Thursday, October 7, 2010

DSK, the IMF, and Reform

When you read this interview with Dominique Strauss-Kahn in Le Monde, you may want to keep in mind this critique of IMF reform by Mark Copelovitch.

Showdown?

With the announcement that unions in various sectors will launch extensible strikes starting on Oct. 12, the stage is a set for a final test of strength between Sarkozy and labor. This has been expected since 2007 but had thus far been avoided by more or less adroit backpedaling, side-dealmaking, and sheer luck. But a line has been drawn in the sand, and one side or the other will have to give way. The Elysée is banking on the prospect that the strikes will prove unpopular and that there won't be a repeat of 1995, when strikers enlisted the sympathy rather than the resentment of the rest of the population. In these hard times, the financial burden on striking workers may also limit the length of walkouts. Sarko offered a few concessions today for women with 3 or more children and mothers of the handicapped, but the core reforms remain in place. Polls indicate that a majority does not want them, but other polls also suggest that the fundamental rationale for reform--France's very low workforce participation rate for people over 55--is broadly accepted. How much will the French be willing to sacrifice to get a different policy that will inevitably require other concessions? It's hard to say. This is where distance from the terrain becomes a real handicap. I don't have much of a feel for what people are grumbling around the water cooler. From various conversations a mixed picture emerges. Some feistiness mixed with some resignation. If I had to guess, I'd say that Sarko wins on reform but sinks further in the polls as a result of the strikes. And the ministerial shakeup also expected this month will contribute to a picture of lost control and lack of strategic vision.

Cashing In

Seems that the punishment of other ministers for abusing their frequent flier privileges did not deter Dominique Bussereau from commandeering a flight to visit his daughter in Lausanne on her birthday (touching, but the "child" is 30 years old). No matter. He's on his way out anyway.

Dr. Kouchner and Mr. Hyde

Apparently there are two Bernard Kouchners: the one who swears fealty and allegiance to Nicolas Sarkozy, and the one who gives interviews to Le Nouvel Observateur denouncing "l'inflexion sécuritaire" of Sarkozy's policy and complaining of repeated "humiliations" at the hands of Sarko's underlings. Peu importe. He'll soon be ex-foreign minister and free once again to assume the high moral ground, where his contradictions add relief to his character rather than paralyze his action.