President Nicolas Sarkozy made a startlingly strong speech tonight (September 25, 2008) in Toulon, at the Zenith, in front of 4,000 people. His speech was marked by personal engagement & responsibility, a bold acknowledgment of the unpopularity of certain of his decisions as well as an unveiled description of the risks of the current economic crisis. The crisis, he said, is a reason to accelerate the reforms rather than postpone them.

Nicolas Sarkozy spoke of reformulating the capitalist model à la française — with a grand reduction of the bureaucracy and the elimination of 30,600 state jobs in 2009 (including a diminution of the number of local collectivities), a reform of the educational institutions (-13,500 jobs) as well as the hospitals (with a system of rewards for heightened productivity). Sarkozy also proclaimed the demineralization of the golden parachutes for corporate heads.

In a certain way, I am inclined to call his form of capitalism as Lime Capitalism — a little green, that is. Clearly, Sarkozy is looking to refurbish the right to be an entrepreneur in France and, at the same time, indicated that the State has a role in accelerating the transition to greener solutions (via the incentive of “bonus/malus”). And, as a marker of his desire for a more rapid, effective action, he asked whether Europe would be capable of taking as strong a stance and as rapidly as Treasury Secretary Paulson did in demanding the controversial $700 billion bailout. Sarkozy affirmed, meanwhile, the protection of the savings of all French people should the banking bankruptcies cross the Atlantic.

As a baseline for his lime capitalism, Sarkozy said (and I translate), “If we should tax less investment, tax less work, penalize less effort and success, and tax less one’s own products, one should on the other hand tax pollution.”

Echoing many of his initial messages and promises of his presidential campaign, Sarkozy seemed confident, serious and engaged. My favourite line from his speech was: “The current crisis should prompt us to rebuild the foundations of capitalism on the ethics of effort and work, to find a balance between freedom and rules, and between collective and individual responsibility.” In sum, he was pleading for a new balance between the state and the [free] market.

What I enjoyed most about the speech was the way he took responsibility for his decisions. Rare is the boss that takes such leadership on his government’s policies and pronounce so clearly a personal engagement on the results. I would describe Sarkozy’s Toulon speech, written by his favourite plume, Henri Guaino, as a model way to stand up in the face of difficult times — in stark contrast to Senator John McCain’s approach I might add of putting on hold his campaign — and a way to rally the French people and businesses behind him.

Here is an executive transcript of the speech with some analysis, thanks to 20minutes.fr. And if you want the full monty, it is now out, here — here thanks to Le Monde.

And how did/do you react to Sarkozy’s speech?