Is Sarkozy Fini?

The French president is having his worst month in a long time -- and the best he can do is raise taxes on soda.

He's an incumbent president and a telegenic leader who has become strikingly vulnerable ahead of the 2012 presidential election. His achievements might have seemed impressive in another era, but have been undone by grinding hardships: a limping economy, stubborn unemployment, fierce political opposition, panic over the debt, a disappointed electoral base. Yes -- France's Nicolas Sarkozy is in trouble.

Barack Obama's reelection challenge, formidable as it is, has little on Sarko's. Beyond a slew of Obama-esque political crises, Sarkozy faces a rising tide of corruption allegations against those around him that no amount of "Free Libya" photo-ops is likely to stop. Nearly two-thirds of the French hold a negative opinion of him -- more than the fraction who disapprove of former International Monetary Fund director and noted philanderer Dominique Strauss-Kahn. As the Socialist opposition prepares to select its presidential candidate in mid-October, its two most popular figures, François Hollande and Martine Aubry, hold double-digit leads over Sarkozy in a theoretical runoff.

These days, Sarkozy's spinmeisters are working overtime to make him respected, given their failure to make him likeable. They point to his foresight in budgetary restraint and note his success in increasing France's retirement age from 60 to 62, while also eliminating civil servant and teaching positions. But this is exactly Sarkozy's problem: Acting as Mr. Austerity (which he has to, in any case, to avoid losing France's AAA credit rating) certainly doesn't offer an easy path to reelection. Add to that a flurry of scandals, and it's clear that Sarkozy could be headed for the ranks of France's unemployed.

Like Obama, Sarkozy arrived with broad support; but he began to plummet just months into his presidency. The French, including many of his supporters on the right, quickly became troubled by Sarkozy's flashy nouveau riche style. It didn't help that he couldn't seem to keep his private life private -- whether it was his visible suffering during a rare presidential divorce or his courtship and marriage to a former supermodel, Carla Bruni -- in a country where people expect greater discretion from their leaders. To be fair, Sarkozy has, more than four years into his presidency, largely reined in such tendencies. But the impression stuck; and voters are, in any case, now more concerned with his unpopular policies, the dire economic situation, and ethics issues that, while rarely proven, won't go away.

The Bettencourt scandal, which came to a head in 2010, has done the most damage to Sarko's promise to be a more ethical leader. One of Sarkozy's first major moves as president was to push through what amounted to a 10 percent tax cut for France's wealthiest people. For octogenarian billionaire Liliane Bettencourt, the largest stakeholder in the L'Oréal cosmetics empire and the country's richest woman, this would have spared her tens of millions of euros annually -- if she paid all the taxes she was supposed to. But a legal battle between Bettencourt and her daughter over whether the old lady is mentally capable enough to control her own money (after she gave a dandy artist "friend" more than a billion dollars worth of gifts) brought forward a plethora of revelations.

Bettencourt, it turns out, enjoyed an array of questionable tax shelters, not to mention that she owned an undeclared multimillion-euro vacation island in the Seychelles (reportedly purchased from the Shah of Iran's family). Details of Bettencourt's questionable interactions with key figures in Sarkozy's government also emerged. It came out that the wife of Éric Woerth, minister of budget before leading the Labor Ministry, worked for a company that helped oversee Bettencourt's finances during the tax-evasion period. (These revelations came out as Woerth was pushing a reform that required the French to work two additional years.)

It gets worse. Some of Bettencourt's employees also alleged that conservative politicians who visited her in the run-up to various elections left with envelopes stuffed with large and illegal cash donations, sometimes 100,000 to 200,000 euros' worth. In unofficial testimony cited in a pair of just-published books, Bettencourt's former accountant even asserted that the billionaire intended to make an illegal donation of 150,000 euros, in cash, to Sarkozy's 2007 presidential campaign. According to one version, the bagman for part of that cash was Woerth, who was simultaneously the treasurer for Sarkozy's ruling party and the government minister who oversaw tax collection. Woerth vociferously rejected such accusations, as did Sarkozy. But in the eyes of many French people, it confirmed an early instinct that there was a problem in Sarkozy's relationship to wealth and the people who have it.

