PARIS (Reuters) ? In February 2007, a fiery Nicolas Sarkozy had millions convinced that he - a go-getter abandoned as an infant by his Hungarian father - would break with the past, end chronic unemployment and restore a sense of pride to France.
His luster began fading within hours of his May 6 election win, as he celebrated with corporate chiefs and pop stars at a gaudy nightspot and set a presidential tone many French people soon felt was showy, impulsive and even vulgar.
Now rated France's most unpopular president, he trails Socialist Francois Hollande in opinion polls for an April-May election at a critical moment for Europe. Sarkozy will struggle to recover in time for a vote whose outcome may well influence economic reform in France and across the euro area.
Aides say when he launches his campaign in the next few days Sarkozy will apologize for failing to keep pledges derailed by the debt crisis but insist he is the best person to revive the French economy. He will champion reforms to boost competitiveness and slim the welfare state.
That may not be enough to overcome a visceral dislike of Sarkozy among many voters, even in his own conservative camp, an issue that weighs on him, members of his inner circle say. Painstaking efforts to project a calmer, more presidential manner have so far failed to convince the public.
Three years have passed since the most striking episodes - his penchant for flashy watches and yachts, his public wooing of model Carla Bruni, an attempt to give his student son a public job and his telling a man in a crowd to "Get lost, jerk."
He has worked to diminish an early impression of being impatient, pushy, fidgety and brusque.
But the passion with which many French people vilify him is extraordinary and suggests the magic he worked in 2007, filling auditoriums with thunderous applause, may not work again.
"He knows he is disliked and he suffers internally from this personal rejection," one of Sarkozy's advisers said on condition of anonymity. "Of course we talk about it with him but it's very awkward and it will be hard to overcome it in the campaign. The French don't want some kind of sentimental circus."
While his hands-on style of governing won Sarkozy plaudits during the 2008 financial crisis and last year's Libyan uprising, his micromanaging of ministries and a manner molded more on British prime ministers than his aloof predecessors has become a handicap, aides say. Interior Minister Claude Gueant, one of Sarkozy's most loyal aides over the years and an architect of his 2007 campaign, acknowledged the problem on television in early February.
"It's true that in 2007 people felt an affectionate impulse towards Nicolas Sarkozy. Over the course of time an affection deficit has been created," Gueant said.
A redoubtable campaigner who is at his best in a crisis, Sarkozy will strive in a rapid-fire nine-week campaign to keep the focus on his credibility as a leader, people in his inner circle say, and shrug off misgivings over his character.
That tactic was behind his effort in January to woo back the Paris press pack, which he has mostly kept at arm's length, opening up in an informal three-hour chat to reporters on a trip to French Guiana where he conceded he could lose the election.
"He knows this election is different but believes he can win if he is the most credible candidate," said Eric Raoult, Mayor of Paris suburb Le Raincy and a friend of Sarkozy for some 30 years. "People can say they are disappointed with him or can't stand him on a personal level, but he's still the one they want at the controls."
WHERE DID IT ALL GO WRONG?
Sarkozy came to power vowing to achieve full employment by the end of his term and raise purchasing power, summed up in the slogan "work more to earn more." He promised a break with the stagnation of Jacques Chirac's latter years.
He pushed through a widely praised higher education reform in 2009 that gave universities more autonomy and in late 2010 he saw off street protests to raise the retirement age by two years to 62. He cut taxes on hours worked above the 35-hour week, to encourage more work, and tweaked income tax bands, generally in favor of the wealthy.
But, fearing social unrest, he balked at deeper structural reforms, leaving untouched the welfare state and a rigid labor market that has made French firms increasingly uncompetitive and contributed to a record 70 billion euro trade deficit in 2011.
Sarkozy was lauded for showing leadership during the 2008 financial crisis. He was criticized for allowing the public deficit to swell - due partly to tax cuts worth some 15 billion euros a year. That left public finances so vulnerable that Standard & Poor's downgraded France's AAA credit rating for the first time last month - a blow Sarkozy said in advance could be "the death of me."
France's state auditor warned this month that as things stand it would take 10 years to reach budgetary equilibrium.
"It was an absolutely huge mistake to think he could solve the crisis by increasing the public debt," said economist Jacques Attali, who has worked for left-wing governments but also advised Sarkozy when he reached out to centrists and some Socialists early in his term.
Sarkozy recently announced a blitz of measures to lower labor costs by reducing payroll charges on companies and raising sales tax instead, saying France faces a crisis unless it boosts competitiveness.
"The fact he is rushing these reforms through now, at the peak of the euro zone crisis, means he cannot use the 2008 crisis as an excuse for not doing them earlier," said Attali. "He cannot possibly say he has done the best he could."
When Sarkozy took office the economy was growing at a 2.1 percent clip and unemployment was 8 percent. On his watch, as crisis battered the world economy, growth has dwindled to zero and the jobless rate is at a 12-year high of 9.3 percent.
