Coping with an Old Foe

The joke in Paris was that Charles de Gaulle did not know bifteck prices were going up until his wife, Tante Yvonne, told him. Wherever De Gaulle got the news about French inflation, he moved swiftly last week to bring it under control.

Inflation is as typically French as are street demonstrations--and often the two are linked. All French governments tend to grapple vainly with the problem. Premier Paul Ramadier fought a game but losing battle in 1947; Premier Antoine Pinay launched a "Save the Franc" campaign in 1952. Now De Gaulle is struggling against the same hydraheaded enemy: rising prices, up 16% in three years; wage boosts, which only increase the cost spiral; and the fury of farmers.

In an unusual move, De Gaulle summoned his Cabinet during the vacation month of August, and sourly noted that without economic and financial stability France could not have the glorious "policy consistent with her interests." Premier Georges Pompidou, an ex-banker, candidly said that all Frenchmen were jiggling tax returns a bit in their own favor, lamented that "while an American always wants to demonstrate that he earns more than his neighbor, the Frenchman always wants to show you he earns less."

Credit restrictions and budgetary measures highlighted the new corrective plan announced by the government last week. Banks are limited to a 10% increase in loan portfolios. Installment buying has been tightened by increasing down payments.

In a nationwide TV speech, Finance Minister Valery Giscard d'Estaing said the success of the plan depends "on two things: conscience and confidence." The press was neither hostile nor enthusiastic. As usual, Charles de Gaulle had the last word. To his Cabinet he said, "If this doesn't do it, we'll go still farther."

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