WORLD

French face-lift

The Socialists begin an economic overhaul

Marci McDonald September 28 1981
WORLD

French face-lift

The Socialists begin an economic overhaul

Marci McDonald September 28 1981

French face-lift

WORLD

The Socialists begin an economic overhaul

Marci McDonald

French Prime Minister Pierre Mauroy once warned that “in 100 days socialism cannot change the ideology and culture of 100 years of capitalism.” Perhaps not. But Mauroy seems to have thrown himself into the task of disproving that disclaimer. Last week, as his fellow countrymen straggled back from their annual vacation binge, comparing tans and traffic jams, the burly onetime technical schoolteacher was completing a blitz of the National Assembly. The aim of his salvos of highly charged legislation: to remold the face of France radically over the next decade.

In the most striking economic overhaul since the Second World War—and with the still-squabbling opposition off guard—Mauroy has silenced those skeptics who scoffed at President François Mitterrand’s pledge to keep all his election promises. The first phase of Mauroy’s nationalization bill, due for cabinet blessing this week, sweeps into the state’s embrace five major industrial groups that dominate the electronic and chemical fields; takes a 51per-cent interest in the two arms giants, Dassault and Matra; and scoops up 36 private banks, giving the government effective control of 95 per cent of all deposits. The next phase, swallowing the local enterprises of three multina-

tionals, including ITT-France, will come as soon as negotiations with foreign shareholders are completed.

To bolster this drastic turnabout, Mauroy has instituted tax reforms that home in on the expense account perks of the executive suite and on the staggering privileges enjoyed by les grandes fortunes—the 400 families who, despite successive revolutions, have maintained their grip on the country’s wealth. Last week, with controversial bills on decentralization and the abolition of the guillotine (which 62 per cent of Frenchmen still favor) before the National Assembly, Mauroy launched an assault on the government’s most cherished priority— cutting back the mushrooming host of 1,840,000 unemployed. In an emotional lVk-hour policy speech, which called to mind Franklin Delano Roosevelt’s New Deal liberalism, he unfurled his sweeping plans. Mauroy pledged 61,000 new civil service jobs, a massive public works corps for unemployed youth, a cutback in the workweek to 35 hours by 1985 and a reduction in the retirement age to 60 from 65.

The model was profoundly socialist. But it will be socialism with a highly entrepreneurial mix. Included in the Mauroy package are $100 million in credits for companies creating new jobs, tax incentives and a series of steps to “debureaucratize” controls. The socialists have realized that they cannot

carry out their economic vision without business support, and so determined has been the government’s courtship lately that one French editorialist christened it a “charm offensive.” To Mauroy it has simply been a matter of convincing the pinstripe set that the Left can give it what the Right could not: “A social climate of negotiation instead of confrontation, and a system of planning that can provide guidance.” That philosophical mix marks what Mitterrand has defined as “socialism à la Française.” This starts from the premise that economic policies cannot succeed if cold budgetary statistics are allowed to triumph at the expense of thousands of human lives. Says a Mauroy aide: “What haunts him is not the numbers and percentages, but the strangulation of personality.” The deci-

sion to tackle unemployment and damn the budget deficit, at a time when every other major Western government is doing the reverse, is a defiant gamble. A study by Chase Econometrics predicts that efforts to reflate to a three-percent growth rate by next year may in fact succeed—though in the long term inflation and the increased trade shortfall that result will provoke a recession of the sort suffered lately by Sweden.

However, this summer’s British riots and the growing disenchantment with Reaganomics have done nothing to discourage Mitterrand, and opposition legislators have done even less. Still trying to accustom themselves to being out of power, they dared no more last week than an easily defeated censure motion. Even the doughty 89-year-old Marcel Dassault, whose conglomerate and crack Mirage fighter jet is due to be sucked under the state’s wing, mustered a wan smile of resignation. He had already been nationalized once and anyway, he allowed, he could not find

an adequate successor to himself.

If the opposition so far has been weak, however, it doesn’t by any means signify that most Frenchmen have been won over. A poll last week by the rightwing daily Le Figaro showed a six-point drop in Mitterrand’s popularity rate and a three-point slide in Mauroy’s. But perhaps the most eloquent footnote to the socialists’ first 100 days—the anniversary falls on Sept. 29—came from a Paris developer: he announced plans to build a new French quarter in Johannesburg to accommodate those countrymen who are currently fleeing to the capitalist haven of South Africa. 0