That the tangled birth of French pension funds could be heading for a miscarriage is the most common fear amongst market watchers after the socialists won the French general election.

The Thomas law - named after Jean-Pierre Thomas, the centre right member of parliament who initiated the pension funds reform - was on the verge of being passed after it cleared constitutional obstacles in March. The application decrees were even ready to be signed at the end of May. But although the majority shift put it all at stake, pension fund reform will not be be buried as a whole, as the degree of opposition displayed by socialists is much less than during the electoral campaign.

Fierce opponents at the onset, they have adapted their stance along the campaign. MP Alain Richard, now minister of defence, had declared in late May : If we win the elections, we will repeal the Thomas law," adding: "Then we'll decide with all the social partners of the necessary conditions to set a negotiated retirement system, based on collective agreements at the corporate or sector level. We will limit fiscal incentives and delete social contributions reliefs."

In short, the socialists disagree with most aspects of the Thomas law. And many pension fund experts rather feel that the left does not want, in any case, to build one of the most important and sensitive structural reforms they have to achieve under a right wing law.

During his key policy speech in June, the new French premier, Lionel Jospin, confirmed this suspicion, declaring he will challenge the Thom-as law provisions, but acknowledged that ""increasing unemployment and demographic evolution"" were ""fragmenting our pay-as-you-go systems"". After this painful miscarriage, a new pension fund act may not be conceived for another couple of years, according to many observers. But at the end of the day, the pensions re-form may eventually meet more support from the left than from the right. Gilles Pouzin"