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Socialists hope economic gains will pay dividends at the polls

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When Jacques Dubost starts his car in the morning these days, he smiles. Last year it cost him 75 francs ($11) to drive the 93 miles from his home here to his office in the Bresse. Today, thanks to falling gas prices, it costs him 60 francs ($9). ``The economy is getting better,'' Mr. Dubost says. ``I'll be able to go skiing a lot more.''

France's ruling Socialists are fighting an uphill battle in the campaign for Sunday's legislative elections. They're expected to lose their parliamentary majority to a coalition of conservative parties.

Still, the Socialists are actively campaigning, largely on the strength of the economic improvements. Lower oil prices and the decline of the American dollar are promoting faster economic growth, holding down inflation, and helping balance the country's foreign trade.

The Socialists' success also signals a change in the electoral debate over the economy. Almost everyone now agrees that neither anticapitalism nor state controls, but free enterprise is the best system. The argument centers on what degree of free enterprise is best.

``The Socialists have legitimized business,'' says Jean Chemin, Director of the Lyon Chamber of Commerce. ``They have made profit, private savings, and work flexibility respectable.''

What a change. When Socialist President Fran,cois Mitterrand came to power in 1981, he tried to reflate the economy and implemented a wave of controversial reforms, including the nationalization of banks and industrial enterprises.

The rush for economic growth soon crashed. President Mitterrand clamped on austerity measures. These included increasing taxes and cutting state expenditures, and closing down ailing industries and laying off workers. Proposed pro-labor reforms were quietly shelved in favor of incentives for business. The link between pay increases and inflation was cut and most controls on prices were dropped.

As the economic outlook for many industrial countries has brightened, France's austerity measures have begun to pay off. Inflation has fallen from 13.5 percent in 1981 to 4.5 percent today. Economic growth is expected to rise this year by between 2.5 percent and 3 percent. And thanks to a falling oil bill the trade surplus could hit $7 billion. The only blot on the record is a high unemployment rate, which hovers at around 10 percent.

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