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Spy Case Reveals New Twist In French Resistance to US

FRANCE'S spy scandal this week, over which five Americans are being asked to leave the country, came at a perfect time for French Prime Minister Edouard Balladur.

Earlier in the week, the government of Mr. Balladur - who has been a front-runner in the presidential campaign - was blasted by the Paris press for authorizing illegal wiretaps related to a politically charged investigation.

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But by midweek, the bold type shifted to allegations that the five Americans, four of them diplomats, had engaged in political and economic spying.

The charges shocked United States diplomats, who insist that such matters are resolved quietly among friends.

US officials charged that allegations in the French press were unwarranted. ``The handling of this matter in France is inconsistent with the approach that allies have taken to resolve sensitive matters in the past,'' said Christine Shelly, acting spokeswoman for the US Department of State in a statement on Wednesday.

French Foreign Minister Alain Juppe yesterday sought to smooth ruffled US feathers by saying that it had made only a ``recommendation'' that the alleged spies leave the country, and that France had never intended to make the issue public. He also called for an investigation into the leaks.

According to the daily Le Monde, which first published the charges on Wednesday, five agents with the US Central Intelligence Agency tried to recruit French officials to provide information on France's strategy in the 1993 negotiations over the General Agreement on Tariffs and Trade.

During those negotiations, France and the US clashed over the issue of agricultural subsidies and US dominance in Europe's film and television markets. CIA officials also allegedly approached French officials working on key dossiers in the telecommunications and audiovisual industries.

These unusually public charges come on the eve of a sensitive meeting of the Group of Seven industrial nations on regulating the computer and telecommunications industries.

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France, long the most assertive nation in the European Union in resisting US culture, is urging the EU to take a stronger stand against US influence in emerging multimedia industries.

The French Interior Ministry insists that US Ambassador Pamela Harriman had been ``clearly warned'' that the five agents involved must be immediately sent home. ``We made these demands discreetly, weeks before the story broke in the press. But the ambassador refused, and nothing was done,'' said a spokesman for the Interior Ministry yesterday.

France and the US have clashed over espionage before. In the spring of 1993, the CIA warned 49 US defense, aerospace, and high-technology companies they were targeted by French intelligence.

With the cold war over, US intelligence services have shifted away from targeting military and political secrets from an opposing superpower. The rise of strong competitors such as Japan and the opening up of economic borders has made it more important for the US to keep up with the technology of its trading partners.

But much of the discussion in the French capital has focused on political motivations for the leak to the press.

``The issue isn't whether spying is going on,'' says political analyst Philippe Moreau Defarges of the French Institute of International Relations. ``The issue is why it's revealed now and with so much noise. It seems to me it's because the government has political difficulties and wants to deflect attention away from them.''

The ``political difficulties,'' not limited to the wiretapping scandal, have shaken Balladur's campaign for the presidency.

The French government's illegal wiretaps were related to an investigation of kickbacks on public housing contracts that were allegedly used to finance political campaigns in the Rally for the Republic party, of which both the prime minister and Interior Minister Charles Pasqua are members.

Mr. Defarges is hopeful that the international fallout will be limited. ``If the Americans do not overreact, it will be of no importance,'' he says.

``What this affair is really about is a problem of domestic politics,'' said a longtime adviser to Socialist President Francois Mitterrand. ``The right needed to drive headlines about wiretaps and kickbacks off the front pages. They needed a diversion in their electoral campaign.''

``We've all heard such reports of spying before,'' he added. ``Within the American intelligence service there are some extremely capable and well-informed people. There are others who are not up to their jobs. But what's astonishing is how this affair was managed. It's put US and French relations into question.''

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