France and reform: Rosier scenarios FOR most of François Hollande's beleaguered presidency, the French economy has gone from bad to worse. It tipped into recession late last year. Unemployment is at a 16-year high. But now the first signs of a recovery have emerged. This week the Bank of France revised upwards its forecast for third-quarter growth from 0.1% to 0.2%, after a stronger-than-expected second quarter. Earlier this month the OECD rich-country club, which had predicted recession in 2013, said it now expected the French economy to grow by 0.3%. For the battered Mr Hollande, this is soothing balm. "The recovery is here," he had claimed in July. As good news trickled in over the summer, Pierre Moscovici, the finance minister, talked of the government's "ambitious reforms...bearing fruit." On September 11th, even as he said France would miss its budget-deficit target yet again, Mr Moscovici was determinedly upbeat. "We are doing rather better than the average in Europe," he declared. With bad presidential poll ratings and low confidence, the government is eager to seize on any hint of a rebound. Consumer spending has been buoyant. Household and business confidence inched up in August. Stronger growth in America and an improved outlook in the euro zone and in Britain should lift France. Indeed, GDP has now returned almost to its level in 2008. A recovery would be politically handy, too. Mr Hollande extravagantly promised voters that unemployment will start to drop by the end of the year. He has also squeezed taxpayers so hard that Mr Moscovici confessed recently that people are "fed up with taxes." A recent Le Monde headline said there had been no fewer than 84 new taxes over the past two years, starting under Nicolas Sarkozy, Mr Hollande's centre-right predecessor. The tax take has reached 46% of GDP, the highest in the euro zone. When Harris Interactive, a pollster, last month tested words that voters link with the president, by far the most common was "taxes." Having campaigned for office on a promise to slap a 75% tax rate on the rich, Mr Hollande has now called for a "tax pause." Unveiling the outlines of his 2014 budget, to be announced on September 25th, Mr Moscovici promised that 80% of the effort to reduce the deficit next year would come from spending cuts, worth €15 billion, with only €3 billion in tax rises, and that corporate tax would be simplified. In a country temperamentally inclined to pessimism, the change in mood is welcome. Confidence is sorely missing, and constant fiddling with extra taxes has created a nervous uncertainty that deters investment and hiring. Yet the data are more mixed than the government is making out. Industrial production fell in July. Even firms that are starting to invest are still not hiring. The private sector shed 34,600 jobs in the second quarter, and unemployment edged up to 10.9%, suggesting that Mr Hollande can only keep his unemployment promise if he subsidises jobs. Mr Moscovici this week downgraded the official 2014 growth forecast from 1.2% to 0.9%. "This is a very slow recovery," says Laurence Boone, the chief European economist at Bank of America Merrill Lynch. It is not a rebound. The concern outside France is that over-optimism about the economy may ease the pressure to improve competitiveness. Mr Hollande seems to prefer minimalist reform without protest to taking on vested interests so as to achieve something more ambitious and long-lasting. "His hallmark is caution," comments one Socialist deputy. The latest example is his pension reform, designed to plug a €20 billion ($27 billion) deficit by 2020. It does not increase the retirement age. It lifts the pension-contribution period from 41.5 to 43 years, but only for those born after 1973. It leans heavily on higher contributions by employers and employees. It does not make up the system's shortfall. And it does not touch public-sector pensions at all. Pierre Gattaz, the new head of Medef, the bosses" club, has dismissed this as a "non-reform." Even the unions opposed to the reform could not draw many people onto the streets in protest this week, because there was so little to be angry about. In perhaps the most damning comment of all, Olli Rehn, the European economic commissioner in Brussels, dismissed it as a "reform à la française." Other reforms to the country's tentacular welfare system lie ahead, including to the generous unemployment-benefit system and to a vast fund drawn from compulsory training contributions. But so do municipal and European elections next spring. A fading sense of urgency and a political desire to soothe disgruntled voters are making it ever more likely that future reforms will consist not of a thorough overhaul but yet more reformettes.