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The Future for France

THIS spring finds political Paris in an ambivalent, almost schizophrenic mood. Gone is the lusty self-confidence of last summer, when the dramatic commemorations of the 200th anniversary of the Revolution were played out against a background of 30 years of French economic and political stability. As President Fran,cois Mitterrand greeted the leaders of the seven largest industrial economies, along with their poorer third-world counterparts, the French took justifiable pride in their role as a kind of North-South link. An unusually large military parade on July 14 also provided the watching world with a not-so-subtle reminder that France is the world's third nuclear power.

This spring, though, finds official Paris watching nervously across the Rhine, as the world's attention has shifted toward an increasingly united Germany. The French believe that all of the media palaver, notably in the Anglo-Saxon press, about a united Germany exercising total domination over Europe is overdone. Still, there is unease in Paris when people read phrases from American columnists such as ``Germany and its satellites,'' lest such notions become self-fulfilling prophecies.

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If the old Paris-Bonn axis is unlikely ever again to be what it was, now that Germany has regained its self-confidence, it is not clear where France will find an ally to provide a counterweight to Germany. In fact, a combination of France and Britain or France and Italy would have greater economic weight than a united Germany. But closer relations with Britain will have to await the post-Thatcher era, while Rome seems unable to have a long-term government, much less a long-term policy.

So this is a time of great debate in Paris, as both the socialist government and rightist opposition scramble to find policies adapted to new European realities. One indication of this came in the recent Key Largo summit between Mitterrand and President Bush, when the French leader gave support to defining a new role for NATO, and tacitly, for continued American troops in Europe. There has been talk of France rejoining the NATO integrated military command, though the idea is more popular with the other NATO allies than in Paris. As one high official of the Quai d'Orsay said recently, ``Now would be a foolish time to abandon the freedom of maneuver our independence vis-`a-vis the integrated military command gives us.''

Yet if there is a certain underlying apprehension in the red-carpeted corridors of government ministries, Paris in the past few weeks has been seized by a wave of quiet confidence. The realization is beginning to sink in that German reunification will not create a giant among pygmies. The cost of absorbing the East German economy - and of repairing a landscape among the most environmentally blighted in the world - will be immense. Besides, France will still be larger territorially than Germany, and - some demographers project - more populous in about 30 years.

In economic terms, the French have reached a point where they need no longer look enviously across the Rhine at their neighbor's performance. This year, for the first time since 1970, French economic growth (3.2 percent) will be higher and French inflation (2.5 percent) lower than the Organization of Economic Cooperation and Development (OECD) average. Industrial investment has been increasing 10 percent a year for the past three years, and this year will increase even more. Nine-percent Unemployment remains a black spot, but is declining, and the balance-of-payments deficit is likely to reach equilibrium in three years.

In fact, the OECD recently published a report that heaped praise on the socialist government's management of the economy, while the Paris Bourse has been Europe's stock-market star this year. Symbolic of a French inflation rate now equal to Germany's, the Banque de France was able to lower interest rates recently, while Bonn's remained unchanged - which would have been unthinkable a few years ago.

Yet all of this it too tentative to guarantee that France's future will be written in the governing party's favorite color - rose. In the early 1970s, for instance, many economists were similarly hopeful about France's economic future, only to have two oil shocks and expedient political management shake the country's confidence. But, as one Finance Ministry official commented, ``All the cards are on the table now. We have the chance for solid growth and low inflation. It's up to us to play our hand intelligently.''

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