The Battle for the Franc

As Mitterranomics fails, the French swallow bitter medicine

If there was ever a time when the French looked for a display of leadership, it was last week as President Francois Mitterrand addressed the country to explain the painful consequences of the French franc's third devaluation in 22 months of Socialist government. Speaking on nationwide television, Mitterrand faced a public also confused by a slow-motion Cabinet reshuffle in which, after days of hesitation and debate among his advisers, the President had anticlimactically reappointed Premier Pierre Mauroy, 54, to head a streamlined government composed of virtually the same faces. Considering the difficulty of his task, Mitterrand's rhetorical talents rose to the occasion. In an inspirational vein reminiscent of former President Charles de Gaulle, Mitterrand urged the French to be "mobilized without weakness and complacency in the service of France, even if it is difficult, and because it is difficult."

Difficulty was the recurring theme of the President's appeal. He acknowledged what he called "the expression of your worries" in the municipal of elections that had cost his Socialist-Communist coalition 30 major mayoralties only two weeks earlier. He conceded that the "realignment" of the franc added urgency to the question of whether his economic policies were "good for France." Not surprisingly, Mitterrand concluded that they were. Said he: "In several months over hard terrain we have achieved more social progress than France has seen in the past half-century." But, he said, the nation now had to struggle on three fronts—unemployment, inflation and the foreign-trade deficit. Asked the President: "Without you, what can we do?"

Two days later, Mitterrand's government announced a broad series of austerity measures. In addition to hefty cutbacks in government spending, they included a $285 limit on the amount of currency Frenchmen will be allowed to take abroad and a 1% income tax surcharge to help cover the $1.9 billion social security deficit. To many experts, the emphasis on "rigor" was strangely reminiscent of the policies of former President Valéry Giscard d'Estaing and his Premier, Raymond Barre, an approach that Mitterrand had harshly criticized during the 1981 presidential campaign.