SOME years ago in the salons of Paris one often heard it said that England is sinking in order, while France is rising in anarchy. Like all epigrams, this observation was a smooth cocktail of truth and exaggeration. But as a summary estimate of the present state of France, it is still not altogether inaccurate. For the supreme paradox in the current situation of the Fourth Republic is the evident contrast between the steadily rising wealth of its citizens and the anarchy of its politics.
The simplest way to appreciate this phenomenon is to watch how the chaos of French political life seems to have inundated the boulevards. Whether it is on the great, sycamore-lined avenues, across the broad, lamp-studded plain of the Place de la Concorde, or on the bridges that span the tranquil Seine, there is now a never-ending stream of cars, buses, trucks, and motor scooters.
Along the vast sidewalks of the Champs Elysées, once reserved for the unhurried ambling of pedestrians, cars now prowl in vigilant search of a parking place. Beneath the chestnut trees along the Avenue Gabriel, Citroens, Simcas, and Peugeots are parked two deep. And even along the left bank of the Seine, the quais, once the serene haunt of fishermen and lovers, have been transformed into a two-lane motorway. France’s capital is ceasing to be a city of strollers: it is turning into a city of motorists.
The metallic hustle and bustle of Paris streets provides noisy and tangible evidence of the remarkable industrial boom through which France has just been passing. This boom represented an industrial expansion in 1957 of 6 per cent in volume and 10 per cent in value.
The substantial advance in national production has been a legitimate source of French pride, but it has at the same time exacerbated France’s most persistent and seemingly incurable economic woe: its chronic shortage of foreign, and particularly dollar, exchange. The significant increase in internal consumption which has marked the last two or three years has forced the country to import raw materials faster than it could export finished products to pay for them.
For this chronic plight there are two principal reasons. The first has to do with the hitherto sluggish state of French exports. Until the recent 20 per cent devaluation of the franc, French export efforts were handicapped by production costs which priced most French goods out of the market. Fhe devaluation of the franc has put many French enterprises on a competitive footing once again.
The average French manufacturer has little interest in markets beyond the geographical limits of metropolitan France or the French Union. It is only lately that French manufacturers have begun to realize that they cannot hope to go on receiving foreign raw materials needed to keep their machines running and their workmen employed unless they can divert to foreign export markets a certain proportion of the articles they make.
Until recently the path of least resistance was simply to flood the home market. This easy approach reached its grotesque apogee under the benevolent stewardship of Paul Ramadier, who was finance minister in Guy Mollet’s government from February of 1956 to May of 1957. His answer to the problem of an ever-growing trade deficit was to launch the slogan “Buy French” — a slogan which evidently reflected his naïve belief that an article marked “Made in France” must have been manufactured with domestic raw materials.
The effect of devaluation
The devaluation of the franc which Felix Gaillard engineered last autumn has put an abrupt end to this policy by simultaneously making raw material imports more expensive and foreign markets more attractive. The price which the French have had to pay for this has been a leveling off in industrial production and a rise of about 9 per cent in the cost of living, which has been cushioned for workers by sliding-scale increases in wages. But the beneficial effects on France’s balance of payments arc already obvious. Between October and December France’s deficit within the European Payments Union dropped from $38.8 million to $20 million.
It still remains to be seen, however, how much of a real effort French manufacturers are prepared to make now that the rate of exchange has shifted in favor of exports. The effort will almost certainly have to be greater than that belatedly called for by Ramadier, who in March, 1957, got the five leading automobile companies of France together to form a “sacred union” pledged to devote two thirds of any increase in production to exports.
In fact, they seem to have developed a new awareness of their opportunities and responsibilities abroad. In 1957 the five companies succeeded in exporting 180,000 vehicles out of a total output of 840,000. This year they hope to do even better. To date, the most sensational advances in this field have been registered by the nationalized Renault company, which increased its sales in the United States from 3124 in 1956 to 30,781 in 1957. Its shining white hope for the American market is the neat little Dauphine which, with a more powerful motor, a lighter weight, and a more attractive silhouette, is beginning to look like a serious challenger to the Volkswagen.
Shortage of coal and oil
The other principal reason for France’s current trade crisis is its growing shortage of vital energygiving raw materials. The happy days are past when France, with coal from the Pas de Calais and the Cevennes, was virtually self-sufficient. Last year the French coal industry made a strenuous effort to raise coal production from 57 to 59 million tons — a rise of some 3 per cent and the only one recorded within the European Steel and Coal Community. Even so, France was forced to import 20 million tons, 7 million of which came from the United States, at a cost to the French Treasury of close to $100 million.
The other fuel on which France is increasingly dependent is petroleum, and here the shortage is even more drastic. From the oil wells sunk in the vicinity of the great natural gas deposits south of Bordeaux the French were able to extract some 1.5 million tons of petroleum last year. But to cover the rest of their needs they had to import over 23 million tons from abroad. In normal times — if such an expression can be used at all these days — 92 per cent of French oil imports come from the Middle East, and in particular from the Iraq Petroleum Company, in which the French Compagnie des Pétroles has almost a 24 per cent interest. A large part of these imports can be paid for in francs or sterling.
