- The Washington Times - Friday, September 6, 2002

PARIS Economic difficulties are looming before France's 4-month-old conservative government, casting doubts on its ability to fulfill all its election campaign promises.

The Cabinet of Prime Minister Jean-Pierre Raffarin, which returned from the traditional summer break last week, is facing a situation described by some pundits as "difficult and even explosive."

"Mission impossible," headlined the conservative daily Le Figaro in discussing the agenda stemming largely from the electoral platform of President Jacques Chirac, whose re-election last May was followed by a conservative parliamentary victory in the June elections.

Both the president and his prime minister are still popular, with the latest poll listing Mr. Raffarin's approval rate as 59 percent and Mr. Chirac's at 53 percent.

But during its first full post-vacation workweek, the Cabinet faced the tricky challenge of having to meet campaign promises in hard times. "Chirac's promises are numerous and costly," one newspaper said.

The employers organization know as MEDEF is demanding that the 35-hour workweek adopted by the previous socialist government be scrapped. The labor unions want a total commitment from the government to keep the measure, as well as all facets of the welfare state, and the Communist General Labor Confederation (CGT) has threatened "general mobilization" without specifying its nature.

For the time being, the government has opted for a formula of flexibility, making the 35-hour week "adjustable" according to the size of various enterprises.

The 2003 budget, to be presented by Sept. 25, also poses a major problem. During his campaign, Mr. Chirac promised a 5 percent income-tax cut, which he said was "a question of our survival." However, the nation's economic growth-rate estimate since has been lowered to about 2 percent from 3 percent.

Analysts say cutting taxes now would make it virtually impossible for France to keep its public debt under 3 percent of the gross domestic product a key requirement of the European Union.

Official estimate of inflation stands at 2 percent, but private statistical groups say it is much higher in the range of 5 percent to 10 percent.

The transition to the euro has resulted in "adjustment upward" of many prices, ranging to 15 percent. Apparently it cost 10 percent more this years to equip a child for school.

Ernest-Antoine Selliers, president of the MEDEF, has called for "vigilance" in the face of pessimistic forecasts and conflicting inflation figures.

Despite such vicissitudes and the acknowledgment by some Cabinet members that "the economic situation is not exactly at its best," Mr. Raffarin has maintained his calm. At the first post-vacation Cabinet meeting late last month, he said the situation "is relatively easily controllable."

His spokesman, Jean-Francois Cope, insisted that "nothing serious" is threatening the "rentree" or return from the holidays usually considered to be a barometer of France's political and economic mood.

Mr. Raffarin's aides say the prime minister firmly believes in his government's ability to "reform France" according to Mr. Chirac's blueprint.

His optimism resulted in a new phrase in the French political vocabulary "serene like Raffarin." In french "serain" serene rhymes with the prime minister's name.

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