Jospin's Troubled Waters

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The French call it la rentree — the return to serious business after the sacrosanct August vacation. But Prime Minister Lionel Jospin must be wishing he could head back to the beach after a tumultuous first week. It included the resignation of one of his closest cabinet allies, the blockading of French ports by irate fishermen protesting oil price hikes, a sharp downturn in his own poll ratings and an uptick in unemployment to 9.7% after months of steady decline.

The fishermen's protest hit with all the force and volatility of an Atlantic squall. Their blockade halted shipping and ferry traffic at most major French ports, from the English Channel to the Mediterranean. Protesters also blocked access to oil terminals and the passenger car entrance to the Channel Tunnel, leaving thousands of travelers stranded. And, in case anyone didn't know they were upset, they dumped tons of pungent sardines in front of government offices in several coastal towns. The fishermen were demanding relief from oil price increases that have raised the cost of diesel fuel — which is not taxed for commercial fishermen — by 160% since January 1999.

On Thursday, a week after the protests began, fishermen began lifting the barricades after meeting Agriculture and Fisheries Minister Jean Glavany and winning the promise of an aid package to compensate them for the rise in fuel costs. But then farmers and taxi drivers began launching blockades and go-slow operations that snarled traffic around Paris and several other cities. They want steep cuts in the taxes that account for up to 80% of the cost of petrol. But they got little relief in the sweeping tax reforms announced late last week by Finance Minister Laurent Fabius.

A longtime critic of France's heavy tax burden — 45.6% of gdp, the largest of any major industrial country — Fabius outlined cuts totaling about $16.3 billion over the next three years. Some $6 billion will come from personal income taxes, while companies will save $2.8 billion thanks to the suppression of a 10% surcharge on corporate taxes, bringing the rate down to a still hefty 33.3%. Low-end wage earners will be exempt from social security charges, and road tax for cars will be scrapped. The plan calls for a 30% cut in domestic heating-oil taxes, but relief for petrol and diesel oil will only apply to future hikes in crude prices.

Clearly influenced by the recent five-year, $23-billion tax cuts in Germany, the Fabius plan is an effort to maintain French growth and competitiveness. The government also hopes it will produce votes: there are local elections next year and parliamentary and presidential ones in 2002.

For the moment, though, Jospin was licking his political wounds after the resignation last week of Interior Minister Jean-Pierre Chevènement. A close friend and ally, Chevènement could not go along with Jospin's proposal to grant a measure of legislative authority to locally elected Corsican officials in the hope of ending a quarter-century of separatist violence on the French-held Mediterranean island. The Interior Minister sharply questioned the proposal as a threat to French sovereignty. A former Marxist, an outspoken anti-American and a staunch defender of the centralized French state, Chevènement publicly warned Jospin that his plan to allow a Corsican assembly to "adapt" French legislation to local conditions starting in 2004 could weaken the unity of the French Republic and encourage other regional movements to demand similar privileges.

The two men agreed to put their disagreement aside during the August vacation. But Chevènement returned to the charge two weeks ago, stating in a high-profile interview that he still rejected the plan and would refuse, as Interior Minister, to defend it before Parliament. Early last week, after a tête-à-tête breakfast, Jospin announced Chevènement's resignation with "regret" and named Parliamentary Relations Minister Daniel Vaillant, a loyal but colorless Socialist apparatchik, to replace him.

Chevènement, 61, had long headed the party's left wing and played a key role in shaping François Mitterrand's winning strategy in the 1981 presidential election. But he earned a reputation as a headstrong maverick after resigning a cabinet post in 1983, over economic policy clashes, and again in 1991, when he quit as Defense Minister because he opposed French participation in the U.S.-led campaign to oust Iraqi troops from Kuwait. Two years later, Chevènement bolted from the Socialist Party to start his own Citizens' Movement. Rescued from political oblivion when Jospin named him Interior Minister after the left's 1997 election victory, Chevènement played a vital role in balancing the awkward Socialist-led coalition, with its junior partners, the Greens and the Communists.

Though Chevènement said his party would continue to support the government, analysts saw his departure as a political setback for Jospin. In the past year, the ruling coalition has lost two Socialist stalwarts: Finance Minister Dominique Strauss-Kahn resigned in the face of an investigation into alleged corruption, and Education Minister Claude Allègre fell victim to teacher strikes. Labor Minister Martine Aubry is resigning next month to campaign for mayor in Lille. Shorn of most of its political heavyweights, Jospin's so-called plural left government will be resting on a narrower, weaker base just as the Prime Minister gears up to run against Gaullist President Jacques Chirac in 2002.

Jospin could not have been heartened last week when two leading opinion polls showed his approval rating had dropped by 4% and 5% respectively over the past month. The main causes for his sagging popularity: high oil prices, high taxes and doubts over the Corsica plan. About the only good news for the Prime Minister last week was a survey indicating 88% support for a yes vote in the Sept. 24 referendum on reducing the presidential term from seven to five years. Jospin has long championed the measure, and Chirac belatedly jumped on the bandwagon last July. Both men will surely claim credit for their expected victory. But it says something about the public view of politicians when the most popular reform they can propose is one to limit their own terms.