But 1957 was an abnormal year. With the blocking of the Suez Canal and the blowing up of several Iraq Petroleum Company pumping stations in Syria, France was obliged to turn to Aramco, Texas, and Venezuela for its oil. Sixty per cent of the oil furnished by Aramco and all of the oil coming from Texas and Venezuela had to be paid for in dollars, to the tune of about $300 million.
A French government pledged to heroic austerity might have tried to face this situation by imposing a drastic reduction in oil imports until the I.P.C. pipelines had been fully repaired. (They were repaired by last April after almost six months of complete stoppage.) But both Premier Guy Mollet and his successor, Bourgés-Maunoury, were heavily implicated in the Suez fiasco, and for questions of prestige alone they were loath to clamp a tourniquet on French imports of petroleum. Besides, any drastic reduction in oil imports would have necessitated a prolonged period of gasoline rationing at home, and rationing among a people of sharp-witted individualists like the French has never been a conspicuous success.
A severe cut in gasoline sales, furthermore, would have precipitated a marked drop in government revenue, since the tax on gasoline (now set at 300 per cent of the basic price) is one of the French Treasury’s most important sources of income. This is a luxury which a semi-solvent state can hardly afford, even though it engenders an economic vicious circle in which financial solvency at home can only be bought at the price of insolvency abroad.
The Monnet loan
Breaking out of this vicious circle was one of the major problems facing the Gaillard government when it came into office early last November. Something had to be done quickly to keep France financially and economically afloat at least for a few more months, by which time it was hoped that the remedial measures would have had time to bear full fruit. The way out of the impasse was found by Jean Monnet, who had no difficulty in persuading Gaillard to send him on an expedition to Washington to ask for one more loan.
The long-term calculations upon which the Monnet loan is based are fairly clear, even though the figures used to bolster the arguments in favor of it are subject to controversy. What the Gaillard government has been doing is to play for time; for that time, a good two years hence, when France will no longer be dependent on foreign fuel sources for its domestic power needs. To reach this economic promised land, the French have set out to harness the latent power of two great natural resources — the natural gas deposits of Lacq and the oil of the Sahara.
The natural gas deposits of Lacq, south of Bordeaux, which have been opened up recently are reputedly the greatest in the world — a trillion cubic meters. They are expected to transform the industrial situation of all southern and central France and to permit a drastic reduction in the amounts of coal that have so far been needed for the manufacture of industrial gas.
Literally thousands of newspaper and magazine articles have been devoted in recent months to describing the fabulous store of black gold which is said to be buried beneath the burning sands of North Africa. For many Frenchmen this precious liquid has made its miraculous appearance, like manna from heaven, just at a moment when the nation was most sorely pressed, and it has been seized upon as a universal panacea for all of France’s economic problems.
Those skeptics who used to talk disparagingly of the “Sahara myth” have recently changed their tune, and according to the latest and most optimistic estimates, the oil reserves of the Sahara may well amount to one billion tons — enough to satisfy French needs until 1975, by which time European atomic energy will have come into its own.
The problem of Algeria
Over these sanguine calculations there hangs, of course, one great question mark: the problem of Algeria. The intransigency of the Algerian National Liberation Front in holding out for full independence makes it as doubtful as ever that it will soon sue for peace. On the other hand, the momentary success which the French army has unquestionably scored in its campaign of “pacification” has made the French, particularly in the right wing and colon circles, more reluctant to enter into Serious negotiations with men who have been described in so many official communiqués as “traitors and bandits.” Meanwhile the endless war of attrition goes on.
Like its immediate predecessors, the Gaillard government made no attempt to initiate a bold new policy calculated to break the impasse created by the implacable opposition of two intransigent camps. But even if it had had the will, it is no longer certain that it could succeed in finding a just and equitable solution for a situation which seems to grow more hopeless with each passing month. The seizure of the Suez Canal Company and of other foreign assets in Egypt, the recent expropriation of Dutch properties in Indonesia, the raids of Moroccan irregulars into Spanish territories, and the flamboyant claims of Moroccan demagogues to Mauretania and vast stretches of the Sahara have caused many liberally inclined Frenchmen to wonder what fate lies in store for them in North Africa the day they grant Algeria its independence.
To meet this agonizing problem head on will require far more decisive and dynamic political leadership than that which the recent governments of France have displayed. In the last two years no French ministry has made any really serious effort to deal with the North African situation beyond living from day to day and improvising makeshift legislation wrapped up in oceans of rhetorical tissue and administrative pink ribbon. The recently passed “framework law” for Algeria was a typical example. Even supposing that it ever be seriously applied, it is so selfcontradictory and ambiguous in its phrasing that it can hardly do more than eternalize the status quo.
Confronted with this spectacle of parliamentary irresponsibility in the face of their country’s most formidable political problem, an increasing number of conscientious Frenchmen have begun wondering if anything can be expected from an elected Assembly, many of whose members seem to be more interested in making flashy headlines and lining their own pockets than in attending to the interests of their country. Once again there has been much talk of reforming a constitution which has made the French Assembly politically irresponsible because of its total supremacy. Efforts have been made to persuade Charles de Gaulle to raise once more the banner of constitutional reform, but the General has so far declined to do so.
Whether or not this refusal will fatally inhibit what is at present no more than a subterranean current of discontent remains to be seen. But if and when it bursts into the open, it will be led, for the most part, by men who are not members of the present Assembly and who are determined to put an end to its impotence.