Nicolas Sarkozy may only have three weeks left as French finance minister, but it is unlikely that he will be content to go quietly.

His seven months in the job have been marked by a frenetic programme to control government expenditure, boost consumer spending, and reform many of France's highly regulated markets.

He has brought retail prices on branded goods down by 2 per cent, led a vociferous campaign to cut the cost of living and is even now railing against the need to pass on oil price rises to gas users.

But perhaps of most interest to investors in the short-term, he has kickstarted the country's stalled privatisation programme, raising a total of €8bn from the sale of government stakes in property, France Télécom and Snecma, the aero-engine maker. He has also given the green light to the partial privatisation of two motorway companies, SAPRR and Sanef; although in order to get the deal past anxious ministers he has had to agree that the proceeds will be invested in transport. The disposals leave the state's corporate interests much reduced. Yet there are some significant assets Mr Sarkozy would like to see well on the way to privatisation before he leaves to run the ruling UMP party.

Areva, the world's largest nuclear energy company, and Electricité de France, the highly unionised public utility, are both scheduled for partial privatisation, but present very different challenges.

Areva is the cleanest and easiest of choices for Mr Sarkozy. There is a revival of interest in nuclear power compounded by the high oil price which could tempt potential investors. But more importantly, the privatisation of Areva is not expected to lead to a public outcry in the same way as a sell-off of EdF has done.

Anne Lauvergeon, the chairman, is keen to come to market and insiders say management is on standby for an announcement at any time. While the finance ministry is clearly pushing for a sale, which could boost its coffers by several billion euros if the estimated €10bn value is correct, the decision now rests with the prime minister.

Meanwhile, Mr Sarkozy is preparing to set out the structure for selling up to 30 per cent of EdF in a capital-raising exercise. An announcement is expected any time from November 15, when the commission charged with examining the options for EdF's future is due to hand its report to the finance minister.

EdF will not be so easy to see off, however. It is heavily indebted, with net borrowings of €24.4bn, has significant off-balance-sheet liabilities, and is a stronghold of the CGT workers' union. Moreover, unlike Areva, it is a potent symbol of public service in France, and its partial privatisation has already sparked much controversy. Nevertheless, the government has pledged itself to a sell-off by the end of 2005, along with its financially more robust but smaller counterpart Gaz de France.

If Mr Sarkozy wants to go out with a bang, he could sell down some of the government's holdings in listed companies. In total, the state owns stakes valued at about €40bn in listed companies such as Renault, Thales, and EADS.

The most obvious candidate for disposal is Air France-KLM, where the government has a 44 per cent stake. At the time of the French carrier's takeover of KLM earlier this year, Mr Sarkozy made clear he wanted to halve the state's holding. Were it not for the high oil price and airline industry uncertainties, that would probably already have happened.

Market insiders say that the finance minister is likely to seize any short-term window of opportunity to reduce the state's holding.

With a stake worth about €1.7bn at yesterday's close, Mr Sarkozy could hand the government quite a hefty parting gift of about €800m to cut the budget deficit. And it will surely do no damage to his ambitions to run for the French presidency in 2007. The only danger for both the government and Mr Sarkozy is if his haste leads to a series of inconsidered fire sales in the current market environment.

peggy.hollinger@ft.com

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