President Sarkozy?

When he took charge of the Finance Ministry in April, Nicolas Sarkozy had one goal: to kick-start the stalled French economy. Boosting consumer spending seemed an obvious place to start. But Sarkozy, as always, was in a hurry: instead of spending months trying to push through a complex legislative fix, he leaned on France’s leading supermarket chains to lower their prices by as much as 2-3% on hundreds of brand-name goods. The result: a mini-spending spree that contributed to estimated growth of more than 2% this year, compared with 0.5% in 2003. Publicizing the agreement, Sarkozy told the press it was merely “what the French people want.” Asked how he got the supermarkets to agree to pinch their prices, Sarkozy smiled and told TIME: “I said, if any [company] refused, I would go on television and tell the public who it was.”

Call it Sarko’s Way: a unique brand of retail politics that has made Sarkozy among France’s most popular politicians — and the odds-on favorite to succeed President Jacques Chirac in 2007. He lasers in on an issue that resonates with the public, devises a quick fix, and then basks in the media’s attention. Sarkozy has used this method to great effect since joining Chirac’s Cabinet as Interior Minister in May 2002 and then moving on to the finance post in April — and he has some real achievements to show for it.

In 2002, insecurité — fear of rising crime and a sense that illegal immigration was out of control — was on peoples’ minds and fueling the surge of Jean-Marie Le Pen’s xenophobic National Front. Interior Minister Sarkozy put more cops on the street and introduced monthly performance ratings so people could see the results. He ordered high-profile raids on organized crime gangs, chased prostitutes out of residential areas, and built detention centers for illegal immigrants, accompanying each initiative with a media blitz that let people know what was going on — and who was making it happen. Although the number of assaults rose, the overall crime rate dropped for the first time in five years, and the French started feeling safe again. “People were very worried about crime,” Sarkozy recalls. “The élite, the pundits, said, ‘There is no threat. People just think there is.’ I helped reduce that perception gap, and acted on those real fears.” Now he wants to take his approach to the Elysée. Is France ready to put Sarko in charge?

Sarkozy, 49, has no doubt. During a conversation with TIME last week in his top-floor office overlooking Notre Dame, he rejected the view that France was too stuck in its ways to embrace the kind of dramatic change he envisions — lower taxes, flexible labor markets, more freedom for innovation and enterprise, more equality for minorities. “Is France reformable?” he asked himself, sitting at a long conference table with a dossier-laden desk at his back and a humidor stuffed with good cigars to his left. Then he lunged across the table to press home his point. “My reply is, without hesitation, yes. France not only can reform, it’s waiting for it.”

France may not have to wait too long. Next month Sarkozy will resign as Finance Minister after his expected election to the relatively obscure post of president of his party, the Union for a Popular Movement (UMP). The ump is the successor to the Rally for the Republic, the party President Jacques Chirac founded in 1976 to support his presidential ambitions. Sarkozy is expected to use the ump post for the same purpose.

He is an unlikely success story. The son of a Hungarian immigrant, he eschewed the Ecole Nationale d’Administration, which traditionally trains the country’s administrative, business and political élite. Instead, he studied political science at the Institut d’Etudes Politiques in Paris, and later law at the Paris University’s suburban Nanterre campus. At 17, he got into politics through conservative youth organizations, and at 22 won a seat on the municipal council in the posh Paris suburb of Neuilly-sur-Seine. In 1983 he was elected its mayor, and five years later joined Parliament. Sarkozy’s commitment and dedication helped make him a Chirac protégé; for a time he even dated Chirac’s youngest daughter, Claude.

But in 1993, when he was 38, Sarkozy became Budget Minister and spokesman in the government of conservative Prime Minister Edouard Balladur. In the 1995 presidential race, he ditched a 20-year allegiance to Chirac to back Balladur, who was then riding high in the polls. But Chirac ended up in the Elysée, and Sarkozy found himself in the political wilderness. 404 Not Found

nginx/1.14.0 (Ubuntu) The episode poisoned their relationship. The two men “hate each other,” one Sarkozy adviser says bluntly. “Chirac will never forgive Sarkozy for Balladur, and wants to block his career.” Chirac, 72, has not said whether he will seek a third term in 2007, but a clash with Sarkozy seems inevitable.

By April 2002, Chirac was having some of his own popularity issues, and Sarkozy had restored enough of his luster for a return to government. But he brought more than just new energy and unbridled ambition to the Interior Ministry; he brought his wife, Cécilia, who is a key adviser. In a nation where political wives are rarely public figures, Madame Sarkozy’s presence raised eyebrows. But as her considerable — some say inordinate — influence has become known, she’s increasingly viewed as a political figure in her own right. “She’s been central to my life and my career for 17 years,” Sarkozy says. “Why should I pretend otherwise?”

Throughout his career, Sarkozy has impressed colleagues and voters with his refreshing mix of intelligence, straight talk and ideology-free pragmatism. “The rigidities of ideology limit your choices when the best solutions might involve a mix: more liberalism where best, intervention when necessary,” he explains. But that mix can seem a bit muddled at times.

Behold the believer in free markets. As Finance Minister, on Sept. 1, Sarkozy decided to sell off a €4.6-billion chunk of France Telecom, reducing the government’s stake to under 50% for the first time; on Sept. 2 it was finished. Last month he moved to waive inheritance taxes on sums below €100,000 per estate, suspended a 3% corporate tax, and withstood stiff protests from unions to lay the groundwork for the partial privatization of Electricité de France. He also deplores France’s 35-hour workweek, and says it must be changed to allow those who want to work more to do so.

