FRANCE: Le New Deal

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¶ Liberalization of trade at home and abroad, to strip away masses of protectionist tariffs, duties and subsidies which have made French industry the most coddled in Western Europe. ¶ Agricultural reforms aimed at forcing the peasants to cut back production of uneconomic crops (e.g., wine, sugar beets for alcohol), and farm more efficiently. ¶ Overhaul of the maladministered cradle-to-grave social security program. <¶ An increase in real purchasing power, by linking wages to increased industrial profits. Inefficient plants must go to the wall; workers must be retrained and moved to new locations, especially in southern France where hydroelectric power makes business more attractive than in the worked-over, fought-over north.

Opening the Windows. What Mendès proposes to do, said his unofficial spokesman, the weekly Express, is to force "our national economy open to the great wind ... of foreign competition. To open wide the windows, and let those who do not have strong enough lungs to survive come to the state and be cared for."

Foreign economists cheered. But to many a French businessman raised in the hothouse atmosphere of protectionism and subsidy, Mendès' program seemed more like an invitation to pneumonia.

To the Premier's office Mendès called politicians, union men and bankers, explaining to them that "there will be things you don't like." Then he and Edgar Faure marched into the National Assembly.

Hand of Poker. More than 100 amend ments to the New Deal had already been submitted by special interests. The wine lobby, the distillers, the civil servants, the farmers—all had their champions popping up to defend their privileges. Wartime Premier Paul Reynaud, an old-fashioned financier, was alarmed. The plan, he said, is "as vague as it is irreproachable." "If I understand you correctly," Reynaud said, "your scenario is like this: you open the frontiers, and there is a massive invasion of foreign goods. There is a terrible shock, and you pick up the wounded at the expense of the state."

Reynaud's biggest worry was that the New Deal might cut military expenses to win economic gains. "For eight years you have been in opposition," he told Mendès-France, "and often you have made it plain that you would save money by reducing military expenditure. Are you betting the peace of the world on the good will of the Kremlin or on the defensive alliance of the Atlantic? I am among those who will not agree to gamble the survival of France on a hand of poker."

Question of Confidence. Stung, Mendès-France leaped up to reply. In the 1955 budget, cuts would have to be made in both military and civilian expenses, he said. But he promised "a rigorous defense" of the currency; to mollify the workers and peasants, he promised to lower the barriers to foreign competition "with the utmost prudence." But in the main lines of his program, and in his demand for full power, Mendès-France would not yield a centimeter. "The vote will be a question of confidence," he told the National Assembly, and in the prevailing atmosphere he was all but sure of getting his economic blank check.