Sarkozy to address a nation in turmoil over cash scandal

AFTER weeks of turmoil over a political donations scandal, French president Nicolas Sarkozy will make a rare summer address to the nation today, a day before a key pension reform is presented to the cabinet.

The furore over alleged cash handouts by France's richest woman, the L'Oral heiress, Liliane Bettencourt, and her late husband, to conservative politicians has shaken Mr Sarkozy and helped to drive his approval rating to a record low.

The president is expected to try to quash the growing scandal by attempting to steer attention back to pension reform, which is highly unpopular with voters and unions.

Embattled employment minister Eric Woerth plays a central role in the affair, as he was Mr Sarkozy's election campaign treasurer at the time of the alleged donations and is in charge of a pension reform to be presented to the cabinet tomorrow.

Despite isolated calls for Mr Woerth to resign, or for Mr Sarkozy to bring forward a cabinet reshuffle planned for October, the president seems determined to tough it out in the hope that the story will die away during the summer holidays.

Critics say the government is in crisis.

"There's nothing more (Mr Sarkozy] can do by talking, the French are waiting for action," Jrome Cahuzac, Socialist president of the finance commission, told Sunday newspaper the Journal du Dimanche.

"The events are all as sordid as each other. The French can no longer accept this decay," centrist leader Franois Bayrou told Europe 1 radio.

A source at the presidential palace has said Mr Sarkozy's planned appearance is not related to the political crisis.

The government has said Mr Woerth has not been weakened by the affair and that he has Mr Sarkozy's full support.

Woerth told the Journal du Dimanche yesterday he wanted to be given a hearing as quickly as possible in order to prove his innocence.

An inquiry into the affair "is a good thing, it allows you to tell the truth", he said.

One facet of the scandal focuses on allegations of tax evasion. Ms Bettencourt's financial adviser has acknowledged she kept ?€78 million in two foreign accounts and has promised to get her affairs in order.

Mr Woerth's wife worked at a firm that helped to manage Ms Bettencourt's fortune, but quit when the scandal broke. Mr Woerth himself was budget minister until months ago, leading a high-profile crackdown against tax-dodging.

In an emotional television interview last week, he denounced the "outpouring of hatred" against himself and said he was the victim of "a political cabal orchestrated by the Socialist party".

Mr Woerth has long been the treasurer of Mr Sarkozy's UMP party.

Mr Bettencourt's former accountant told French investigators that the heiress's financial adviser gave €150,000 in cash to Mr Woerth to contribute to Mr Sarkozy's 2007 presidential campaign. The alleged sum would greatly exceed the legal limits for campaign financing.

A survey has shown Mr Sarkozy would lose the next general election, in 2012, to Socialist Party leader Martine Aubry.z