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FEBRUARY 18, 2002

International Outlook
Edited by Rose Brady


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France: Why Chirac's Weakness Could Cripple Reform

Israel's Missile Ambitions

Blair's Labor Woes


France: Why Chirac's Weakness Could Cripple Reform

These are anxious days for French conservatives. For months, polls showed their standard-bearer, President Jacques Chirac, beating his likely opponent, Socialist Prime Minister Lionel Jospin, in this year's election. But with the first round of presidential voting set for Apr. 21, a new twist in a long-running corruption scandal has nearly erased that lead.

After seven years on the lam, Didier Schuller, a former official of Chirac's Rally for the Republic (RPR) party, turned himself in on Feb. 5. Schuller is ready to finger RPR officials, possibly including the President, in an investigation of alleged kickbacks while Chirac was Paris' mayor from 1977-95. Chirac's support has slipped 5 points since l'affaire Schuller began making headlines in mid-January.

That's only the beginning of the conservatives' woes. Under the French system, the party that controls Parliament effectively runs the government. The right, which lost its majority in 1997 to a Socialist-led coalition, hopes to regain control in parliamentary elections in June, a month after the final presidential vote. If Chirac loses, that task will be almost hopeless. Even if he wins, scandal-tarred Chirac isn't likely to give his troops much momentum for a parliamentary victory.

Compared to the Socialists, the conservatives look ill-prepared for battle. In the past five years, the right has splintered from four into six parties. Chirac, 69, has discouraged the emergence of new leadership and fresh ideas. Onetime heavyweights such as Alain Juppe, who was ousted as Prime Minister in 1997, and Philippe Seguin, who lost his race for mayor of Paris last year, are too weakened to play key roles in a new government. Most analysts think the right's candidate for Prime Minister will be a political unknown. "The big problem for the right is that there's no one behind Chirac," says Pascal Perrineau, an analyst at the Paris-based Center for the Study of French Political Life.

The Socialists have much greater bench strength--in part because Jospin, 64, has worked hard to accommodate differing factions in his coalition. Centrist Socialists such as Finance Minister Laurent Fabius and former Finance Minister Dominique Strauss-Kahn are appealing to moderate voters by calling for tax cuts and privatization of state-controlled companies. Strauss-Kahn, who left the government in 2000 to face a corruption investigation in which he was cleared, is a top contender for Prime Minister if the left stays in power.

For all his troubles, Chirac maintains a slender lead over his Socialist opponent. If, as expected, Chirac makes it to the second round of voting on May 5, most polls show him getting 51% to 52% of the vote against Jospin. Chirac is charismatic and a strong campaigner, while Jospin is colorless and aloof. And as leader of the current government, Jospin is vulnerable to attack over France's worsening economy. Chirac has also rebounded from earlier scandals, including the disclosure that he paid for luxury vacations with bags of cash from undisclosed sources. Other investigations have foundered because Chirac can't be prosecuted while in office.

So what would happen if France had another five years of cohabitation between a conservative President and a leftist Parliament? Not much, and that's the problem. Without the political oomph of the presidency, neither the left nor the right would find it easy to push through badly needed measures such as overhauling the retirement system. In this election, reform could be the real loser.

By Carol Matlack in Paris


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GLOBAL WRAPUP
Israel's Missile Ambitions

Israel is seeking U.S. approval to sell its Arrow ballistic missile system, Israeli military sources say. The U.S. paid for a third of the $2 billion development cost of the land-based system, which is designed to shoot down incoming missiles, and has the right to veto its sale to countries other than Israel. Israeli Defense Minister Benjamin Ben Eliezer recently raised the issue in talks with Defense Secretary Donald H. Rumsfeld.

Turkey, India, Britain, and South Korea have all expressed interest in buying the Arrow, which was developed by Israel Aircraft Industries Ltd. and would sell for an estimated $3 million. Israel Aircraft Industries recently signed an agreement with Boeing Co. to market the missiles and manufacture half of each system.


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GLOBAL WRAPUP
Blair's Labor Woes

Jousting between Prime Minister Tony Blair and Britain's labor unions could jeopardize Blair's plans for a growing private sector role in the London Underground and the National Health Service. Striking rail unions have recently disrupted commuter traffic in London and other cities. Blair enraged the unions on Feb. 3 by calling them "conservatives who believe the old ways will do."

Labor unrest is likely to increase. Although strikes won't jeopardize Blair's majority in Parliament, they may hamper his efforts to improve transport, health, and education. Blair's Labour Party is likely to be judged on the quality of these services in the next general election, which must take place by May, 2006.




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