The Banque de France employs 14,000 people. The Bank of England employs 1,836

The champion swimmer Laure Manaudou was France's best hope to win a gold medal at next year's Olympic Games in Beijing. Then she fell in love with an Italian swimmer, fought with her French coach and stamped off to Italy in a huff, writes Lara Marlowe.

But her new Italian coach dumped her after only three months because the Frenchwoman refused to do exercises, reduced her swimming regimen from 17km to 6km per day, and was reachable only by text message.

France's reaction to Manaudou's misadventure says a great deal about the country's attitude towards life, work and competition. The sports minister pleaded for understanding. An editorial in the left-wing newspaper Libération exhorted the French to support her. Denouncing "the dictatorship of financial and media interests", Libération said Manudou's "human, too human, reaction to the delirium of high competition has brought a sudden breath of fresh air to this world asphyxiated by money and nationalism."

No one in France dared state the truth: that if Manaudou is to have a hope of winning gold in Beijing, she'd better get her act together and swim until she drops.

The French want to enjoy life and win too. During the paralysis of the Chirac years, it became obvious that this was not possible. In one decade, France fell from fourth-ranking to sixth-ranking economic power in the world, from 7th to 17th in terms of per capita income.

In May, Nicolas Sarkozy was elected president largely on promises to reverse the country's decline. For two months, fate seemed to smile on him. His 53 per cent victory confirmed a popular mandate for change, which might discourage protest against reform. Opinion polls have continued to show that nearly two-thirds of the French support Sarkozy and he has five years to fulfil his campaign pledges.

In June, French unemployment fell to 8.1 per cent, its lowest rate in a quarter of a century.

Sarkozy has made liberalisation of the labour market a top priority. "Work means freedom, equal opportunity, social advancement, respect, dignity and real citizenship," he told the audience at his investiture as candidate for the right-wing UMP last January. "The problem is that France works less while others work more. Full employment is possible in other countries; it is possible here too. You must love work, not hate it."

The real test will come before the end of the year, when Sarkozy attempts to reduce the dozens of categories of French work contracts to a single contract. The texts were fine-tuned over the years to provide protection for specific categories of employees. By wiping away those protections, Sarkozy could provoke protests comparable to the anti-CPE (first job contract) demonstrations that poisoned the last year of the Villepin government. The planned reform of the French university system is equally explosive.

Sarkozy violated protocol by attending the Eurogroup finance ministers' meeting in Brussels, to plead for understanding for France's high budget deficit. He would have to spend money to achieve structural reform in France, he argued. "What reforms?" other Europeans are still asking. Sarkozy offered a few hundred million euro in savings through the non-replacement of retiring civil servants, but there was nary a word about pensions or the social security system, which is €12 billion in debt.

The French civil service employs 5.2 million people. Their salaries and pensions represent 45 per cent of the government budget. By way of example, the Banque de France (which should not have much to do since the advent of the single currency and the European Central Bank) employs 14,000 people. The Bank of England - which manages sterling - employs 1,836.

Sarkozy promised not to replace one in two retiring civil servants; now the government says that in 2008, only 22,700 of 70,000 retirees will not be replaced. As Jacques Marseille, a prominent economics professor and columnist says: "So when will we see the 'rupture'?"

Economic optimism began to sour in August. Statistics showed a French trade deficit of €15 billion for the first six months of the year, compared to €12.9 billion for the first six months of 2006. Poor growth figures followed within days. The French economy grew only 0.3 per cent in the second trimester, whereas growth of 0.6 per cent was expected. The finance ministry attributed the poor showing to uncertainty over the presidential and legislative elections - in other words, investors were afraid the socialists might win. But economists said it was caused by the trade deficit. Sarkozy had counted on up to 2.5 per cent growth this year to finance his programme. At best, economists say, he will have 1.8 per cent. The 'subprime crisis' made matters worse, dragging the French Bourse down with world stock markets.

Nicolas Sarkozy enjoys a positive image in the business community, where the mood has improved vastly since his election. The next six months will tell whether Sarkozy's youth and energy can outweigh increasingly unfavourable conditions.