French Revolution: Sarkozy takes on the welfare state.

Opinion Journal

Unveiling his domestic reform agenda in Paris Tuesday, Nicolas Sarkozy called for "a new social contract" for France. His proposed revision of French socialist tradition going back to Jean-Jacques Rousseau is nothing short of revolutionary. His ability to deliver will make or break his presidency.

True to character, Mr. Sarkozy came out swinging. The new President declared that France's generous welfare state is "unjust" and "financially untenable," "discourages work and job creation," and "fails to bring equal opportunity." The result: France's jobless rate is the euro zone's highest.

The President wants "a new social contract founded on work, merit and equal opportunity." He promised to loosen restrictions on working hours and toughen up requirements for jobless benefits, to ease hiring and firing rules and reduce incentives to retire early.

Cautious optimism is in order. Over the summer, his new government moved gingerly. An autonomy plan for universities was watered down. A law assuring minimum transport services during strikes, intended to weaken the unions, was as well. On the plus side, wealth and income taxes were cut and the inheritance tax abolished. Fine. But considering his strong mandate and dominance of parliament, Mr. Sarkozy didn't overachieve.

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