists.

For weeks Mr Jospin has been floundering in search of a coherent, alternative policy which would support the euro but offer a gentler alternative to the Juppe reforms.

The snap election also catches the Socialists (as Mr Juppe gambled it would) halfway through the feminisation and rejuvenation of their front- line troops.

By party edict, one third of candidates must be women. Most are chosen but few have started working on their constituencies. Even before the President's formal announcement, Mr Jospin seemed to fall into the Emu trap.

He said he still supported the single currency but not at any price and not if it required further deep cuts in public spending. The centre- right sprang on this apparent gaffe: one minister said Mr Jospin had "completely lost his pedals".

But this issue could play against the government, as much as against Mr Jospin. A series of conflicting leaks in recent days has suggested France may be missing the Maastricht spending targets and further harsh, emergency cuts may be needed, especially in social security (ie mostly, in practice, in health spending). In any event, next year's budget will be a very tough one. In the meantime, the economic recovery is stuttering and unemployment refuses to retreat. Further leaks of disappointing budget figures could provide an explosive live wire between Emu and domestic spending cuts which the FN, Communists and others would happily exploit.

Mr Chirac is not, formally speaking, standing for election. His presidential mandate extends to 2002. But, in a sense, he has more riding on this campaign than Mr Juppe. If the Socialists, Communists and greens emerge with a majority - which the polls suggest is unlikely but possible - the President could face five years of "co-habitation" with a rag-tag centre- left parliament and government.

Looked at one way, Mr Chirac is betting his career on the tactical instinct of an unpopular Prime Minister, whose main attribute is that there is no coherent alternative. Put another way, Mr Chirac, the heir of de Gaulle, is gambling on the Euro-enthusiasm of a majority of the French people: their willingness to embrace the grand design and long-term promise of the euro, without examining too closely the short-term small print. The alternative - waiting until next March - must have looked very bleak indeed.