Jacques Chirac's Galling Debut

Not since Charles de Gaulle left the scene in 1969 has a President of France strutted with such bravado on the world stage.

Since taking office two months ago, Jacques Chirac has grabbed the headlines in one issue after another. He has become the bte noire of environmentalists everywhere for his plan to test nuclear weapons in the South Pacific in September. He has charged pell-mell into the Bosnian fray, urging a Western invasion, accusing his allies of Munich-style appeasement--perhaps even ordering secret bombing runs on his own. His aggressive foreign policy positions may have helped provoke a fatal bombing in the Paris Metro, which French officials say may be linked to Algerian or Serbian terrorists. Between diplomatic jousts, Chirac also toured France's former colonies in Africa, embracing politicians and market women like a returning prophet of French imperial grandeur.

Just what is Jacques Chirac up to, anyway? His supporters applaud him for being one of the few European statesmen to show any backbone in world affairs. His critics hope this exuberant politician is simply savoring the first taste of power in a job he has wanted for 15 years. As France's first ruler in two decades from the Gaullist party, Chirac also "needs to measure himself against the General [de Gaulle]," says economist Christopher Potts of Cheuvreux De Virieu, a Paris brokerage. A danger, many observers feel, lies on the domestic front, where Chirac is shunning free-market strategies for a more Gaullist approach to managing the economy. And in Europe, his France-first policy may weaken the drive for closer union.

In the international arena, Chirac has shown no inclination to moderate his style. Among all his go-it-alone moves, the nuclear test plan is the most extreme (box). Pollsters say it has pushed his domestic approval rating down to 44% in late July, from 59% when he took office on May 15. In an era when nukes no longer count, says the chairman of one major French company, the tests are "strictly for image, not for defense." Defense Minister Charles Millon puts it a different way: Without a modern nuclear force, "France would no longer be a great power."

Some critics think Chirac must eventually soften his approach to geopolitics. If he doesn't cancel the underground nuclear tests outright, he may save face by exploding just one weapon instead of the planned eight. Chirac is "using up his political honeymoon at home with international bickering," says J. Paul Horne, economist at Smith Barney Inc. in Paris. France's new regime badly needs to grapple with 12% unemployment and a horde of long-neglected structural economic problems that threaten France's world clout far more than a pullback from nuclear testing ever would.

At home, Chirac's Prime Minister, Alain Juppe, has taken measures that smack of traditional intervention. Juppe has backed off from privatizing state-owned France Telecom, and he has made no move to loosen tight labor regulation, as many business leaders want. On the contrary, he has boosted the minimum wage, which most economists consider a barrier to job creation. He has also boosted the sales tax and corporate profit tax to fund job programs. Juppe promises to cut the $12 billion health-care and pension deficit in half next year. But many economists wonder why he hasn't attacked this year's shortfall, and they question his willingness to resist the worker protests he will undoubtedly face this fall.

Meanwhile, Alain Madelin, France's Economics Minister, is publicly urging a rapid turn to free-market policies. Chirac, as French presidents often do, is staying above this domestic fray, and the Prime Minister doesn't seem to be heeding Madelin. "Juppe is too obsessed with social fragility," complains economist Potts. Critics fear the new regime will fritter away its chances for deep reform. Says Pierre Mehaignerie, centrist head of the National Assembly's finance committee: "There's too much waiting with Juppe."

While Juppe pursues the traditional French economic stratagems, Chirac has been staking out a France-first position in Europe. Chirac has asserted French independence by rejecting a planned elimination of European border controls. And he's turning a deaf ear to howls around Europe over nuclear tests. Chirac was elected partly by voters who resent the German-dictated monetary policy that keeps French interest rates high. Since June, the French have started to lower rates.

PRIVATE AGENDAS. Since France has led the drive toward a united Europe, Chirac's nationalist outlook could help tilt his partners toward similar backsliding. Already, Italy's leaders are hunkering down over domestic problems that are more pressing than the cause of European union. In Spain, embattled Socialist Premier Felipe Gonzlez is likely to lose office to a conservative in coming months. His successor will weaken Spain's commitment to European monetary union in order to loosen state budgets and cut unemployment, predicts Giorgio Radaelli, an economist at Lehman Brothers in London.

Next year, the European Union will hold a major summit to map tighter political and economic unity. There's a chance that by then, France and its partners may be too deep in their private agendas to care much. An early start in 1997 for monetary union has already been scuttled, and the plans could be pushed onto a far back burner.

Critics think Chirac is bound to discover sooner or later that his old-style Gaullism won't work any more. But until then, the world will get a good show as Chirac tries to put some panache back into France's global role.

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