Left gains as Europeans show distaste for austerity

French vote spurs cabinet reshuffle, while German leader's party trails in opinion polls.

French President Jacques Chirac ordered a government reshuffle Tuesday, casting the future of social and economic reforms into doubt in the wake of a severe electoral setback.

The dilemma he faces as he seeks to pursue painful reforms after a crushing defeat for his party in last Sunday's regional elections is a familiar one:

• In neighboring Germany, Chancellor Gerhardt Schröder's Social Democratic party has dropped to its lowest standing in opinion polls since World War II - 20 percent - after reforms last year that cut unemployment benefits and hiked health costs.

• In Italy, millions stopped work last week in a one-day general strike called by trade unions to protest government plans to raise the retirement age to 60 from 57.

But Europeans seem confused about what they want. Even as French voters punished their leaders for imposing economic reforms, for example, those who wanted the changes to continue outnumbered those who wanted them to stop.

As governments across Europe cut pensions, trim social ser- vices, and ease labor laws to boost their creaking economies, the confusion evident in France is making their reformist task increasingly difficult.

"Most people know that we have to introduce some reforms, but as soon as they are personally affected they change their minds," says Dietmar Herz, a politics professor at Erfurt University in Germany. "They accept the need for structural reform in the abstract, but they reject it in concrete terms."

"The head says yes, but the heart says please, no, never," concurs Jeff Gedmin, head of the Aspen Institute, a US think tank in Berlin.

The French elections handed the opposition coalition of Socialists, Communists, and Greens their most convincing victory in nearly 25 years; they won more than 50 percent of the vote, against 37 percent for the government, to take 25 of the 26 regional governments at stake.

The result was seen as a stark warning to Prime Minister Jean-Pierre Raffarin, who embarked two years ago on a policy of belt tightening, including a controversial law making people work three years longer for their pensions. President Chirac kept Raffarin in his job Tuesday, but a major cabinet reshuffle was expected to be announced Wednesday, and the future of planned social security cuts was uncertain.

Reformist governments in trouble blame their woes on poor political salesmanship, acknowledging that they have failed to explain properly how painful social costs today fit into a broader vision of greater well-being tomorrow. French Finance Minister François Mer - expected to lose his job this week - was widely criticized for complaining testily last week that the French "are frightened ... and stick their heads in the sand."

One after another, French government spokesmen appeared on television Sunday night to blame the election results on a lack of "pedagogy." After stepping down as leader of his party earlier this month, Mr. Schröder said he hoped his successor would "make it more clear that we need these reform measures to guarantee prosperity in the future."

"If you want to carry out inevitable changes, which means an austerity policy, you have to be Churchillian about it, and call on everyone to put their shoulders to the wheel," says Jean-Luc Parodi, a French political analyst.

But they have to be seen as fair, he adds. "If measures are seen as equitable, there is less of a problem. But when the government cuts taxes, which favors richer people, and then eliminates a public holiday to help balance the budget, that is the last straw."

In Germany, the introduction of a flat 10 euros ($12) fee to see a doctor has drawn wide criticism as being a bigger burden on poor people than on their wealthier neighbors.

Still, most Europeans appear to accept that their country's aging populations and stagnating economies mean their governments cannot go on being as generous as they have been.

Sunday's exit poll found that 45 percent of voters wanted the French government to pursue reforms, against 42 percent who were opposed. In Germany, a poll earlier this month by the independent Elections Research Group came up with even more striking results.

Though 58 percent of respondents said they thought the German government's recent reforms were wrong, 93 percent said they did not think they would be sufficient to solve the problems facing their country.

Part of the gap between heads and hearts is human nature, says Stefanie Wahl, an analyst at the Institute for Social and Economic Research in Bonn.

"We know we should do all sorts of things, like lose weight or jog more, but we don't necessarily do them," she points out. "We feel so comfortable, life is so nice, so we stick to it.

"It is very difficult to step back from social benefits, and we have never faced the need before," she adds.

Some of the opposition to reform is rooted in Europeans' tradition of relying on the state to organize social solidarity, setting aside a good chunk of the national wealth to weave reliable safety nets for the old, the sick, and the unemployed.

That means that the new more competitive rules of the globalized economy, which call for the sort of economic streamlining that European governments are now attempting, are often resented as an alien imposition on their culture.

Reforms making it easier to hire and fire workers, encouraging citizens to seek private health insurance, or reducing state pensions undermine traditional European values such as stability, predictability, and security. They are more often seen as regressive, retreats from guarantees of social justice, than as progressive reforms to promote individual freedom and responsibility.

"People in Europe think of economic reform as a technocratic measure that is painful but which will create economic efficiency," says Dr. Gedmin. "The moral dimension in terms of empowering people to take responsibility for their lives," familiar in the US, "is absent from the debate. You are either for economic efficiency or for social justice, and most people are for social justice."

Mr. Raffarin is likely to play up his concern for social justice in choosing new ministers Wednesday, which could well blunt his drive for reform. In Germany, the opposition Christian Democrats would probably find it hard to push through their own economic reform program - should they win the 2006 elections - in the face of public hostility, analysts say. In recent regional election campaigns they have been successful by being deliberately vague about their policies.

In the end, predicts Professor Herz, "reforms will come with time. As people become accustomed to them they will accept the hardships and governments will recover," he says.

"Reform is inevitable, it is going to happen," agrees Dr. Parodi. "But it can only pass in conditions of relative consensus, and that is easier to say than to achieve."

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