Chirac sows the seeds of a French economic revolution

By , Special to The Christian Science Monitor

Prime Minister Jacques Chirac has moved to please the free-market-minded French. In a major speech yesterday opening the National Assembly, the new, conservative prime minister announced that he would proceed with plans to privatize state-owned banks and industries, lower corporate taxes, and make it easier for companies to fire workers. The measures follow on the heels of the devaluation of the franc and the liberalization of currency controls earlier this week. ``The French have understood the dangers of state-control, and they want no more of it,'' Mr. Chirac explained.

Such words amount to a revolution in France, which traditionally has been the most centralized of Western countries. When Chirac was prime minister from 1974-1976, he favored the aggressive state intervention he now says he deplores.

Yet that background, combined with present economic and political realities, leave many in France wondering how far Chirac will be able to go. Chirac has removed many price and exchange controls, but backed away from a complete liberalization as being too inflationary. Fierce resistance from trade unions forced him to back away from ending all controls over layoffs. Only companies with fewer than 100 employees will be given the right to fire workers without government approval.

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Politics also limit Chirac's room for maneuver. He shares power with Socialist President Fran,cois Mitterrand, who has said he plans to veto any moves he finds too sweeping. Denationalization may be the first battle ground.

In a statement released Tuesday, Mitterrand said he would not let any state company be sold that had been nationalized before the Socialists came to power in 1982. Chirac's list included several such companies.

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