As M. Germain, the teacher (Fabrice Luchini), reads more, he goads the student into writing more about the developing relationship, ostensibly for educational purposes. Voyeurism, the hidden observer, seems to drive the teacher's needs.
M. Germain's wife (Kristin Scott Thomas), with troubles of her own (an ominous but hilarious set of twins, who own the gallery she runs) is privy to Claude's writing. This adds a dimension to the voyeurism as something second hand. The cleverness of the point of view of the teacher becomes acute when he appears in scenes with Claude and Rapha's family, goading Claude on to write and take action in order to write about it after. The audience has to decide which is reality or primary story, and which is the story within the story, which is pure invention, which drives the narrative. This is a story about storytelling.
Even as I found the character of M. G. repugnant, he was also fascinating (and familiar) and had some very good lines. But what drives the film is a remarkable performance by Ernst Umhauer who plays Claude. His face, at turns angelic, lustful, grasping, and blank, is perfect for the part.