His back to the wall, Sarkozy tries to stem social protests (Feature)

By Siegfried Mortkowitz Feb 17, 2009, 10:50 GMT

Paris - Just six weeks after giving up the presidency of the European Union, French President Nicolas Sarkozy must already be longing for those heady days when everything he touched seemed golden and even his enemies admired his energy and determination.

During his six-month EU presidency, he profited from a global power vacuum created by the weakness of outgoing US President George W Bush to occupy the global centre stage and distract his detractors with his fancy footwork.

In addition, in the second half of 2008 the economic crisis still seemed like a primarily political issue that could be addressed by photo opportunities and high-profile gestures.

No more. Reports of redundancies and factory closings are almost daily in France, where unemployment is estimated to exceed 9 per cent this year.

As a result, in less than two months, Sarkozy has seen his popularity plunge to unprecedented lows, as many French voters remembered what it was they disliked about him before he became EU president.

According to polls, about seven out of 10 French adults have no confidence in Sarkozy's ability to address the economic crisis. Many resent what they regard as his multi-billion-euro gifts to banks and large companies and are demanding that more be done for smaller firms and low-wage earners.

France's powerful and traditionally inflexible trade unions are using the deteriorating economy and the president's loss of favour to regain some lost stature and influence and to force a halt to his planned economic reforms, which they feel will weaken them.

On January 29, up to 2.5 million people - according to union figures - took part in mass demonstrations throughout the country that were linked to a general strike.

Union leaders have called for another 'day of action' for March 19, with more strikes and protests, to increase pressure on Sarkozy and to keep the social pot boiling.

Sarkozy is to meet with trade union leaders and representatives of company heads on Wednesday to draw up a series of measures to aid the young, the poor and the unemployed.

The meeting is crucial for his government; but after the generous aid packages he offered to the banks and the auto industry, he has little room to maneuver.

By a cruel coincidence, the European Union's executive body is expected on Wednesday to warn France and at least five other member states that they are going too deeply into debt as they struggle against the economic crisis.

According to European Commission figures, France ran a budget deficit of 3.2 per cent of GDP in 2008, and is tipped to reach 5.4 per cent this year.

Under EU rules, national governments are allowed to run a budget deficit of up to 3 per cent of gross national product (GDP). States which violate the rules too flagrantly can ultimately face a fine.

Budget Minister Eric Woerth on Monday 'officially' asked trade unions 'to understand (French) limits.'

But there's little chance of that happening. The head of the moderate CFDT trade union, Francois Chereque, has demanded that the government establish a 'social investment fund' of 6 billion euros to aid the young and unemployed.

Another union leader, the CGT's Bernard Thibault, wants a monthly wage rise of 300 euros for low wage-earners, among other demands, while Jean-Claude Mailly, of the FO union, is asking for an increase in the minimum wage.

If those three men leave Wednesday's meeting disappointed, things could get very hot indeed for Sarkozy well ahead of the summer.