Despite a reduction in civil service headcount, public spending has risen to 57 percent of gross domestic product, second only to Demark in the EU, from 53 percent in 2006. The public debt and deficit have swollen to 85 percent and 5.5 percent of GDP from 64 percent and 2.3 percent respectively.
"He was elected as the candidate of purchasing power so he favored consumption over investment, ignored the trade gap, and put France on a Greek-style path," said economist Jacques Delpla. "Whoever wins the election, growth will stay weak."
THE NON-PRESIDENTIAL PRESIDENT
Aside from the poor economic figures, Sarkozy's biggest barrier to re-election may be his personal style, a major reason behind his 68 percent disapproval rating.
Novelist Yasmina Reza, who accompanied his 2007 campaign and wrote a character study, noted a childlike restlessness, a habit of bolting down meals and snacking all day, an inability to be alone and an obsession with asking: "Did you see me? Was I OK?."
She picked out how he differed from the French presidential norm: he's boastful, sentimental, tactile, sharp-tongued and has a short attention span. He dislikes train journeys and prefers the city to the countryside, looking famously ill-at-ease astride a stocky white stallion for a rural campaign photoshoot.
Sarkozy raised eyebrows with his party at Fouquet's, on the Champs Elysees, with corporate millionaires and rock star Johnny Hallyday - a tax exile resident in Switzerland - and a gaudy victory cake with a "Tricolore" Arc de Triomphe on top.
Soon afterwards, his leaked text messages revealed a soap-opera private life as his second wife Cecilia left, causing him visible pain, and he began a whirlwind romance with Bruni. Paparazzi had a field day as he whisked the striking-looking singer to Disneyland Paris - a huge taste faux-pas for some French - and to Jordan and Egypt.
Within a year of his election, two-thirds of respondents in polls had a negative opinion of him, a record at that stage. Left-wing intellectuals sniffed that the "bling bling" Sarkozy had "pulverized" the presidential institution.
"People wanted energy, but they didn't necessarily want Ray-Bans and Rolexes," explains Socialist lawmaker Christian Paul.
Bruni, ironically, has used her influence to tone down Sarkozy's manner. She also honed his dress sense. His efforts to appear more presidential were clear when the birth of their first child last year was kept well out of the public eye.
The Italian-born first lady has steered him towards classic literature and films. Sarkozy keeps in shape with daily jogging but now avoids the suntan he sported early on. Already a teetotaller, he now eats healthily and shuns junk food.
"There is not the same arrogance, or the uncouth outbursts, that fed my sketches at the start," Le Monde cartoonist Plantu told Reuters. He has drawn countless caricatures of a crazed or demonic-looking Sarkozy, often with flies circling his head.
"The packaging has changed, even if he's the same on the inside, and he doesn't merit the same thrashing. I don't think we can be so certain he will lose the election," Plantu said.
But it may be too late to change Sarkozy's image.
THE SHAPE OF THE CAMPAIGN
Raised in an upmarket Parisian suburb, Sarkozy differs from most politicians of his rank by not having a rural support base.
He has rented a no-frills 1960s office building near the UMP's headquarters in the low-key 15th arrondissement of Paris to run his campaign, and has re-hired Emmanuelle Mignon, a former adviser, to steer the program.
Aides say he wants to run things mostly himself, although he has succumbed to party pressure to announce his candidacy in mid-February, earlier than he had planned, and likely in the wake of a successful Greek bailout deal.
"This will be an election where just when everything seemed lost, it will rise again from the ashes," Sarkozy told aides at a recent meeting, amid mutterings of low-morale in his camp. "When I get into the campaign, you will not be disappointed."
He set the stage this week with an interview with conservative-leaning Le Figaro magazine in which he pledged to overhaul the education system and make the jobless work for their benefits. He also sounded a tough note on immigration, saying he would tighten procedures for asylum seekers and for foreigners accessing housing and benefits.
Sarkozy laid his campaign track in a New Year address that set the way for a sudden rush of activity to cut company payroll taxes, create a financial transactions tax and loosen the 35-hour week law - a new focus on export markets over domestic spending that opponents say is too late to be convincing.
While he has criss-crossed France since then to be photographed with overalled workers, his UMP party has pushed through legislation outlawing genocide denial, seen aimed at courting the votes of half a million ethnic Armenians in France.
He has enlisted the support of German Chancellor Angela Merkel, who is highly rated in France and plans to join him at political meetings ahead of the election as head of her conservative Christian Democrat (CDU) party.
His task now is to get his personal message right.
"He won't be able to recreate the magic of 2007," said Alain Minc, an economist and long-time adviser to Sarkozy. "But he can say that he can get France out of this crisis whereas Hollande would have us crashing into the wall two years from now."
(Reporting By Catherine Bremer; editing by Janet McBride)
Source: http://us.rd.yahoo.com/dailynews/rss/economy/*http%3A//news.yahoo.com/s/nm/20120212/ts_nm/us_france_election_sarkozy
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Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By. 
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Public release date: 27-Feb-2012
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