Austerity in August

Two million Parisians went to the provinces and the beaches last week for the biggest annual paid vacation (three weeks) in the country's history, leaving a deserted Paris to the American tourists. But this year their government remained behind in the deserted capital, morosely counting up the consequences of France's "Fly Now--Pay Later" economic policy.

Sitting at the side of Premier Maurice Bourges-Maunoury, his friend and frequent tennis opponent, was the young man entrusted with saving France from economic folly. Handsome, lanky Felix Gaillard at 37 is France's youngest Finance Minister of the century. A man who comes from the cognac country, wears the Rosette of the Resistance, plays clean classic piano and dirty rock 'n' roll, Politician Gaillard is a man with a mission. For his colleagues he drew a lucid and gloomy picture.

Without Transfusions. In the past 18 months, said Gaillard, France has exhausted its $1.1 billion Stabilization Fund and run through its $500 million European Payments Union loan; the $300 million advanced a month ago from the Bank of France's precious gold reserves "will not last beyond the end of September." For the first time since World War II France can no longer count on generous transfusions ($5.5 billions in U.S. aid since 1945).

Domestically, the phony cost-of-living index, artfully manipulated to conceal the inflationary upcreep, has finally burst through its ceiling, setting off an automatic 5.5% minimum wage rise for 800,000 employees. With every allowance for crop failures, the cost of Suez and the price of Algeria's billion-franc-a-day war, said Gaillard, France's "fundamental" trouble is that "for several years our internal consumption has been rising more rapidly than our production."

Gaillard urged a 5% tax boost on "unessential goods," from furs and motorcycles to radios and yachts. He wanted a reduction in state subsidies, which would probably result in a 10% rise in rail and subway fares and gas bills. And he demanded a 600 billion-franc ($1.7 billion) slash in government spending. "These measures may look severe to you," concluded Gaillard, "but they are barely sufficient." Even with these measures Gaillard was budgeting for a $2.3 billion deficit this year.

Weekend Whack. No minister wanted to cut his own department much. Complained Labor Minister Albert Gazier, a Socialist: "I don't want to be known as Minister of Unemployment." Snapped Gaillard: "And I don't want to be remembered as Minister of Bankruptcy."

Unable to have his way, Gaillard offered his resignation to President Coty, who had to put off his own holiday departure for the French Alps. For the final session at Bourges-Maunoury's house in suburban Saint Germain, ex-Premier Guy Mollet was brought in to swing his Socialists into line. Then the Premier announced to the waiting reporters that 550 billion francs had been whacked off the estimates; over the weekend technicians would try to slice off the remaining 50 billion to satisfy Gaillard. The youngest Finance Minister promised to make his resignation "conditional," i.e., staying on if his full program went through. Otherwise his resignation would probably bring down the government.

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