In addition to the Bettencourt scandal, which continues to generate plenty of sparks more than a year after it evolved into an "affaire d'État," polls suggest that Sarkozy has failed his post-vacation rentrée politique, a natural moment for launching a crucial comeback just seven months before the French choose their next president. It's not that he hasn't had some triumphs -- it's just that the meaningful ones have all been beyond France's (and Europe's) borders. During his brief victory-lap visit to post-Qaddafi Tripoli on Sept. 15, he likely lapped up the "Merci, Sarkozy!" chants and graffiti messages.

And when he spoke before the U.N. Security Council in Turtle Bay on Sept. 21, his negotiating lawyer's soul was on full display. With the Palestinian push for U.N. recognition facing an all-but-certain U.S. veto, the French president went public with an intermediate step -- that the United Nations grant observer status to Palestinian authorities.

In better times, such moves might engender the appreciation of French voters. They tend to like courageous and crafty solutions that advance lofty ideals of French universalism and allow the country to punch above its weight abroad. Back home, however, Sarkozy is failing to connect.

The latest sign of his electoral fragility came in senatorial elections on Sept. 25, when the Socialist opposition seized control of the French Senate for the first time in more than a half-century. Sarkozy's advocates note that it wasn't a direct election; a sort of Electoral College chooses the French Senate. So, they argue, the vote does not foreshadow an electoral catastrophe for the French right next year. But the election may highlight something more grievous: a multiyear leftward trend in local elections, which signals even more troubling ground-level weakness for Monsieur le Président.

Worse, the senatorial results also happen to be perfectly in line with popular sentiment toward the president. Sarkozy's meager approval ratings -- generally just one voter in three supports him -- have hardly budged in 18 months, their steadiness in stark contrast with the turbulent mountains and valleys etched on European stock market graphs.

The French electorate is notoriously mercurial and pessimistic, but this moment is especially bad. Sarkozy's predecessor, Jacques Chirac, endured lengthy periods of disapproval, but the French are far more troubled now than they were at any time during his 12-year presidency. Nearly nine voters in 10 are worried about the state of the country, and more than three in four are concerned about their own economic situation. Two in three fear for their own job or that of someone close to them. Such sentiments are significantly direr than they were at the peak of the 2008 financial crisis or prior to the country's overwhelming take-this-European-Constitution-and-shove-it vote in 2005.

On top of the bad election results, just last week two Sarkozy intimates -- including the best man at Sarkozy's 2008 wedding -- were charged with misuse of public funds in what the French media call the "Karachi Affair." A French court is looking into whether kickbacks from a sale of military submarines to Pakistan in the 1990s funded the 1995 failed presidential campaign of Édouard Balladur, prime minister at the time. Sarkozy had been budget minister from 1993 to 1995 under Balladur and was also his campaign manager, though the Élysée Palace denies that Sarkozy had any authority over the financing of that campaign.

The Karachi Affair isn't just about cash-stuffed suitcases. A 2002 terrorist attack in Pakistan's largest city killed at least 14 employees of a naval defense company, most of whom were French, on their way to a Pakistani dockyard to work on one of the military submarines in question. Some have brought up the possibility that Pakistani authorities orchestrated the killing as a long-distance retaliation against the French for cutting off kickbacks to officials there.

Amid this swirl of accusations, investigations, and prosecutions, the government unveiled its proposed 2012 budget on Sept. 28. It includes 3 billion euros in tax increases on everything from sugary soda drinks to individuals who earn more than a half-million euros annually (thus nullifying part of the president's signature tax cut). It also includes a wide array of spending cuts that, more than three years after the start of the global economic crisis, are sure to inflict more pain on the Average Jean on the street.

The goal is to bring France's budget deficit in line with EU limits by 2013. If Sarkozy succeeds in keeping his promises to Brussels -- and given shrinking economic growth forecasts, that's a big if -- he could garner kudos from the European Commission and stock markets. But they aren't going to be voting in the election next spring.

Given the circumstances, what sort of arguments can the French right put forward to eke out a victory? For now, scare tactics and, apparently, even redbaiting. Nadine Morano, a junior minister to the minister of labor, employment, and health, said in a Sept. 29 TV interview that France's credit rating would surely be "downgraded within a week" if the Socialists won the presidency. The Socialist candidates, she asserted, have a political program that is worthy of the "Soviet Union," ripe with state-driven economic proposals that are "resolutely turned toward the past." Unfortunately, she doesn't seem to realize that most French people see little these days that is more appealing.



'Maybe We Are Ruining the World'

An elegy for the Greece of my Uncle Thanassis, a Greece I only barely knew.

