Socialists Bring France Prosperity
WHAT a difference a decade makes. When French Socialists were elected to power nine years ago, French and international economic analysts and business leaders were morose, even cataclysmic, about prospects for the French economy.
Today the Socialists, led by President Fran,cois Mitterrand and Prime Minister Michel Rocard, are still running the show here, but the dire prognostics have turned into glowing reviews. Gone are the threats to pull up stakes from what was feared would become an anti-business economic climate. Instead there is growing interest in what is increasingly viewed as a profitable, in some respects inexpensive, and - for Europe - safe marketplace.
In the midst of a turbulent Europe, it is now France that displays an attractive stability - in its currency, prices, and politics.
The Paris stock market has become the darling of Europe this spring, gaining as much as 5 percent some weeks, with gains passing up Frankfurt. Job creation continues to be impressive. And the office market is booming, with international investors finding Paris a bargain compared with London, New York, or Tokyo.
``This hasn't happened overnight. It's been building on generally stable government policy,'' says J. Paul Horne, an international economist with Smith, Barney here. After starting out in 1981 with an economic policy of nationalizations, public-sector job creation, and indexed wage hikes that virtually everyone now disavows, Mr. Mitterrand switched course in 1983.
The fruits of a stable seven-year economic course are what's behind ``a certain shift toward the French economy,'' adds Mr. Horne. It should be accentuated by concerns next door over inflation and higher interest rates that are expected to accompany German monetary union, he says.
France's latest impressive report card comes from the Organization for Economic Cooperation and Development (OECD), which in a recent economic survey said France had ``surpassed expectations'' on many economic fronts.
Awarding kudos to the country's ``stable and coherent'' economic policies, the report said France could outperform the OECD 24-nation average for both growth and inflation in 1990. Noting that the French economy has surpassed most international forecasts over the past two years, the OECD predicted a 3.1 percent growth rate this year, and 2.8 percent in 1991.