France moves toward its own 'new deal' of social change

The spectacular surge by President Francois Mitterrand's Socialists to become the most important political force in France has ushered in a new era of moderate social experimentation.

The Socialists are at last confident that they will be provided with the necessary tools to carry out Mr. Mitterrannd's heralded "new deal" program. In the second and final June 21 legislative ballot, the new administration is expected to win an overwhelming center- left parliamentary majority.

In the 24-day interim period between Mitterrand's inauguration and the first legislative round June 14, France had a chance to taste his proposed social and economic reforms. Despite bitter conservative criticism, the fact some 55 percent of the French electorate chose to vote left shows that it liked what was offered.

Less than two weeks after taking office, France's first Socialist president in the 23-year history of the Fifth Republic introduced a popular 10 percent rise in the minimum wage as well as substantial increases in family, old age, and housing benefits.

This was followed seven days later by a pledge to create over 54,000 public sector jobs, financial assistance to both expanding and faltering private enterprises, and the introduction of a new supertax on high personal incomes, banks, and oil companies. And in the latest measures, the government proposed to help companies overcome the increased burden of social changes.

Throughout their election campaign, which dealt mainly with domestic rather than foreign issues, the Socialists made it quite clear that without a majority in the National Assembly the chances of ramming through such reforms were extremely limited and could easily provoke a government crisis.

EVen with a substantial electoral mandate, France's new center-left majority faces enormous economic difficulties. On the three previous occasions this century when the left came to power in France, disastrous financial problems caused each government to hand back control to the right in less than two years. Some conservative strategists are pointedly predicting a similar fate for the Mitterrand regime.

Since the end of April, when the Socialists burst forth with striking new gains in the first presidential ballot, France has been forced to spend almost one quarter ($5.4 billion) of its hard currency reserves in support of a sinking franc. Unemployment has continued to rise to nearly 1.8 million (7.6 percent) and inflation hovers at around 12 percent.

But it would be unfair to equate the present Socialist predicament with that of the political chaos which characterized the Third and Fourth Republics. Not only have France's political systems changed in favor of a more stable presidential form of government, but its economic problems are very much the same as other Western nations.

Foreign Minister Claude Cheysson recently criticized the US for exacerbating Europe's plight by maintaining high interest rates. Furthermore, the initial panic on the Paris stock exchange appears to have subsided now that Mitterrand is likely to benefit from a strong, Socialist-dominated parliament.

The French financial community however, remains unconvinced of Socialist remedies for relaunching the economy and reducing unemployment. Increased social charges, "collectivism," and the 35-hour working week, it believes, will only make French companies less competitive and cause further inflation.

The Socialists appear acutely aware of France's economic woes, yet are confident that their countermeasures will prove effective. It also remains up to Mitterrand to decide to what extent he is willing to push ahead with his reforms. He has repeatedly said that he does not feel bound to any electoral promises made by left- wing Socialists or Communists other than his own.

One outcome of the legislative elections which has greatly relieved businessmen is the radical drop in Communist parliamentary representation. For years, the Communists have prevented the Socialists from pursuing a moderate center- left policy; the Socialists now look as if they might emerge with an absolute majority without the Communists.

If this is indeed the case, the Socialists will not remain beholden to the Communists for support. But it still leaves Mitterrand's Socialist government with the dilemma: what to do with the Communists.

To deny them ministerial participation in a new postelection government would almost be certain to cause ill-feeling. Yet to immediately appoint one or two Communist ministers even in "nonsensitive" posts would cause emotional shock among many French. It would also upset trade partners such as the Arabs, who have threatened to withdraw their liquid assets from France, were the Communists ever to share power.

But some Socialists feel that bringing in Communist ministers might be one way of ensuring trade union peace. In any case, these Socialists argue, the Communists would not tolerate playing second fiddle for long and would eventually walk out. But then Mitterrand would have at least made the effort to include them.