Fillon adviser says scandal harms campaign but it's not over

By Ingrid Melander PARIS (Reuters) - Fake job allegations have harmed the campaign of conservative candidate Francois Fillon but the high number of undecided voters means he can still win France's presidential election, close aide Henri de Castries said on Thursday. Fillon, 63, had been favourite to win the election being held over two rounds in April and May, until allegations surfaced in January that he paid his wife hundreds of thousands of euros in public money for little, if any, work as his parliamentary assistant. Fillon, who has been placed under judicial investigation on suspicion of embezzling state funds, denies any wrongdoing and says it was a real job. But he has plunged far behind centrist Emmanuel Macron and far-rightist Marine Le Pen in opinion polls. "Of course it's a handicap for his campaign," said de Castries, an HSBC board member and the former boss of insurer Axa, who is both a close friend of Fillon and an adviser in his campaign. "But everything is still to play for in this election," de Castries said. "Despite this tsunami he still retains a solid base of about 20 percent (in opinion polls). There is an extraordinarily high number of undecided voters, people who might hesitate to vote for him but don't vote for the others." Opinion polls forecast that Macron will win the election but show a record number of undecided voters - around 40 percent - that make the ballot unpredictable. Fillon won the centre-right primaries in November despite lagging in the polls for months beforehand. "He must keep winning back people who would naturally have voted for him but had a doubt," de Castries said in a joint interview with Reuters and a group of European newspapers. If elected in May, Fillon would overhaul French labour, pension and tax laws within three months, to have the whole package approved before Germany's parliamentary elections in September, said de Castries, who took part in drafting Fillon's campaign manifesto and has been touted as a possible minister but has no official role in the campaign team. The first prerequisite to consolidate the euro zone and convince Germany of the merit of pro-growth policies in Europe is for France to enact long-delayed reforms, he said. "France's credibility in Germany is extremely weak today because it always promises reforms it does not enact ... Fillon would do those reforms in the first three months." While analysts have cast doubt on Fillon's capacity to push through deep spending cuts if elected because of the cloud cast by the scandal, de Castries brushed that argument aside, saying that Fillon was not one to bow down to street protests. The only positive aspect of the scandal, he said, was that "it has shown everybody that he is absolutely resilient and determined". (Reporting by Ingrid Melander; Editing by Mark Trevelyan)