France has had a rough year but, its "political class" has every reason to look forward eagerly to the, next 12 months. Once the summer holidays are over, the presidential election season will be well under way. The final round next May looks like pitting Ségoléne Royal for the Socialists against Nicolas Sarkozy for the right-of-centre UMP. "Sego versus Sarko" already has the look of a classic -- the political equivalent of the Ali-Frazier fight, matching up two formidable opponents with intriguingly different styles.
The presidential election will be great theatre. But it also comes at a moment when the French are clearly desperate for new political leadership. The public's mood is bleak. A recent Louis Harris poll showed that 85 per cent of French people, think their country is on the "wrong track". Political extremism flourishes in such a climate. In the last presidential election in 2002, 35 per cent of voters cast their initial ballots either for the extreme right or the extreme left since then the evidence that France is "in crisis" has only mounted.
Indeed, it seems that France faces not one crisis but three: a social crisis, an economic crisis and an identity crisis. Each of these problems has had its signature event over the past 14 months. Last November, the depth of France's social problems was revealed when the country faced 25 consecutive nights of rioting in the banlieues -- the deprived suburbs, where poor, unemployed Muslim immigrants tend to live. The difficulty of economic reform was underlined in February when the government had to withdraw its efforts to make it easier to hire and fire young workers, after millions of demonstrators took to the streets. there are also new uncertainties over France's role in the world. For the past 50 years, France has built its foreign policy around the construction of a strong Europe. But in May 2005, French voters rejected plans for a new constitution for the European Union, creating a dilemma that the country's politicians and diplomats have yet to resolve.
All these crises have manifested themselves in different ways and at different times. But they are also all linked. The connection between youth unemployment levels of nearly 25 per cent and unrest in the banlieues is obvious. But it is not just that economic problems are creating social problems. In a country with as generous a welfare state as France, social problems are also creating economic problems. The government has not run a balanced budget since 1981 and public debt is growing ominously. A report commissioned by the finance ministry concluded earlier this year that: "The continuation of current trends would lead to astronomic public debt levels: 130 per cent (of gross domestic product) in 2020, 200 per cent in 2030, 300 per cent in 2040 and nearly 400 per cent in 2050."
France's "identity crisis" is also contributing to its economic and social difficulties. No less than the Americans, the French like to believe that they are a nation that is both exemplary and exceptional: "l'exception francaise" is a cliché of political debate. But it is becoming harder and harder for the French to maintain their faith that their country has a global significance. As a morose Parisian journalist put it to me recently: "In the period of Louis XIV, France was the world's leading political power; during the Enlightenment, it was the world's leading intellectual power; under Napoleon it was the world's leading military power; after that, France was a leading cultural power - in art, literature and philosophy. But now we have lost even that."
The failure to find a worthy successor to Jean-Paul Sartre is probably not something that troubles many inhabitants of the banlieues. But the French search for something that makes their country exceptional is making the resolution of its economic and social problems much harder. For many French opinion formers, it is the country's social model which now define its role in the world. While the "Anglo-Saxons" push a brutal form of liberalised and globalised capitalism, France, it is argued, can present an alternative model of a more humane social system, which stresses solidarity rather than unbridled competition.
Even President Jacques Chirac nominally a rightwinger -- has compared "ultra-liberalism" to communism and stressed his determination to preserve the French social model. Such talk resonates deeply in France. In a recent poll, just 36 per cent of people agreed that free-market capitalism was the best system -- compared to 66 per cent in Britain and 65 per cent in Germany.
The Ségo versus Sarko fight may well turn on how the candidates exploit these two contrasting strands in public opinion - on the one hand, a deep pessimism about the future and a desire for change; on the other, a deep attachment to a social model which most mainstream economists think is unsustainable, at least in its present form. Although Ms Royal has been studiously vague about her programme, she seems unlikely to campaign on a programme of radical reform to the welfare state. Mr Sarkozy, however, has been scathing about the French social model. In a new book, he writes that: "The best social model is one that gives a job to everyone, so it is evidently not ours, because we have twice as many unemployed as our main partners."
But even a Sarkozy victory in 2007 will be no guarantee of change. As a minister, Mr Sarkozy has revealed strong populist and interventionist instincts that sit alongside his liberalising rhetoric. And while he talks of the need for "rupture", Mr Sarkozy will also be aware that there is a long history of attempts at economic reform in France being derailed by popular demonstrations.
When the French take to the streets, it often seems that they are defending more than economic interests. They are also reflecting a belief that France's social model still embodies the country's historic commitment to "equality and fraternity" and paying tribute to the country's revolutionary tradition. Even Dominique de Villepin, the prime minister, has said with apparent pride that: "In France, reform appears to be against our nature; only revolution seems capable of overcoming inertia and imposing renewal."
Economic reform is hard enough when all you are doing is taking on entrenched economic interests. When you are also taking on a country's perception of its nature and its role in the world, it becomes even more daunting.