France's Sarkozy stakes crisis leadership claim

By James Mackenzie - Analysis

PARIS (Reuters) - French President Nicolas Sarkozy was uncharacteristically silent when the global financial crisis broke last month, but he has seized the chance to lead from the front as Europe struggles to come up with a unified response.

With U.S. President George W. Bush largely sidelined in the crisis and the leaders of Britain and Germany facing domestic political troubles, Sarkozy has seen a gap and tried to fill it.

After hesitating at first, he has lambasted "crazy" unregulated free markets, pledged tougher market controls, attacked golden parachutes for failed bank chiefs and proposed a summit of world leaders to coordinate responses to the crisis.

"All that is image, posture, words -- but words are important in politics," said Jerome Fourquet, deputy head of opinion research at pollsters Ifop in Paris.

"French people aren't fools. They know Nicolas Sarkozy doesn't have a magic wand to save them from the troubles and turbulence that are affecting the financial planet, but they wouldn't forgive him for not trying."

Sarkozy had been expecting to use France's six-month presidency of the 27-state European Union to deal with issues ranging from climate change to immigration policy, defense and agriculture.

Instead, he has been confronted by Irish voters rejecting the EU's reform treaty, Russia's brief war with Georgia and now the biggest financial crisis since the Great Depression.

Aside from the rhetoric, he has committed 3 billion euros of French money to bailing out French-Belgian bank Dexia (DEXI.PA), and, shrugging off the dire state of public finances, pledged that no depositor would lose a single euro if a French bank got into trouble.

Finance Minister Christine Lagarde has also floated the idea of a special European rescue fund for troubled banks.

"The reaction has been extremely strong," France's junior minister for European Affairs, Jean-Pierre Jouyet, said on Wednesday. "We were the first in Europe to say that Europe would not get out of this unscathed."

CHEERLEADERS

The burst of activity followed Sarkozy's shuttle diplomacy between Moscow and Tbilisi last month to try to resolve the Georgian crisis and carries all the hallmarks of a style viewed with a mixture of admiration and annoyance outside France.

"The French presidency under the leadership of President Sarkozy has been distinguished by the energy and theater for which he is well known," Nick Clegg, the leader of Britain's Liberal Democrats, said at an event in Paris this week.

"But however much energy you have or however much you personalize the presidency of the European Union, you should never forget it is just six months. You cannot change the world in six months," he said.

Sarkozy has called a meeting of European leaders this week to prepare the way for the summit of world leaders which he hopes will take place later this year. This has also provoked mixed reactions.