The devaluation of the French franc and accompanying austerity measures announced this weekend show how limited the Socialists' room for maneuver is to pursue a policy of expanding jobs in a belt-tightening world.
In a realignment of currencies within the European monetary system June 12, the franc's value was reduced by 10 percent in relation to the German mark and the Dutch guilder.
The next day, Prime Minister Pierre Mauroy clamped on wage and price controls for four months and pledged to hold the budget deficit to 107 billion francs or 3 percent of gross national product.
The measures are designed to bring down France's current 14 percent inflation rate to less than 10 percent, Mr. Mauroy said. As such, they represent a redirection of policy for the governing Socialists.
Until now, France has been the only industrialized nation that has given the fight against unemployment priority over inflation. With these actions, Mr. Mauroy signaled that the battle to reduce prices has become as important to the Socialists as decreasing unemployment.
''In our fight against inflation, we are increasing the speed of our effort to reduce the gap which separates us from 'our partners,' '' Mr. Mauroy said.
As Mr. Mauroy's remarks indicate, the Socialists do not plan to completely reverse the course of their expansionist policies. President Mitterrand stressed this point last week in his second news conference in 15 months in office.
''It is not worth cutting inflation by a point if it means losing another 100 ,000 jobs,'' he said. ''Nothing is more inflationary than unemployment.''
In practical terms, this means investment will be favored over consumption. Mr. Mauroy said the government would cut its spending and increase social charges to balance the large deficits in the social security and unemployment benefits program. But he added that public investment designed to create jobs would remain untouched.
At his press conference President Mitterrand had announced that the nationalized companies will be required to expand their investments by about $4 billion adding there would also be new investments in public works and housing.
Still, the gap between France's double-digit inflation and the single-digit inflation in most of the rest of the industrialized world forced the new emphasis on the inflation fight. The differential makes French products costlier internationally, worsening the country's trade deficit and putting tremendous pressure on the franc.
The franc has been under attack since the Socialists took power a year ago in May and announced their intention to stimulate France's economy. Last week, under a new wave of speculation, it dropped to 6.35 against the dollar, a record low.
Similarly, expanding the economy produced a spurt of imports to satisfy increased consumer demand, and the country's trade deficit deteriorated. The deficit for April was 10.16 billion francs, the worst monthly figure since 1968.
Because of the pressure on the franc and the worsening of the trade deficit, most commentators here viewed the devaluation, France's second within a year, as inevitable. By increasing the cost of imports, a devaluation gives the currency breathing space and reduces trade deficit.
But Mr. Mitterrand would have liked to have put off the devaluation and austerity measures until after next spring's important municipal elections. ''It's true, we didn't want to do this so quickly,'' admitted Denise Mairey, a Finance Ministry official.
Mr. Mitterrand also did not have much room for maneuver in executing the devaluation. For the opposition two devaluations within a year is proof that the Socialists are ruining France's currency.
Speaking at his party conference former President Valery Giscard d'Estaing called the devaluation ''saddening because it costs France and shocking because it reveals how France's economics are run.''
And on Mr. Mitterrand's left, the necessary austerity to make the devaluation stick was criticized because it will probably hurt the worker's pocketbook.
Still, the majority of the Socialist Party seemed reconciled to the devaluation and accompanying austerity. Radicals such as Paul Quiles, national secretary of the Socialist Party, also approved of the wage and price freeze.