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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (2216)	3/29/2004 1:31:26 PM
From: Hawkmoon	Respond to of 116555

Well, it would appear that France's economy is destined to continue dragging down the EU. I guess we can expect even more economic chaos on the continent. France's Chirac in Crisis Talks After Poll Defeat By Tom Heneghan PARIS (Reuters) - French President Jacques Chirac held crisis talks with his prime minister Monday, under pressure to dismiss him and shake up the conservative government after a crushing defeat in regional elections. A cabinet reshuffle is widely expected and the fate of cost-cutting reforms hangs in the balance after the left-wing opposition's landslide win Sunday. Chirac and Prime Minister Jean-Pierre Raffarin made no comment but Chirac's office said he was "working with the prime minister on decisions he will take over the next few days." Buoyed by deep public discontent with painful reforms that have provoked widespread protests, the Socialist Party and its allies won nearly all of France's 26 regions and beat all cabinet ministers running for regional council seats. The left won nearly 50 percent of votes to just short of 37 percent for the center-right, according to definitive interior ministry figures. A big mid-term protest vote had been expected, and it had little impact on France's stock market, but the size of the swing to the left was a shock for Chirac. "The French have fired a very big warning shot in our direction," government spokesman Jean-Francois Cope said. Chirac could yet ask Raffarin to stay on, shake up the cabinet below him and just tinker with reforms. There are three years until the 2007 presidential and parliamentary elections and the center-right holds a comfortable majority in parliament. But ignoring such a clear rebuff for reforms and the prime minister's lack of popularity would be a big risk. Francois Chereque, head of the large CFDT trade union, told weekly magazine Le Nouvel Observateur: "The government thought law and order would ease people's anxiety when unemployment is what's eating away at the country." As reshuffle speculation reached fever pitch, Raffarin had visits Monday from several politicians including a relatively little known pensions and welfare specialist Xavier Bertrand. RAFFARIN VOWS TO PRESS ON Chirac, whose center-right UMP party won 14 regions in 1998 against 11 for the left, has not commented on the outcome. The left swept 20 of the 22 regions in metropolitan France, with the right winning only in Alsace. In Corsica, the left was ahead but needed to agree a coalition before declaring victory. Left-wing leaders, swept from government in 2002, will use the success as a platform for the 2007 elections. Interior Minister Nicolas Sarkozy would be the most likely candidate to become prime minister, but his strained relations with Chirac and presidential ambitions could block his way. Finance Minister Francis Mer could be ousted but the foreign and defense ministers are likely to stay, commentators said. The eurozone's second largest economy is under pressure from Brussels to cut a soaring public deficit back below EU limits. Raffarin vowed Sunday to press on with reforms but said "policies must be more efficient and fair, and it is certain that some changes must be made." Economic analysts said the crushing defeat was likely to weaken the government's resolve to forge ahead with sensitive reforms such as cost-cutting in the healthcare system. "Regardless of who is prime minister, we believe it will be very difficult to implement structural reforms," said Stephane Deo, an economist at UBS Warburg bank. "For example, there is an important risk that the pending healthcare reform will be considerably watered down." Other analysts said the French government was unlikely to drop its opposition to a multi-billion euro merger between Swiss drugs group Novartis and domestic rival Aventis. Raffarin backs an all-French merger between Aventis and Sanofi-Synthelabo. story.news.yahoo.com