Mitterrand ends spendthrift ways of headier days

For the French, it could be au revoir to a summer trip abroad. For France, it may be an end to the Socialists' dreams. President Francois Mitterrand's tough belt-tightening steps, proposed Friday and expected to be passed by the National Assembly in April, spell out a future of austerity for the economically troubled nation.

He asked for an 8 percent hike on the price of train tickets, for instance. And any French citizen leaving the country would be allowed to spend only $275.

In all, 10 measures, which include increased taxes, forced savings, and cutbacks in government spending, are designed - along with the recent devaluation of the franc - to bring France into line with its European partners by reducing its intractable inflation and trade deficit.

Most analysts here say Mr. Mitterrand is holding his breath and hoping for a strong recovery in the American economy to help boost French performance.

In the meantime, President Mitterrand will have to deal with the more leftist members of his Socialist Party. He has turned his back on their request that France block imports to help French industry recover from a recession and to adjust to new world markets.

The new steps would relegate the heady spending policies of the Socialists' first year in power to the scrapbook.

France's inflation rate is about six points higher than those of its main trading partners, and it is running a staggering $13.5 billion annual trade deficit, $5.5 billion alone with West Germany.

Before the March 21 realignment of European currencies, Mitterrand had been forced to devalue the franc twice in a year and a half. Despite measures taken last June to curb the government's free-spending ways, inflation soared again to a double-digit annual rate this year and the trade deficit did not improve.

The logic behind the new program is simple: By curbing consumer demand, fewer imports will be bought, and prices will not rise as fast since less money will be chasing the same amount of goods. In addition to the price of train tickets, gas and electricity prices will also rise 8 percent. The use of credit cards abroad will be banned.

The other half of the program - cutting government spending by nearly $3 billion and reducing the planned increase in the nation's 1983 money supply from 10 to 9 percent - will have the same effect. Other steps to reduce inflation include a 1 percent surcharge on 1982 taxable income, and a 10 percent levy on the income of all but the very poorest French. The money taken in through the 10 percent tax will be reimbursed, Mitterrand states, in effect borrowing the money as a way of forcing the French to save.

Finance Ministry officials said the measures should bring France's inflation rate down from 10 percent to around 8 percent this year and to 4 or 5 percent in 1984. They added that the trade deficit should come down to below $3 billion in 1983 and disappear in 1984.

Economists and bankers here say these might be overly optimistic goals, but that the program will make good headway on solving these two economic trouble areas. Finance Ministry official admitted that the economic growth this year would drop from the originally projected 1-to-1.5 percent to zero-to-0.5 percent.

Reaction to the austerity measures from Mr. Mitterrand's supporters was one of shock. ''Hard,'' blared a banner headline covering three-quarters of the front page of the leftist daily Liberation. ''An electroshock,'' moaned a commentator on government-owned television.

The conservative opposition expressed great dismay, arguing that all French citizens were now being asked to pay dearly for the Socialists' errors. The national employers' association was equally upset. ''We're still waiting for measures to help corporations,'' said Yvon Gattaz, leader of the Conseil National du Patronat Francais.

Despite all the discontent, however, Mr. Mitterrand will probably be able to proceed smoothly with his tough program. Since the Socialists control the National Assembly, few expect the package to encounter much difficulty when it is presented to the legislators April 6.

The unions could attempt to sabotage the plan, but their initial reaction hinted a grudging acceptance. The biggest union, the communist-led Confederation Generale du Travail, has little choice but to swallow hard and accept, since the Communist Party itself has had to buy the program to stay in the government.

Only the minority radical wing of the Socialist Party seems intractably opposed. Its leader, Jean-Pierre Chevenement, had argued for more state intervention in industry backed up, if necessary, by protectionist measures. But Mr. Chevenement left the government last week after it was clear the President had rejected his advice. While he does not have enough power to stop implementation of the austerity program, he could still wreak havoc within the Socialist Party itself.

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