While the Gaullist UMP (Union for a Popular Movement) of French President Nicolas Sarkozy has secured a clear majority in the new National Assembly, the widely predicted “blue tidal wave” (blue is the colour of the UMP) failed to materialise.

After the final round of the parliamentary election, held on Sunday, the UMP commands 323 out of 577 seats, plus 20 for their allies in the New Centre, a split-off from François Bayrou’s center right UDF (Union for French Democracy).

The UMP had expected to win well over 400 seats. Now it has 36 seats less than in the outgoing assembly. The Socialist Party, on the other hand, did much better than expected. With 205 deputies, it has 56 more than in the previous parliament.

The Communist Party has maintained its vote in some of its traditional working class strongholds and its predicted electoral meltdown did not take place. With 18 deputies (4 less than in the previous Assembly), it has failed to reach the 20 required to have an official parliamentary group, with the financial advantages and privileges that go with it. But it is considering attempting to form a group with deputies from the overseas territories or the four Green deputies, despite their fundamental differences over nuclear energy.

The result of the second round came as a shock to the UMP and a none-too-pleasant surprise to the Socialist Party, whose chairman, François Hollande, had announced that he would consider 140 seats to be a success. It is a definite setback for Sarkozy, who had counted on a massive majority to swiftly implement his so-called “reforms.”

The blow was made even worse by the fact that one of Sarkozy’s major props, Deputy Prime Minister Alain Juppé, failed to be elected in Bordeaux. He has tendered his resignation, and Sarkozy and Prime Minister François Fillon are now obliged to restructure their ministerial team.

Two other high-profile electoral casualties in the Sarkozy camp are the notorious hard-line anti-terrorism judge Jean-Louis Bruguière and Arno Klarsfeld, collaborator in hounding illegal immigrants and devising repressive policies against delinquent youth.

At 60 percent, the turnout was extremely low, about the same as in the first round on June 10. But while in the first round it had been largely traditional voters of the left who stayed away from the ballot box, this time it was the right-wing vote which failed to mobilise.

A major factor in the massive shift in the vote within the period of just one week was the announcement by Economics Minister Jean-Louis Borloo that the government was intending to raise the value added sales tax (VAT) by 5 percent, to 24.5 percent, in order to finance a reduction of social costs for employers.

Borloo made the announcement after the first round of the election, losing all caution in view of the media-trumpeted “blue tidal wave.” An increase in VAT to reduce labour costs means that workers, pensioners, people living on welfare and families with modest incomes pay, in the form of higher prices, for a huge handout to the employers. It represents a sweeping redistribution of income in favour of the rich.

One-and-a-half years ago a similar proposal (an increase in VAT of 3 percent) by Angela Merkel cost her conservative Christian Democratic Union an anticipated majority in the German election. She was then forced to form a coalition with the Social Democrats.

In France, the Socialist Party seized on Borloo’s announcement and made it the centre of its campaign, printing thousands of posters with the slogan: “Vote against a VAT of 24.6 percent.” This had a major impact, as all commentators agree.

Moreover, the announcement by Sarkozy that the minimum wage would not be raised above inflation, and his plans to impose an across-the-board increase in medical costs, undermined the credibility of his slogan “work more to earn more” and his promise to defend workers’ purchasing power.

Le Figaro wrote: “This unexpected affair of the Social VAT” had a “devastating effect on public opinion... How else can one explain such a reversal of the trend?”

By Thursday evening, just three days before the second round, Sarkozy was obliged to intervene and make a considerable retreat. “Sensing that the VAT affair was an electoral bomb, the Elysée blew the final whistle to end the game,” wrote Libération. The president made it known that he would accept “no increase in VAT... that would have the effect of reducing the French people’s purchasing power.” But it was already too late.

The whole affair is politically very instructive. The successes of Sarkozy and the UMP in the presidential election and the first round of the parliamentary election were the result of the complete absence of any serious political opposition. While Sarkozy defended the interests of his class with vigour, the Socialist Party, itself a bourgeois party, could offer no policies to defend the working class, and instead adapted to the UMP candidate. Indeed, the policy differences between the two camps were minimal.

But the emergence of a single social question—which exposed the deeply anti-working class character of Sarkozy’s program—sparked a major shift against him. This demonstrates that Sarkozy’s victory did not represent a shift to the right by French working people, or a mandate for his right-wing policies. Rather, it was an expression of disillusionment and disgust with both the official “left” and the leaders of the outgoing Gaullist government, President Jacques Chirac and Prime Minister Dominique de Villepin.

Sarkozy presented himself in his campaign as a “man of the people” and a “self-made man,” who would shake up and challenge the old establishment. He had previously, as interior minister, distanced himself from some of the most unpopular economic policies of his own party leadership and postured as a populist, while seeking to divert popular discontent along nationalist, anti-immigrant and “law and order” channels.

While the media, as well as the parties of the “left” and the so-called “far left,” were mesmerized by Sarkozy’s supposed strength, his presidency rests on extremely narrow and unstable foundations. His setback in the legislative elections portends enormous social and political struggles.

The Socialist Party’s position is entirely hypocritical. This was confirmed by Eric Besson, a member of Socialist Party presidential candidate Ségolène Royal’s campaign team, who defected to Sarkozy’s camp some weeks before the election. He told a TV audience that the Socialist Party had similarly considered using VAT to finance social security.

The Socialist Party has no intention of utilising its unexpected weight in parliament for a serious struggle against the government. Quite the opposite, frightened by the implications of the social opposition underlying the vote, it is adapting to the Sarkozy regime even more.

Royal has announced her candidacy for the post of first secretary of the party. She stands for a rapprochement with the Democratic Movement (MoDem) of François Bayrou, the former leader of the right-liberal UDF. While the MoDem won only four seats in the election, the party claims that it received 78.000 membership applications since its formation and already has more members than the old UDF.

Throughout the presidential campaign, Royal presented herself as free from the constraints of party discipline and made sharp moves to the right. She has been in increasing conflict with the leadership of the Socialist Party and its first secretary, Hollande, who is her partner and the father of her four children. Indeed, she announced her separation from him on Sunday night, immediately after the election. Hollande has stated that he will not relinquish his position until the party congress in 2008.

The results of the legislative elections underscore the need for an entirely new political perspective for the coming mass struggles. Despite Sarkozy’s legislative setback, he will proceed with historic attacks on the living standards of the working class. The precondition for the defence of the social conditions and democratic rights of working people is a break with the entire political establishment, including the Socialist Party and its allies such as the Communist Party, and the building of a new, genuinely independent political movement based on a socialist and internationalist program.