Lagarde sparks French mini reshuffle

PARIS: A move to the IMF by France's Christine Lagarde would trigger a mini reshuffle that President Nicolas Sarkozy could use to make his government more appealing to centrist voters ahead of a tough re-election battle.

If the International Monetary Fund picks Finance Minister Lagarde as its new chief by June 30, as is widely expected, her shoes will be tough to fill as one of France's most high-profile and able ministers, and a key negotiator for its G20 agenda.

Yet her exit would give Sarkozy a chance to promote some centre leaning conservatives to try to counter a threat to his re-election from a breakaway group of centre-right politicians led by former energy minister Jean-Louis Borloo.

Polls show Sarkozy has alienated many centrist voters in recent months by taking a hard line on issues like immigration to try and stifle a surge in support for the far right.

Previous reshuffles have weeded out many of the leftists, centrists and women from his original team, and brought in old-school conservatives. Balancing them now with centrist-friendly faces could reduce the risk of Borloo taking a bite out of Sarkozy's vote tally in the April 2012 election.

"He will use the reshuffle to appoint centrists," said Stephane Rozes, head of political consultancy cap. "It will be a way of showing how he can push forward new talent."

Lagarde is expected in Washington as early as next week for an interview with the IMF Board.

Aides say Sarkozy would most likely replace her with budget minister and government spokesman Francois Baroin, who has a good grip on euro zone and French economics, although a weak spot is his poor English.

Two other names being circulated are Agriculture Minister Bruno Le Maire, a Germany expert and fluent German speaker who is close to another breakaway centrist, Dominique de Villepin, and Valerie Pecresse, who as higher education minister has pushed through reforms to make universities more autonomous.

Pecresse has a strong economic background and speaks English, Russian and Japanese.

A fourth contender could be Environment Minister Nathalie Kosciusko-Morizet, an ambitious and adept technocrat.

Sarkozy has to rethink his strategy for 2012 following the sudden downfall of Dominique Strauss-Kahn, the former IMF head and Socialist Party star who was seen as the left's best chance of winning power after three terms in opposition.

Strauss-Kahn quit the IMF and dashed his election hopes when he was charged with trying to rape a New York hotel maid.

His exit from the race means Sarkozy is now likely to face an old-style leftist like Francois Hollande or Martine Aubry in 2012, giving him more chance of winning back centrist voters who might have backed Strauss-Kahn, a pro-market centre-leftist.

"The Strauss-Kahn affair has prompted him to try to rekindle things with centrist voters," Rozes said.

Opinion polls show Hollande or Aubry could beat Sarkozy, but the president's rock-bottom popularity ratings are creeping up steadily since the Strauss-Kahn scandal.

All four possible contenders for the finance ministry are in their 40s or younger and more centrist minded than conservative veterans recently added to the government like Foreign Minister Alain Juppe or Interior Minister Claude Gueant, who has sounded almost far-right as he clamped down on immigration.

At the same time, Baroin, Le Maire and Pecresse have all been close to former President Jacques Chirac, so promoting them would show Sarkozy has ditched an old vow to completely bury old-style conservatism.

"They are all young, Gaullo-centrist and have given signs of having earned trust. These are assets," said Rozes.

Many see Anne-Marie Idrac a centrist former foreign trade minister as best placed to replace whoever becomes finance minister.

Sarkozy is seen as keen to promote women, as the departure of the chic, silver-haired Lagarde would add to the loss of Michele-Alliot Marie as foreign minister following blunders over North Africa.

"His priorities are women and centrists. He feels he cannot only promote men," a presidential aide told the daily Le Figaro.

Copyright Reuters, 2011