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France's Tough Love

I'm in Paris, once more, for the second round of the French elections. The biting wind at our camera position is in stark contrast to the temperate warmth two weeks ago. The flirting with a new direction is over. France has her new President and Mr. Sarkozy appears to mean business.

Neither our guest host from Goldman Sachs, Nicolas Sobzack, nor Eric Chaney, chief economist for Europe at Morgan Stanley, felt inclined to retouch their GDP forecasts for France. Not yet anyhow. It will take time to persuade business at home and abroad that things are changing.

Sarkozy now rests for 10 days before the handover of power. He should use this time wisely, he will need to be strong for the coming fight. He must use his mandate quickly in the first 100 days to roll back the worst restrictions of the 35-hour working week. A follow through on promises to cut taxes on individuals would be welcomed sooner. The violence overnight in the suburbs, and the unions declaration they will oppose reforms, should only serve to harden Sarkozy's resolve.

French governments don't have the best record on facing down the mob. It will be a real test of his mettle. But if unemployment is to fall below 8% -- unheard of in the last 25 years -- and growth is to climb back above the OECD average ,then tough love is what France needs.

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