[The following article appeared in the August 30 issue of Rouge, the French Trotskyist weekly. The translation is by Intercontinental Press. The subtitles appeared in the original.]
With production in most capitalist countries slowing down noticeably, France remains today the only important capitalist country to escape the recession. Production is being maintained at an annual rate of increase of between 4 and 5 percent. There has been a strong surge in exports. The franc has risen by 7 percent in relation to the mark. In many firms, the order books are filled for the fall. For some time [Premier] Chirac has been holding forth with comments like "With all due respect to Mr. Seguy [secretary of the CGT, a labor confederation], there is no economic crisis in France."
However, this optimism cannot hide the problems confronting the government:
• A 35,000 million franc [about US$7,280 million] deficit in the balance of payments to overcome;
• A rise in prices that, despite the government's promises, has yet to be brought below an annual rate of increase of 16 percent;
• An anticipated rise in unemployment, with an employment situation that in several industrial sectors has made jobs the number one problem.
This, and not the smoke screen of fine words on television, is the evidence on which the working class can base its verdict on the Giscard government's economic policy.
The Fourcade Plan Will not Stop Inflation
After having defended against Chaban-Delmas [the Gaullist candidate in last spring's presidential election] his deliberate refusal [as finance minister] to carry out any deflationary policies, Giscard is today beginning a slight turn by adopting a price-control policy. This minimal struggle against inflation had become necessary for the sake of European economic recovery and to help meet the dangers of a social explosion that a rise in prices of 20 percent a year would have involved.
The method he has used shows clearly the situation in which the government finds itself. A ruthless and dramatic policy of wage and price freezes is out of the question; it would risk "cutting off expansion," and above all, for a government whose electoral margin is so narrow, would amount to playing with fire: "The relationship of social forces has changed since May 1968. It is no longer possible to slow inflation, let alone stop it altogether, by simply hitting the wageearners as Antoine Pinay and later, General de Gaulle did," the bosses' magazine l'Expansion noted quite lucidly in its July-August 1974 issue.
Instead, the plan of [Finance Minister] Fourcade has been covered with a sauce of "social" measures; it attacks the workers' living standards but it does so somewhat indirectly, encouraging the bosses to tighten the screw s.
The measures undertaken are in the first place, some of the remedies traditionally used by bourgeois governments (an austerity budget, restrictions on credit), plus the notorious "temporary tax," which encourages businessmen to hold back on investments and to reduce wage increases. It is not yet known in detail how all these measures will work out, especially the application of the temporary tax, but several things are already clear:
1. The acknowledged aim is to reduce consumer purchases.
Giscard thinks the wage increases the bosses have had to concede so far are too large. The Fourcade plan is aimed at reducing them. The (unpublished) forecasts made by the ministry in June 1974— at the very time the Fourcade plan was announced - are quite eloquent: the growth in buying power must be slowed down. Based on hourly wage rates, it should decline from 6.3 percent in 1973 to 3.8 percent in 1974; and based on available income (which takes account of taxation) it should decline from 7.1 percent to 1.2 percent. These are averages, which means that a decline in purchasing power is forecast for some categories of workers.
2. These measures do not affect all firms in the same way.
The big export firms are hardly touched by the credit restrictions, since they can borrow on the Eurodollar market; they will continue to make juicy profits. But small and middlesized firms are literally strangled, and petitions for bankruptcy are increasing.
3. The government will not even succeed in reducing prices to the target level it set publicly.
Fourcade appears to have prepared a very modest timetable. The goal is to end the year with a 1 percent price increase a month (a record rate of 12 percent a year!), then in 1975 to bring the price level in France down to the level of prices in Germany -that is, to a rate of increase of 8 percent. But taking into account the fact that the prices of raw materials have, contrary to expectations, begun to rise again, and the fact that the OECD [Organization for Economic Cooperation and Development] itself is pre dieting an inflation rate of 14 percent for France in 1975, this forecast appears to be so much hot air. Truly, when it comes to statistics, Giscard seems to have made the big lie a standard government prodecure.
As to Operation "Put the Brakes On," cooked up for the fall as a method of lowering some consumer prices, it will scarcely amount to more than an advertising campaign. While they will make a show of lowering the price of garlic baloney — as Fourcade has announced -by 8 percent at the leading stores, other prices will continue to climb, beginning with fuel and postage stamps.
