Leading article: The need to know Chirac

President Chirac is an elusive and contradictory figure. He is also someone the British need to learn to get along with. He has been in office for just over a year. He will occupy the Elysee Palace for another six years and conceivably for another 13, well into the next century. The hopes of Britain playing a more active and constructive role in Europe crucially depend, whoever is in power in London, on whether Mr Chirac will be open to ideas and debate. Getting a fix on his politics, at home and abroad, is an urgent necessity for the British.

Jacques Chirac is hardly a new figure to us. He was ejected from his first, unhappy spell as Prime Minister of France under President Valery Giscard d'Estaing 20 years ago. He traces his ideological ancestry to General de Gaulle: an intriguing mixture of nationalism and Europeanism, conservatism and stateism. None the less, it is often difficult to define what Mr Chirac stands for. He is not a traditionalist Gaullist: he is a reformer who has taken on some of the fiscal excesses of the French state. Some allege this means he is bringing Thatcherite remedies to France. But that is too simplistic. Such a judgement understates the extent of continuity with previous governments, particularly over European policy, where the Franco-German axis and plans for Economic and Monetary Union still form the central pillars of France's view of Europe.

In many ways it has been a muddled first year in power, in part because Mr Chirac has attempted so much, so quickly. Outside France, the resumption of nuclear tests in the Pacific was seen as an egregious reassertion of an outdated French obsession with strategic power. But the tests performed a domestic-strategic purpose. By establishing his credentials as a guardian of French military interests, they enabled Mr Chirac to push through two startling acts of recognition of French military weakness.

The President took the first step towards reintegrating France in Nato after 30 years outside. Then he ordered the downsizing and professionalisation of the French military. Both had been recognised for years as politically hazardous but essential to France's real security interests. Mr Chirac has accomplished both with minimum domestic protest.

The record on social and economic policy is less straightforward. The street demonstrations of December forced the tearing up of parts of the plan to reform the bankrupt welfare state. The Prime Minister, Alain Juppe, is smuggling the pieces back into the National Assembly one by one. As a result, the eventual scale of the cuts is difficult to assess, as is their political significance.

The initial decision to go for sharp spending cuts was, in effect, a rededication to French membership of EMU. Without an assault on social security spending - including health care, in particular - there was no hope of France meeting the criteria for joining a single currency in 1999. The opposition that the plans provoked led many in Britain to believe that Mr Chirac might have to abandon EMU for the sake of keeping the domestic peace. This view - a hope on the part of the Eurosceptics - is misplaced.

By all accounts, Mr Chirac toyed with the idea but decided that the damage to Franco-German relations would be too great. The link between welfare reform and the EMU criteria is not generally accepted in French debate. French officials insist the policy is driven by sound post-Thatcherite economics to reduce the 56 per cent share of the French economy eaten up in the state.

The truth is more muddled. Almost all the spending cuts are being directed into reducing the French government deficit, to meet the Maastricht guidelines for EMU membership. Little so far is being used for Thatcher-style tax cuts. Mr Chirac, by all accounts, finds the business of shrinking the welfare state more painful than Mr Juppe, who is a more orthodox post- Thatcher figure. Mr Chirac hopes in the longer run to rechannel middle class welfare payments to deal with the increasingly ugly social problems of the French inner suburbs.

The "certain idea of France" that Mr Chirac talked of during his election campaign seems to come down to a country made powerful and respected abroad and less socially divided at home. Mr Chirac has begun to position France - sometimes painfully, sometimes surprisingly easily - to face the economic and security challenges of the modern world. He aims to achieve this both by using the state and reforming it by shrinking the state's weight and power: reducing the public sector, merging the franc into the euro, ending France's long isolation from Nato. EMU remains an enormous gamble. But there should be no mistaking the continuing centrality of France's relations with Germany for its European policy. It remains to be seen how long Mr Chirac can square what may yet become a circle: to maintain support for a traditional French approach to Europe at the expense of a reformist approach to the state's role at home.