France's Sarkozy Is No Maggie Thatcher:

As an American in Paris during the French presidential election last weekend, it was hard to understand what the big deal was.

``Huge turnout as voters set stark left-right duel,'' read a front-page headline in the International Herald Tribune following Sunday's first-round vote, which saw center-right candidate Nicolas Sarkozy and Socialist Segolene Royal emerge victorious. ``Voters endorse two visions of the future,'' read another.

Excusez-moi, but isn't that always the case?

The world is divided into left and right, with shades of gray in between and bursts of color on the outer fringes. French voters' choice -- between a conservative (seasonally adjusted for France, of course) former finance and interior minister and a female lawmaker, both of whom want to resuscitate France's economy -- is really no different than the one faced by Britons in the late 1970s and Americans in 1980.

The impact isn't likely to be as dramatic in France's case.

``Sarkozy is not like Reagan or Thatcher,'' said Christophe Maillard, secretary general of Liberte Cherie (Beloved Freedom), a classical liberal think tank and grassroots organization outside Paris. ``He's still in favor of big government. He's better than Chirac or Royal. That doesn't mean he's good.''

Sarkozy, or anyone else for that matter, won't be able to implement his program without first reforming France's powerful labor unions, Maillard says. The unions represent only 8 percent of French workers but have a disproportionate influence to their size.

Aux Barricades!

It was one year ago that French students and labor unions took to the streets, blocking access to many of France's universities.

The source of their angst? A new law that would have allowed companies to fire workers younger than 26 without cause, or severance within two years of hiring. The idea that the law would have improved the job prospects of college graduates -- if companies can't fire they won't hire -- seems to have lost something in translation. There's no point in worrying about job security when there are no jobs.

Both Sarkozy and Royal, who received 31.2 percent and 25.6 percent of the first-round vote, respectively, want to revitalize France's economy: Sarkozy, with free-market reforms, including tax cuts and deregulation of the labor market; Royal, with more state spending. She would raise the minimum wage, boost pensions and create more government-sponsored jobs.

We have a pretty good idea how Royal's initiatives will work out. What we don't know is whether Sarkozy will be able to implement his because of the unions.

Disproportionate Influence

How is it that such a small percentage of French workers can virtually shut down the country?

``Their power comes from the fact that the French mentality is very statist,'' said Veronique de Rugy, a French citizen who is a senior research fellow at the Mercatus Center, a free-market think tank affiliated with George Mason University in Arlington, Virginia. ``They are untrained to think there is a solution outside of government.''

The media tends to be one-sided, censoring itself so the government doesn't have to. Unless there's a shift in public sentiment, with people voicing their discontent, the unions will still call the shots, de Rugy said.

To many outside observers, the France of 2007 resembles the U.K. of the 1970s.

``People want money but they don't want working,'' said Laurent Tordgman, a Paris taxi driver who was shuttling me from office to hotel. ``People don't think to work.''

Disincentives

They don't think to work because there isn't much incentive. It's no coincidence that tax rates and unemployment are high while the number of hours the French spend at work is low.

France's unemployment rate is 8.8 percent, the highest among the 13 countries that share the euro. Some 2.3 million people are unemployed.

``If Royal wins, it will be the same politique de Mitterrand,'' Tordgman said, referring to Francois Mitterrand, another socialist and president of France from 1981 to 1995. ``If Royal wins -- many, many taxes, security bad, immigration bad.''

France's public sector eats up 54 percent of the economy, the second-highest among industrialized countries (behind Sweden). Tax revenues are 51 percent of gross domestic product. Real GDP growth -- 2.5 percent in 2006 -- has lagged behind almost all of France's neighbors for the last three years as its share of world exports has fallen.

The statistics are sending a clear signal that reform is needed, but until the French people hear it, change will come slowly.

No U-Turn

``There's a deep-rooted resistance to abandoning the French social model,'' with its cradle-to-grave protections, said Bernard Connolly, global strategist at Banque AIG in London.

Connolly said the unions' hold on the government is not unlike the relationship between the trade unions and Labour Party in 1970s Britain. Prime Minister Margaret Thatcher stood up to the coal miners in 1984, stockpiling supplies in advance to keep power flowing in the event of a likely strike. She won concessions from the union and proceeded to implement her program of privatization, freeing the economy from the union's grip.

Sarkozy, currently favored in the opinion polls, should use the time between now and May 6 to revisit Thatcher's memorable response when her economic reforms were challenged by her own Cabinet at the Conservative Party conference in 1980.

``Turn if you like,'' she said. ``The lady's not for turning.''

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