ATHENS - My Uncle Thanassis is 81 years old. Over the course of his long life, he has weathered every Greek identity crisis since World War II: the bitterness that divided and impoverished the country after its bloody 1946-1949 civil war between communists and conservatives. The painful postwar years that sent his friends to Australia and the United States for work. The 1967-1974 military junta that smothered free expression and movement. The rise in the 1980s of the populist socialism pushed by former premier Andreas Papandreou, a mercurial, Harvard-educated economist. The good-time 1990s, when even the souvlaki-shop owners in Athens seemed to be making enough money to buy new Alfa Romeos and island vacation homes. The Europeanization of the last decade, when espresso freddos replaced the traditional sweet, grainy coffees in cafes -- and when a white-haired man who wore three-piece suits and liked dancing to wailing clarinet music seemed hopelessly out of place.

Through it all, my uncle maintained that being Greek was a gift. "Greeks make people feel good," he used to say, his eyes twinkling. "We show people how to live in the moment, to appreciate the scent of lemons and jasmine in the summer, to dance instead of cry when the stress of life gets to be too much. Whatever is wrong with this country, we always have that."

Not anymore. When I recently stopped for an afternoon coffee at his little house in a crowded Athens neighborhood, his eyes were no longer twinkling. Like many Greeks, he is paying higher taxes and higher utility bills on a reduced pension. He is distressed to see that his once-homey neighborhood, where he has lived for 50 years, has become a run-down warren filled with empty shops and scarred by graffiti. By dusk, the main drag where he buys his feta cheese and Italian salami is now filled with forlorn Nigerian prostitutes as young as his teenage granddaughter. A few weeks ago, when he was walking home after a midday trip to the grocery store, he stopped to talk to a young Greek couple who claimed to be lost. When he got home, he realized they had picked his pockets clean of cash.

"Is this what it's come to?" he said, as downhearted as I'd ever seen him. "Stealing from each other in broad daylight and under the guise of the friendliness that has made us who we are?" He sipped his coffee and turned on the TV news, which was blaring yet another BBC report about how the Greek economy is ruining the world. "Maybe they're right," he sighed. "Maybe we are ruining the world."

Before the great debt crisis of 2010, the outside world knew Greeks as fun-loving, big-talking extroverts with unreliable schedules and great tans. In incarnations from Zorba the Greek to My Big Fat Greek Wedding, they lived in the long shadow of the ancient past but still managed to embrace the spontaneity of the present. The world loved the Greeks not only for Pericles, Hercules, and the Acropolis, but for the tavernas, the beaches, and the kindly grandmothers bearing syrupy walnut cake and homemade raki. Even the so-called kamakia, or "harpoons" -- the swarthy men with open shirts and soap-opera English known for sweet-talking young, blond tourists into bed -- have a special place in the hearts of many Northern European women.  

But today, no one loves the new, post-debt-crisis Greeks. As the narrative now goes, these Greeks are irresponsible, big-spending welfare babies who evade taxes and see the European Union as a giant ATM. These are the Greeks who are taking down the global economy and throwing petrol bombs at Parliament, not rice at weddings. The debt crisis sparked by Greece has revealed deep cracks in the cohesion of the European Union, which was already on shaky ground. Europeans have lost faith in the euro; some have proposed excising Greece like a cancerous tumor in a misguided effort to save themselves. A recent poll showed that half of Austrians think Greece should exit the eurozone, even though most analysts agree that such a move would actually hurt the other countries; Austrian Chancellor Werner Faymann said this spring that Austria's GDP would shrink by 5 percent if Greece left. Still, Ilias Diamantidis, a 33-year-old ophthalmologist in Augsburg, Germany, tells me his patients regularly lecture him about this irresponsible, profligate new behavior. Diamantidis, who's from the northern Greek city of Thessaloniki, says he never knows how to respond. "They are right to criticize the way we as a country have handled our finances," he says. "But that's not a complete picture of who we are."

His childhood friend Nicholas Ventouris, an economist trained in London, is not so generous. "Greeks have tolerated a corrupt political system for so long that this society has grown corrupt, too," he says. Ventouris says being Greek means feeling suffocated -- especially as a young, educated person with big dreams. He is especially put off by the natural anarchy in the culture that celebrates the mangas -- that crafty dude who circumvents the system -- and snickers at the suckers who are actually paying their taxes. Diamantidis says it's just survivalism. The way Greece currently runs, with its closed, clientelistic economy and nasty politicians, you have to be a rule-breaker to get good medical treatment, build a house, or get a job or even a driver's license. "It has long been the price to pay if you want to live in this beautiful country," he says. 

