Foreign Correspondence

[thepennyking]

France's Raffarin May Be Replaced After Election Loss (Update1)
March 29 (Bloomberg) -- French President Jacques Chirac may name a new government, including replacing Prime Minister Jean- Pierre Raffarin, after the Socialist-led opposition trounced the ruling coalition in regional elections.

The Socialists took control of 20 of mainland France's 22 regional councils in the final round of voting yesterday, a greater blow to Raffarin's two-year-old government than polls predicted. Surveys published a week ago, after the first round, forecast the Socialists would win in 14 regions.

Raffarin, 55, had been tipped by political analysts to stay as prime minister with some ministers losing their jobs before the next cabinet meeting on Wednesday. The scale of the defeat, at the hands of voters angered by rising unemployment and changes to the state pensions and health-care systems, puts his future in doubt.

``The message is extremely clear-cut: Raffarin should resign,'' said Stefan Collignon, who teaches international politics at the London School of Economics. ``The message is far too clear for the president to ignore it.''

The result is a setback for Chirac, 71, who was elected president in 2002 with 82 percent of the vote in a run-off against Jean-Marie Le Pen, the leader of the anti-immigration National Front. Le Pen unexpectedly eliminated Socialist Prime Minister Lionel Jospin in the first round of that vote.

The regional elections, coming three years before the next presidential and parliamentary elections in 2007, are the only mid- term electoral test during Chirac's mandate.

Sarkozy Is Favorite

Fifty-four percent of the French want Chirac to appoint a new prime minister, a survey of 803 voters carried out by polling company CSA after the election results showed. Were Raffarin to quit, Interior Minister Nicolas Sarkozy, 49, would be the most popular choice as his successor, with 29 percent supporting him, according to the poll. CSA gave no margin of error.

Should Raffarin stay to push through a series of unpopular measures such as cuts in health-care spending, then several ministers are expected to be replaced, headed by Health Minister Jean-Francois Mattei, 61, whose department was blamed for 15,000 deaths, mostly of the elderly, during a heat wave last August.

Finance Minister Francis Mer and Education Minister Luc Ferry are others, said Pierre Giacometti, head of Ipsos polling company.

Support for Raffarin has fallen in the last year because of rising unemployment and an overhaul of the state pension system. The plan forces employees to work longer for full retirement rights. Doctors have also warned that cuts to the health service will mean declining services.

Health Spending

Previous attempts to rein in health spending failed. The government expects the health system to post a record deficit of 10.9 billion euros ($13.2 billion) this year. Medical spending rose 6.9 percent last year. The government, which has already raised hospitalization fees and trimmed some drug reimbursements, needs to find yet more ways to curb spending.

January's 9.6 percent unemployment rate was close to a three- year high of 9.7 percent reached at the end of last year. Unemployment was at 9 percent when Chirac was re-elected. France's economy expanded at 0.2 percent in 2003, its slowest growth in a decade.

Raffarin is aiming to trim a widening budget deficit as the shortfall last year widened to 63.4 billion euros or 4.1 percent of gross domestic product. Shoring up health-care finances is key to the government's deficit reduction efforts after exceeding the European Union's 3 percent limit for countries sharing the euro for the past two years.

Voting Figures

Last Sunday's first-round ballot, which eliminated minority candidates, saw 40 percent of voters back Socialist-led groups, compared with 34 percent for Raffarin's coalition. Yesterday, the Socialists took almost 50 percent of the votes to less than 38 percent for the government, the interior minister said.

The National Front picked up less than 14 percent of the nationwide vote, down more than 3 percentage points from the 2002 presidential election.

Yesterday's vote ``wasn't about personalities, but policies,'' said former Prime Minister Alain Juppe, who also suffered a defeat in 1997 for his measures to cut the public deficit and permit France to qualify to join the euro. ``Withdrawing reforms would mean condemning our country to inactivity and regression,'' Juppe said.

``Reforms must continue because they are necessary,'' Raffarin said in a nationwide address on television. ``It won't be without difficulty.''



To contact the reporter on this story:
Julian Nundy in Paris [e-mail]

To contact the editor of this story:
Paul Tighe in Sydney at [e-mail]
Last Updated: March 29, 2004 02:19 EST