And consider the blatant interventionist. Sarkozy brokered the €2 billion state bailout of engineering giant Alstom, angering E.U. members who called it an unfair protectionist subsidy. He also coerced Franco-German pharmaceutical giant Aventis into merging with French competitor Sanofi-Synthelabo, neither of which is state-owned, to thwart takeover plans by Swiss rival Novartis. “I’m conservative, liberal-inclined and I believe in market economics,” Sarkozy says. “But when an issue lands on my desk, I don’t spend time wondering what [David] Ricardo, Adam Smith or [Friedrich] Hayek would have done. Ideologies have been replaced by principles of realism and pragmatism, and I don’t rule out the possibility to intervene when intervention is called for.”

Last month Sarkozy was in interventionist mode when he contended that low corporate tax rates in the European Union’s 10 new member states were unfairly sucking jobs from the west. His solution was as simple as the supermarket price cut: either the low-tax E.U. nations raise their rates or risk losing billions in E.U. development aid (see Au Revoir Les Jobs). “I’m not against outsourcing per se, I’m just demanding that the competition driving it is fair,” Sarkozy says. “Nations can’t claim to be rich enough to do away with taxes, while also claiming to be poor enough to ask other nations to provide funds for them. As with insecurité, the experts say, ‘Outsourcing is a good thing. It leads to progress. Don’t worry about it.’ But the nation is scared.” Sarkozy now proposes to grant €1 billion in tax breaks to companies that keep outsourceable manufacturing and service jobs in France, or relocate them to one of 20 “competitiveness zones” to be established around the country.

The moves helped calm the jangled nerves of French workers, but raised fresh questions about Sarkozy’s methods. The call for tax harmonization is an easy populist win, but higher corporate taxes will likely do nothing to protect French jobs and could end up making the E.U. a whole lot less competitive. “The question isn’t halting the departure of lower-skilled jobs to cheaper markets, and Sarkozy should know that,” says Marc Touati, chief economist of Natexis Banques Populaires. “The challenge is getting those same companies to reinvest gains made from outsourcing to create new jobs in research, hi-tech and skilled services back home.”

It all just reinforces the impression among critics that Sarkozy cares more about publicity than policy. “Politically, it was a smart move,” says French political commentator Alain Duhamel. “Preventing job loss through outsourcing will require careful planning and growth co-ordination on a European level. Sarkozy can’t wait for that, so he addressed concerns now, as best he could, and reinforced his reputation as someone who inspires confidence.”

Yet Sarkozy doesn’t always opt for crowd-pleasing policies. As Interior Minister, he made repeated visits to France’s banlieues, the disadvantaged, crime-ridden suburban housing projects that ring the country’s big cities. On his walkabouts he consulted the mostly minority residents, who welcomed this official recognition from a government they feel too often ignores their concerns. Still, more than once Sarkozy found himself debating angry crowds who felt they were being used as props in his photo opportunities. “People turn in on 404 Not Found

nginx/1.14.0 (Ubuntu) themselves when they feel humiliated and unprotected by the state,” Sarkozy says. “The kids on the banlieue will stop turning inward in anger when they look up and see that they, too, can be a judge, journalist, prefect or politician.”

Sarkozy has championed other controversial proposals. In 2003 he supported the creation of the French Council of the Muslim Religion, France’s first official body representing the country’s estimated 6 million Muslims; he broke a national taboo by calling for positive discrimination to “jump-start an integration model that has broken down”; and he opposed the controversial law banning Muslim head scarves and other overt religious symbols in French schools. “You can’t solve problems and enforce security through repressive measures alone,” Sarkozy says. “I believe those who work more should earn more. But I also feel those facing unfair disadvantages and barriers should be helped to break through them until everyone is getting the same chances. I’m more for equity than equality. If that’s an ideology, then you can label me with it.” Sarkozy will find his political courage tested if he does get the chance to fix France, which continues to suffer from chronically high unemployment, rigid labor laws and falling competition rankings.

Sarkozy seems convinced that his communication skills and political instincts will serve him well in the run-up to the 2007 campaign. But it’s almost three years until the presidential election, and that must seem an eternity to one as fond of the media glare as he is. That, of course, is why Chirac insisted that Sarkozy leave the Cabinet to take up the ump post. “Chirac is depriving [Sarkozy] of his government spotlight, betting that without much media exposure at the ump, [his] popularity will dwindle,” says one ump official and a former Chirac adviser. Sarkozy doesn’t deny the risk, but says he’ll stay in the public eye. “There’s very little risk you won’t be hearing from me,” he says. Those who know him are sure he’s right. One consultant to many leading conservatives expects him to use the job to snipe at government policy and chip away at any desire Chirac may have to run for a third term. “The problem with Sarkozy is he’s a young Chirac,” this insider claims. “He has no other program besides getting elected President. Once he’s there, shop’s closed.”

Sarkozy dismisses such criticism. He’s unapologetic about his ambition in a culture that often discourages it — “Ambition is legitimized when it’s fulfilled,” he says — and takes the Chirac comparisons as a compliment. “To be compared to a man who served two terms as Prime Minister and was elected President twice, I’ve heard worse,” he says with a laugh. Sarkozy says his priority for 2007 is avoid a repeat of the divisions on the right that have led to lost conservative presidencies and parliamentary majorities in the past. He is adamant that if in 2007 “Jacques Chirac is the right’s best candidate to win, I will support him.” Asked who decides which candidate is best, Sarkozy replies, “The French people.” In other words, the campaign has begun.