No Champagne for Sarkozy

This blog has raved about Nicholas Sarkozy’s efforts to reform France and improve its economy. But a year after coming to office, the International Harold Tribune’s Katrin Bennhold writes that the reforms he promised are mostly unrealized. According to Bennhold:

Most strikingly . . . Sarkozy never abolished the 35-hour week, a Socialist law that has become emblematic of the complex French rules on labor.

Rather than raising [the] limit, Sarkozy has created complex incentives to ignore it: a tax break on overtime, costing the state $9.3 billion, and a law forcing companies to pay workers who prefer cash to extra time off. . .

On factory floors and in boardrooms, the changes were welcomed, although not as the revolution that many had sought. "A bonus," said Laurence Parisot, president of the Medef, France's biggest employer federation. Clara Gaymard, managing director of General Electric in France, was less diplomatic: "This is not the real reform of the labor market we expect."

Bennhold concludes:

Ever since a clear defeat in local elections in March, Sarkozy's own center-right party has become less eager for unpopular measures. Slowing growth and rising inflation have [further] complicated Sarkozy's call for change.