The weakening of Sarkozy
It may be that swirling around French President Nicolas Sarkozy is unmasked and shown to be little more than smear and innuendo. Even so, damage will have been done. There seems to be a slow weakening to President Sarkozy's authority. The maestro of bold action has, of late, seemed indecisive. The polls indicate a public tiring of his administration.
The most serious part of the scandal is the allegation that 150,000 euros (£124,000) in cash was secretly given to the Sarkozy campaign in 2007. This would flout laws on campaign financing. The money is said to have come from Liliane Bettencourt, France's wealthiest woman and heiress to the L'Oreal cosmetics empire. The information comes from her book-keeper, who never saw the money handed over but says she was told about it. The cash, allegedly, was passed to Eric Woerth who is current labour minister and in charge of pension reform.
The government fiercely denies this story. The police are now investigating. The president describes it as a "libel that aims only to smear, without the slightest basis in reality". That in itself will not call off the Parisian press pack. Yesterday one reporter said it sounded like the classic "non-denial denial".
It is a golden rule of government scandals that leaders have to get ahead of the story by answering the allegations in detail and providing as much documentary evidence as possible. That has not happened so far.
There are reports that the president and his advisers have considered an appearance on national TV. It may just be he will wait until 13 July and the traditional pre-Bastille address to the nation. If so, it gives the impression of a leader being driven by events. In the vacuum there is the drip-drip of revelation.
It feeds into a growing sense of indecision at the heart of the Elysee. There was the by-now famous case of one of his ministers who treated cigars worth 12,000 euros as a perk of office. In an era of austerity such extravagance no longer flies. In the end , but Sarkozy missed the opportunity to move boldly and decisively.
Now it could be that the campaign contributions can be denied and dismissed convincingly. Then there is the case of Mr Woerth. He may have done nothing wrong but there is a sense of a conflict of interest. While he was in charge of tax, his wife was acting as financial adviser to Liliane Bettencourt. He was also treasurer and party fundraiser for the UMP, Mr Sarkozy's party.
Even without substance there is a problem here of appearance. Mr Woerth also happens to be the minister pushing through controversial pension reforms that have already brought thousands onto the streets in protest. The scandal reveals networks of power and influence and that could stiffen opposition to reform. Some within the UMP want a reshuffle, which presumably means that Mr Woerth, who vehemently denies any wrong-doing, would be moved from his post.
President Sarkozy's party was and has not recovered. He faces re-election in 2012. Yet this is a time when he is committed to pushing through pension reform and France this autumn will have to announce its own austerity plan. The finance minister has said it is a dangerous balancing act between avoiding social unrest while ensuring that France too reduces its deficit. It will be a time for leadership, but the prospect of re-election rarely encourages boldness.
Angela Merkel, Europe's other big leader, is also weakened. She, too, has suffered electoral setbacks and has been damaged by squabbling within her coalition. Fortunately for her Germany is enjoying a strong economic recovery, with an indication in some manufacturing sectors that orders are back to pre-recession levels.
The European summer will bring only light relief. The crisis in the eurozone has not been solved. Differences between some euro economies are growing, not diminishing. Growth in many countries is anaemic at best. In the autumn protestors will challenge the austerity programmes on the streets across Europe. Someone will have to make the case to Europe's voters that their cherished way of life with its strong social programmes cannot be sustained.
It will test Europe's leaders at a time when they are already weakened.
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