Prime Minister George Papandreou has said over and over again that Greece must change this culture if it wants to survive in a competitive future. The debt crisis has prompted the fast-tracking of reforms such as the privatization of state assets, a crackdown on rampant tax evasion, and the dismantling of a bloated public sector -- changes that should have been made years ago. "I promise you, we Greeks will soon fight our way back to growth and prosperity after this period of pain," he told German industry leaders in Berlin on Tuesday, Sept. 27. Papandreou's quiet determination has won him fans abroad. Born in St. Paul, Minnesota, and educated in the United States and Britain, the 59-year-old premier speaks Midwestern-inflected English and looks just at home in Berlin as he does in Athens. But that cosmopolitan quality has never played well at home. Many Greeks complain that he's not Greek enough, even though he hails from the country's most storied political dynasty (his father and grandfather were both premiers). At rallies, protesters hold up hand-painted posters of Papandreou swaddled in an American flag or as a UFO. Public anger at him and his government has grown with the new austerity measures, which include pension cuts and a controversial new property tax that Parliament passed Tuesday.  

Although I was born in Athens, I grew up in the Dakotas and Minnesota and I like Papandreou's deliberate personality. I have often criticized most Greeks as impulsive and unbearably fatalistic, but it's unfair and untrue to describe them as lazy and petulant and to solely blame them for an economic crisis that is far bigger than this tiny country of 11 million people. My parents left Greece in 1974, but my father especially took his identity as a Greek very seriously. He read the poetry of Cavafy and Seferis to his friends at the Elks Club in Williston, North Dakota, and often mesmerized them with stories about growing up in a remote village in the Peloponnese. He told them about the broad, balding mountains and the cool blue sea, the goats he tended and the olives he helped harvest, and the nearby ruins of Messene, the Doric city-state founded by Epaminondas, that centuries of sun had bleached pearly white. He sent me off to college with a book of poetry by Odysseas Elytis. There are a few Elytis lines I turn to again and again whenever I lose my bearings: "My sky is deep and changeless/All I love is incessantly reborn/All I love is always at its beginning." 

Greece has changed, and not changed, since my father and his older brother -- my Uncle Thanassis -- were born. It's no longer the impoverished country where many Greeks died of treatable illnesses, as my paternal grandparents did in the 1930s. It has transformed from a wild, agrarian land plowed by donkeys to a full-service, high-end mecca for sun-and-sea tourists. Half of the population now lives in Athens, the capital, a once-provincial city that is now a crushing, seething chaos of concrete apartment blocks and ancient ruins, Michelin-starred restaurants and screaming bouzouki clubs, suburban villas and inner-city ghettos. And the country now has about a million immigrants, many from Africa and South Asia, and the Greek-born, Greek-speaking children of those immigrants have sparked a separate identity crisis over what it means to "be Greek."

But Greece's sky is still, in many ways, deep and changeless. Greeks have clung to the distant past and have sometimes managed to live very viscerally in the present, but they have never really welcomed the future. Now the future is so grim, no one wants to think about it. Austerity reforms have allowed Greece to receive international bailout loans to prevent it from immediate default, but the measures are also strangling the economy. The recession is now in its third year, and unemployment is above 16 percent. There has been a rise in homelessness, crime, and personal bankruptcies. The number of recorded suicides has doubled since before the debt crisis, according to a report in the Wall Street Journal, which cited data from the Greek health ministry and the nonprofit Klimaka. "We can't even make ourselves happy anymore," says my Uncle Thanassis.

My father died in 1989, just shy of turning 53. He was a quiet, bookish man who always seemed out of place in the prairie of North Dakota, talking in his musical, Peloponnesian-accented English to the 7-foot gas station owners who chewed tobacco and responded with wide, flat vowels. He was at his most graceful swimming in the sea near his village. He took our family on a summer vacation there when I was 9, and I remember how happy he looked to be home, amid the salty breeze and hidden coves. My Uncle Thanassis was there, too. He and my dad laughed as they swam into the waves, and I followed, desperate to be part of that joy. My uncle still brings up that day whenever the gloomy news reports or depressed Athenians seem too much to bear. His eyes always moisten. It's what it means to him to be Greek, and as he watches his country tearing itself apart once again, for him that's all there is left.