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France: two hands on the tiller

FRENCH Premier Jacques Chirac's speech to the National Assembly last week gave some indication of what ``cohabitation'' in France -- power sharing between the Socialist President and the conservative premier and Parliament -- is going to be like. So far, Chirac has shown himself more decisive in pronouncements than in the details. His program represents a certain measure of reversal of the strong French tradition of dirigisme, or centralization, practiced by governments of the right and the left, going back at least to the days when Louis XIV gathered his nobles at Versailles to keep them from causing him trouble in their own fiefs.

Mr. Chirac confirmed plans to denationalize more than 50 banks and corporations, including some that had been state-owned before Socialist President Mitterrand's election in May 1981. Mr. Mitterrand had earlier promised to oppose privatization of companies nationalized before then, so Chirac's announcement represents an assertion of independence from the President. But Chirac failed to give much of a timetable for this denationalization -- and that illustrates his dependence on the President and inability to act as decisively as he might wish.

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Chirac's speech came in the wake of an effective 6 percent devaluation of the franc against other European currencies -- a move expected to win him points with the politically powerful French farmers and to make a dent in France's troublesomely high unemployment.

Chirac also outlined a number of incentives to stimulate business, such as provisions for flexible work schedules, profit-sharing and share-option plans, and tax breaks to employers hiring young job-seekers. But despite his assertions that ``the Socialist experiment has failed,'' it should be noted that while they held the majority in Parliament, the Socialists made a number of well-received moves toward financial deregulation, including provisions that made possible the development, virtually from scratch, of the French venture-capital industry.

A tendency toward the center seems to be a fact of politics for any ruling party. Just as the Socialists were not so leftist in office as they were expected to be, so the conservatives are proving not so conservative. The $2 billion national budget cuts promised earlier had become $1.34 billion by last Wednesday's speech.

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