FRANCE: Giscard Slips off Olympus

Diamonds and austerity lower the President's lofty standing

A girl's best friend can be a politician's worst enemy. Last week the French satirical weekly Le Canard Enchaîné charged that President Valéry Giscard d'Estaing, while serving as Finance Minister six years ago, had accepted a 30-carat tray of diamonds worth $240,000 from Jean-Bédel Bokassa, who was deposed as Emperor of the Central African Republic last month. There is no law prohibiting French politicians from accepting such largesse. The Elysée Palace, in fact, while trying to minimize what it called the "nature and value" of the gifts, did not deny that a "traditional exchange" had taken place. Bokassa also gave diamonds, the weekly said, to Cabinet Ministers Robert Galley and Yvon Bourges, and Giscard's top adviser, René Journiac. Other alleged recipients: Giscard's brother, Business Consultant Olivier, and two of their cousins, Banker François and Finance Official Jacques. Unlike the President, his relatives all denied the allegations.

Canard's attack could not have come at a more uncomfortable time for Giscard, reports TIME Paris Bureau Chief Henry Muller. It underscored the venomous tone that French politics is taking on as the 1981 presidential election approaches. The President's popularity as well as his much vaunted reputation as a fiscal wizard have both slumped badly. According to polls published by Paris' daily France-Soir, his approval rating has dropped nine percentage points since January, to 45%. His countrymen have become increasingly angry about the austere economic policies France has pursued since Giscard named Economist Raymond Barre as his Premier in August 1976.

Financial experts praise Barre for having stabilized the once wobbly franc and eliminated France's trade deficit. But the man in the street is more aware that unemployment has risen to 1.4 million, a record 6.4%* compared with 4.4% when Barre moved into the Premier's official residence, the Hôtel Matignon. Inflation, which he vowed to bring under control, has been running at an annual rate of 11.3%, vs. 9.7% in 1976. Barre has warned that the French face more, not less, belt tightening. Said he: "Next year will be very difficult. The choice is not between maintaining or increasing purchasing power, but between its maintenance and its amputation." Thanks in part to that kind of gloomy prognostication, Barre's approval rating has fallen even lower than Giscard's, to 28%.

Until recently, Giscard was able to stay regally above the political fray, letting Barre run the country on a day-to-day basis and, conveniently, leaving him to take the heat for unpopular decisions. But now, says Jeanne Labrousse, director of the polling institute I.F.O.P.: "We have reached the point where discontent is so high that Barre cannot absorb it all himself." According to Jacques Attali, a leading Socialist economist, the reason is that Giscard and Barre can no longer promise light at the end of the austerity tunnel. Says Attali: "The French are losing hope." According to a survey in the business magazine L'Expansion, three out of four Frenchmen now believe that the economic crisis will be "enduring" rather than "transitory."