WHEN Fran,cois Mitterrand was elected in May 1981 as France's first left-wing president in more than a quarter century, Parisians popped bottles of champagne, danced in the streets, and shouted ``Mitterrand, Mitterrand.'' Promising a more egalitarian society, the new president proceeded to nationalize major industries, slap a stiff tax on the rich - and worst of all in the eyes of American officials - appointed five communist ministers. But the Americans needn't have worried. This month Mitterrand marks 10 years in office as one of America's staunchest allies. He's sent French troops to fight alongside GIs in the Gulf. He's also made it easier for American business to invest in France. Under Mitterrand, the ostensibly ``Socialist'' France has become a free-market success story. The franc is solid, inflation has plunged - and there's not a communist minister in sight.
Mitterrand's transformation shows how France, and to a large extent the rest of Europe, has softened its sharp ideological edges. Ever since the French Revolution gave the world the terms ``right'' and ``left,'' European politics has been polarized. The right wing represented the bourgeoisie's demands for free trade and free markets. The left wing demanded working-class rights and social justice.
Mitterrand's great achievement has been to end this divisive political warfare, reconcile France with capitalism, and construct a political system marked by American-style pragmatism. The communists have been reduced to a small, irrelevant rump force. Often it's even hard to see any difference between the so-called ``right'' and ``left.''
The French president may not be as outspoken as Margaret Thatcher, but he has outlasted the Iron Lady, and arguably outdone her in shaping public opinion. When early left-wing economic experiments flopped, Mitterrand took the capitalist path. The result? In 1988, voters swept him back to power with a strong majority. Three years later, Mitterrand's support is still there.
To be sure, not everything is rosy. The collapse of East European communism, and Germany's reunification, may have been great victories for the West, but for France they pose serious questions of whether this country can guard its position at the forefront of European affairs. Many ask, is a 74-year old grandfather up to this daunting job?
Another stinging question is, what happened to socialism? Mitterrand promised justice for all, yet the welfare system is strapped for cash and benefits are being cut. Almost 10 percent of the population is unemployed, and the aging industrial north is falling far behind booming Paris and the south.
Only a few subway stops from the president's Elysee Palace, a time bomb is ticking away in immigrant neighborhoods. More than 3 million Arabs, mostly from former African colonies, live in France, and many French aren't comfortable with them.
Jean-Marie Le Pen heads the far-right National Front. His grab-bag of anti-immigrant policies, dramatized in rallies that play on increasingly open racist sentiments, have brought him from the margins to the center of French politics.
For most Frenchmen, however, this is a happy time. A decade into Mitterrand's presidency, France isn't just about perfume, flowers, and luxury fashions. It has become a world leader in technology, strong in transport and telecommunications.
Prosperity has allowed Mitterrand to create striking monuments - as by transforming the centuries-old glory of the Louvre with a stunning and controversial glass pyramid. The president himself speaks in reassuring terms, like a gentle uncle - Tonton in French.
In the final four years of his term, Mitterrand looks forward to continuing to construct a ``united'' Europe. At the same time, he is ready to increase cooperation with NATO and build on his strong personal relations with President George Bush.
One day, Mitterrand may even be considered a great French leader on the scale of Napoleon. He has won a war over divisive, destructive politics and changed France's self-perception. Instead of a volatile, insecure power, France now is confident and secure. But as for socialism, it's just a distant memory.