De Gaulle & Business

France's economy has benefited immensely in recent years from two simultaneous developments: the rise to power of Charles de Gaulle and the establishment of the six-nation Common Market in 1958. Since De Gaulle became President, he has helped make the franc a solid, stable currency for the first time in half a century, and the economy has mostly boomed. Since the Common Market was started, France's industrial exports to the other five members have tripled, and its farm exports have almost quadrupled. But when these two forces come into conflict--De Gaulle is obviously trying to undermine the Common Market--which one do French businessmen support? As of last week, most of them were nettled at the Gaullist economic policies.

Willing to Compete. The strongest stand against De Gaulle's uncommon policy comes from those who have most to gain from European union: France's farmers. Though De Gaulle purports to be pressuring the Market for a better deal for his farmers, many French agricultural leaders suspect that he is just using that as an excuse to curb the supranational features of the Common Market. The Market's Eurocrats last June offered to adopt a policy worth billions of dollars to French farmers, providing that De Gaulle acquiesced in greater powers for the Eurocrats, but he turned them down cold. Says Jean Deleau, vice president of the National Federation of Farmers' Syndicates: "Belonging to the European community is a matter of life or death for our agriculture."

As for the business community, protectionism still tends to be the cozy code of the owners of small, family-held firms; they fear competition from across the border and would prefer their old cartels to Common Market tariff cuts. But the leaders of the great corporations believe that they can compete well against their foreign counterparts and like the prospect of selling more to Germans or Italians. In the business magazine Entreprise, 20 of France's most prominent executives--including Pechiney's Chairman Raoul de Vitry, Rhone-Poulenc's Chairman Wilfred Baumgartner and T.S.F.'s (electronics) Chairman Maurice Ponte--came out in support of the market. In a speech opening Marseille's international trade fair last week, Emile Roche, a leading banker and industrialist, said: "Our economy deserves to be told, clearly and categorically, whether we are continuing the European movement or whether, for pretended independence, we are returning to the poison of protectionism."

Power of the Purse. French businessmen are upset about something else: the recent economic stagnation resulting from De Gaulle's anti-inflationary program. The French economy is growing only half as fast as last year--2.6% v. 5.3%. A government freeze on industrial prices and a clampdown on credit has held back private investment. Complains Georges Villiers, president of the Patronat, French equivalent of the National Association of Manufacturers: "For a year now, the increase in private investment has been almost nil. The government is concerned about it, but has not yet taken adequate measures." What businessmen want is for the government either to lift the freeze on prices or to put a stronger freeze on wages; either one would provide them with more money to invest.

To critics of France's internal economy, Finance Minister Valery Giscard d'Estaing announced last week that the government plans to liberalize credits in order to spur investment and exports. That will do much to quiet De Gaulle's business foes. Criticism will also be tempered by French businessmen's acute awareness that they operate in a controlled economy in which the government has enormous power of the purse. As if to emphasize the point, Giscard also said that the government will raise $200 million that it will lend to "selected" industries.

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