Table of Contents
The issue of political leadership in France has drawn a great deal of media and public attention since Nicolas Sarkozy was elected President on 6 May 2007—not least during the French Presidency of the European Union during the second half of 2008. This period saw Sarkozy take the reins of European leadership and acquire the moniker ‘Super-Sarko’. Sarkozy’s confident and fast-paced leadership not only drove the broad political agenda of the European Union during those six months, it faced the challenge of the heightened severity of the global financial crisis, which initially surfaced in August 2007. Moreover, the catchphrase ‘the European Union brings force’[1] rang very true for Sarkozy, whose message was heard more widely when he spoke on behalf of the European Union than when speaking for France alone (Missiroli 2009). The EU platform thus played a significant role in the framing of the global financial crisis in France, especially from Sarkozy’s perspective.
On the domestic front, the crisis manifested itself in France most notably from September 2008, triggered by the collapse of the investment firm Lehman Brothers in the United States, which sent shockwaves around the globe. In France, Fortis stock collapsed on 26 September as confidence in its solvency fell and, four days later, the French, Belgian and Luxembourg governments committed €6.4 billion towards the rescue of the bank Dexia. In the 12 months before these events, the sub-prime crisis in the United States had already damaged the international financial sector. In this environment, France had been taking more precautionary measures such as ‘the law for economic modernisation’,[2] which was aimed primarily at simplifying French small and medium businesses (SMEs).[3] The crisis, however, put such initiatives on hold as more immediate measures were taken to ensure the continued financing of the economy. At the close of 2008, Sarkozy announced a stimulus plan totalling €26.4 billion, to be spent on public investment projects across many sectors within the next year.
In the following analysis of the French elite’s rhetoric on the financial crisis, the focus remains on three key actors: the President Nicolas Sarkozy, the Minister for the Economy, Industry and Employment Christine Lagarde,and the Governor of the Banque de France Christian Noyer. All three actors held these offices throughout the period of analysis—April 2008 to March 2009—with Sarkozy and Lagarde taking their posts from the May 2007 election and Noyer being appointed the governor in November 2003. The period of analysis is situated in the early to mid-term of the French electoral cycle, with the next elections due in 2012. The quinquennat (five-year term) is relevant to this case study as the longer-term crisis management of the incumbent government will likely be a critical consideration in the 2012 election.
Sarkozy entered his presidency with high popularity ratings, reaching 65 per cent in the first month (CNN 2007), indicating confidence in his leadership during ‘normal times’. This phase-two period is, however, indicative of his leadership capabilities in a time of crisis. The first of President Sarkozy’s speeches analysed in this chapter, from 25 September 2008, was referred to by a journalist for Le Figaro as ‘a speech which incontestably marks the start of the second phase of the five year term’[4] (Jeudy 2008). Sarkozy’s leadership is a clear focus of this analysis, which aims to address the beginning of phase two and how it has impacted on public and media opinions.
Box 7.1 France’s financial crisis trajectory, April 2008 – March 2009
28 April 2008: Minister for the Economy, Industry and Employment Christine Lagarde, holds a press conference to present a plan for the law of economic modernisation.
13 May: While travelling to Vienna, President Sarkozy reassures artisans and small shopkeepers that the law for economic modernisation will simplify the process of owning your own business. On the broader economic situation, rising prices are not a ‘fatality’, according to Sarkozy.
15 May: Lagarde congratulates the remarkable resistance of the French economy in the first quarter of 2008, especially the vigour of investments, which are up to 1.8 per cent from 1.2 per cent in the fourth quarter of 2007. The French produit intérieur brut (PIB, or gross domestic product [GDP]) progresses to 0.6 per cent in the first quarter of 2008, according to the National Institute of Statistical and Economic Studies (l’Insee), which also reviews a rise of 0.2 points on the growth of 2007, to 2.1 per cent.
27 May: A freeze is put on property sales.[5] According to recent figures from the Ministry for Development, sales dropped to 27.9 per cent in one year, between January and March.
29 May: Natixis, the French corporate and investment bank whose primary shareholders are Banque Populaire and Caisse d’Épargne, announces the suppression, in the next 18 months, of 1100 jobs, of which 850 are in France.
2 June: Presentation of the economic modernisation bill to the National Assembly by Finance Minister Lagarde.
11–12 September: EuroFin Conference in Nice, organised under the French EU Presidency and chaired by Lagarde.
26 September: Financial giant Fortis’s stock collapses. Fortis is refloated on 29 September by Belgium, the Netherlands and Luxembourg (the Benelux states). BNP Paribas takes control of Fortis in Belgium and Luxembourg for €14.5 billion.
30 September: The governments of Belgium, France and Luxembourg underwrite the rescue of the top-tier retail bank Dexia by subscribing to an increase in capital of €6.4 billion to keep it afloat.
10 October: The French Government promises €320 billion in state-guaranteed lending to banks and €40 billion to recapitalise any bank in difficulty.
12 October: At the initiative of President Sarkozy, Paris adopts the European anti-crisis plan based on the protection of savings, financing the economy and avoiding financial institutions’ bankruptcy.
18 October: Sarkozy and José Manuel Barroso, President of the European Commission, meet with US President, George W. Bush, to discuss the redesign of the world’s financial structure.
23 October: In a speech at Argonay, Sarkozy announces a meeting of the G20 as well as a new strategic investment fund involving €26 billion of loans, in order to assure the financing of the French PME.
7 November: EU summit is held, at which a common set of principles for reform of the International Monetary Fund (IMF) is agreed on.
20 November: Between 163,000 and 220,000 French teachers and tertiary and high school students protest against the loss of jobs and education reforms.
4 December: Sarkozy announces a stimulus plan to boost the French economy with €26.4 billion (1.3 per cent of GDP) to be spent on public sector investments and loans for France’s automotive industry.
6 December: A Le Monde opinion poll suggests that 71 per cent of respondents do not believe the Socialist Party has a ‘vision’ for France. The Socialist Party was struggling to mount an effective response to the crisis.
10 December: After the announcement of a fall in private consumption, a rise in unemployment and a commercial record deficit, Insee reveals a dive of 2.7 per cent in overall industrial production in October.
20 January 2009: Prime Minister, Francois Fillon, announces the government’s intention to provide €5–6 billion to aid struggling car manufacturers.
9 February: German Chancellor, Angela Merkel, and Sarkozy propose a meeting of the 27 EU member states. Sarkozy announces that two French automobile manufacturers, Renault and PSA Peugeot-Citroen, will receive €6 billion in state loans, on the condition that they do not close factories in France.
10 February: Fillon unveils a stimulus package involving 1000 projects across France; 75 per cent of the allotted €26 billion must be spent by the end of 2009.
24 March: Sarkozy delivers an address at Saint-Quentin, defending his economic policy and promising to go even further.