France's Sarkozy names moderate Fillon as PM

PARIS, May 17 (Reuters) French President Nicolas Sarkozy named moderate conservative Francois Fillon as prime minister today, banking on the discreet aide's negotiating skills to push through sweeping reforms in the face of union resistance.

On his first full day in office, Sarkozy held a breakfast meeting with Fillon before confirming the appointment of the 53-year-old who masterminded Sarkozy's presidential campaign.

Fillon worked with powerful trade unions when he was social affairs minister to push through sensitive pension reforms in 2003, making him a natural choice to spearhead Sarkozy's changes to labour laws and the pensions system.

''I will keep all the commitments we have made,'' Fillon said in a speech during a handover ceremony with outgoing prime minister Dominique de Villepin. ''I will listen to everyone because a France in motion needs everyone,'' he added.

Commentators say Fillon's cool temperament is the perfect foil to Sarkozy's high-octane personality, saying that in the ''calm break'' with the past that Sarkozy has called for, the president is the break while Fillon is the calm.

The pair met more casually shortly after Fillon took office, to go for a jog together in a wood on the edge of Paris.

Traditionally, the prime minister heads the government and is in charge of carrying out policy while the president plays a more hands-off role, overseeing government without necessarily being involved in daily details.

Sarkozy, however, has said he intends to play a far more active role during his five-year term, focusing on his pledges to loosen employment rules, restore full employment and clamp down further on crime.

To do that, Sarkozy must secure a majority in June's parliamentary election or face 'cohabiting' with a left-wing government, which would compromise his reform agenda and limit his role to little more than foreign policy and defence.

CABINET TALKS An IPSOS poll yesterday put support for his UMP party at 40 per cent, an improvement of 1.5 points compared to the last election in 2002, which the right won. The opposition Socialists and their allies were roughly unchanged at 28 per cent.

Union leaders have said the fact Sarkozy won 53 per cent of the vote in the May 6 presidential run-off ballot did not mean they could be steamrolled into accepting his programme.

Sarkozy has said he wants to move quickly but he will want to avoid a repeat of last year's botched youth labour reforms which Villepin was forced to withdraw after nationwide protests.

Sarkozy is set to name a slimmed-down cabinet of 15 full ministers tomorrow, half of them women, and an aide said it could hold its first session that afternoon.

The cabinet line-up remains uncertain but popular leftist Bernard Kouchner appeared set to become foreign minister, a move that ties in with Sarkozy's pledge to focus on human rights.

Kouchner was among the politicians who held meetings with Fillon in the new prime minister's office today afternoon.

Others included former labour minister Jean-Louis Borloo -- who political sources said is likely to take a new post overseeing economic strategy -- and veteran Alain Juppe, tipped for a powerful new sustainable development ministry.

Leading female contenders are former defence minister Michele Alliot-Marie, who is likely to switch to the interior ministry, and Sarkozy's campaign spokeswoman Rachida Dati, tipped as the next justice minister.

Reuters PB DB2142