France's Delors: former union official advocates economic austerity

Jacques Delors, France's minister of finance, economy, and budget, has a simple way of explaining the country's problems. ''We produce 100 units,'' he says, ''but we consume 105. What we must do is to cut consumption to 100.'' With a wry smile, he adds: ''And push production up to 105.''

Mr. Delors' success in getting that message across to the French will determine whether the Mitterrand administration manages to pull France out of its present economic problems.

The economic program adopted at the end of March aims to eliminate the $13 billion trade deficit and to cut inflation from 10 percent to 5 percent in two years. If it flops, Mr. Delors will bear the brunt of failure. If it succeeds, he will be a national hero.

Already, the reserved finance minister has taken on the aura of the most important member of the government below President Mitterrand. Although the poor state of the economy has been the cause of the troubles in France's socialist experiment for the past two years, Mr. Delors' investiture as the key minister has been a long time coming.

In the first government formed after the Socialists won power in 1981, the finance minister figured in only 17th place in the ministerial rankings. Last year, he argued for a pause in the hectic pace of Socialist reforms, to give the country time to catch its breath. Mr. Mitterrand declined to back him and the prime minister, Pierre Mauroy, insisted that there must be no letup.

At the start of 1983, Mr. Delors announced a cut in interest rates aimed at encouraging investment in industry. The snag was that this meant cutting interest paid on small savings accounts held through the state post office by millions of French people. With an eye on municipal elections held throughout the country in March, Mr. Mauroy again slapped his finance minister down, with the President's backing.

But the aftermath of the March local elections saw Mr. Delors finally coming into his own. The dramatic trade gap, growing international debts, and unrelenting inflation meant stern economic measures were needed once the elections were over.

One faction in the government insisted that clamping down on spending and imposing an austerity program would go against Socialist principles. They advocated retreating behind protectionist walls, dropping out of the European Monetary System (EMS) which links West European currencies, and further extending state control of private industry.

President Mitterrand listened to them with one ear, but Mr. Delors' pro-European, pro-free-trade, anti-increased-state-intervention voice won the day. It was a close call, involving a week of dramatic negotiations about the devaluation of the franc with other members of the EMS, particularly the powerful West Germans. Mr. Delors suddenly showed himself to be a first-rate international political player. He pushed the negotiations to the brink of failure and then emerged with a settlement that salvaged enough French pride to be politically acceptable.

Within a week, he was given No. 2 ranking in a reorganized French government. The new Cabinet approved a drastic austerity program that has put socialism on the shelf in France for the time being. Taxes have been increased, government spending is being cut. A forced loan is being raised, to be put into industrial investment. The government aims to cut consumer demand by $9 billion this year, slashing growth from the previous target of 2 percent to 0.5 percent or even lower.

And in a controversial move, the government restricted French holidaymakers to taking only $280 out of the country each year. To quiet the considerable public uproar, it said April 9 that many French tourists will be able to take package vacations abroad. Travel agents can pay hotels and transport services abroad with limited amounts of foreign currency, but restrictions on amounts citizens take out of the country remain in place.

The man in charge of all this is probably the most unusual top political figure in France. In a country where politics tends to be a lifetime career, the jazz-loving Mr. Delors cuts a distinctly independent figure. He spent the first 17 years of his working life in the central bank, the Banque de France. There he showed more interest in trade unionism than in party politics.

A practicing Roman Catholic, he developed a socially aware, humanistic philosophy in the 1950s and '60s in France's second biggest union group, the Confederation Francaise Democratique du Travail (CFDT). Although he is currently presiding over a cut in living standards which angered the CFDT and other unions , Mr. Delors maintains his long-term aims. But he saw that, given the state of France's economy, austerity had to come first.

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