A Planned Decline in Jobs
Unlike other European countries, France has not had a large increase in unemployment. While in Germany, for example, the number of unemployed has doubled in one year, the number of unsatisfied job seekers in
France has increased at a relatively slow pace.
However, the unemployment problem will take on considerable importance in the fall, because the general increase in unemployment will accelerate, and some industrial sectors will experience major difficulties.
The government's policy in this area will be a completely cynical one:
• It is forecasting a "reasonable" rise in unemployment sufficient to exert pressure on wages. With the savage candor of a good technocrat, Fourcade stated in a Le Monde interview that there is "overemployment" (more than a half million unemployed!) and that fortunately this situation will not last: "As to income and salary increases, I think they will begin to change course near the end of the year..." Between now and December the ministry is predicting 80,000 additional unemployed.
• At the same time, the government is seeking to provide itself with a means for keeping unemployment within certain limits by manipulating immigration: the entry ban on foreign workers and the expulsions of immigrants who have lost their jobs should "get rid of several tens of thousands of jobless, by exporting unemployment to its native countries.
The Giscard regime doesn't operate on the basis of sentimental considerations. Its main aim is efficiency and profitability; it simply strives to lessen the most devastating effects of its policy. This can be seen in several industrial sectors:
• On the one hand, the government is taking a whole series of austerity or restructuring measures that have serious consequences for the jobs of thousands of workers- the decrease in public housing, the elimination of projects already under way, the reduction of the Concorde program, and the strangulation of a whole string of small and medium-sized firms and other lame ducks of capitalism. This has led to a spectacular increase in the number of bankruptcies (8,000 in six months, a 23 percent increase) and layoffs (the number of authorizations for layoffs of more than twenty persons went from 1,834 in March 1974, to 2,375 in April, and to 3,371 in May).
• But at the same time, having learned from experience, the government is trying to prevent the development of explosive situations, the growth of new Lips. Hence the examination of several proposals for maintaining wages during the first year of a mass layoff, or occupational training to retrain workers who have been fired.
An Uncertain Future
This is the outlook for the next immediate period. Beyond that, there are many underlying uncertainties:
• If it is acknowledged that the Fourcade plan is ineffective as a real means of slowing down inflation, then sooner or later the government may again find itself faced with this absurd alternative, which symbolizes perfectly the nature of the capitalist system: either to accept price increases of 20 percent a year, or to take extremely harsh deflationary measures at the risk of provoking massive unemployment (the choice will depend largely on the international context).
• Moreover, it is by no means obvious that France will not experience a recession. Production levels are at present being maintained. But these are generally linked to a favorable climate for exports. And what about the construction industry, now in the midst of a crisis, and the automobile industry, whose sales fell by 20 percent in June? These are not just two industrial sectors among others, but two key sectors that have traditionally played a leading role in growth and whose difficulties could bring about a whole series of chain reactions.
Plenty of Work to Do
In the short run, as we have seen, whether in wage and price policy or in employment questions, the Giscard government's policy will mean a series of blows against the working class, with a sugarcoating of demagogy to get us to swallow the pill.
But they won't get away with it. They can't get away with saying that the struggle against inflation has become the priority: if prices continue to skyrocket, it will be understood by millions of people as a political failure of the Giscard government.
The offensive aimed at cutting back purchasing power is far from over. Statistics recently published indicate on the contrary that the wage hikes wrested by the workers during the second quarter of 1974 were on the average, among the biggest since 1968. The working class has so far refused to bear the cost of inflation and the deficit in the balance of payments. It is unlikely that Giscard's appeals to restrain wage demands will be listened to.
So also for the job situation. It is perfectly clear that Giscard wants to use immigrant workers like infantrymen, subject to forced labor at pleasure a safety valve for the capitalist system. But it is not so sure that he will be able to do so without difficulties. Struggles like the one at EGCC have demonstrated that.
The reactions- in the middle of the vacation period -to the mass layoffs prove that the workers have learned from the experiences at Lip and Rateau. Instead of passive acceptance and demoralization, the refusal to foot the bill stands out almost everywhere.
The Maragnon plant at Coarraze, threatened with closing, has been occupied for four weeks; the workers at the Arnaud plant at Valreas (in the Vaucluse region) have been occupying the premises since July 18 to protest a mass layoff; the women workers at the INOSAF plant, struggling against the closure of their factory, have decided to take over production themselves for twenty-four hours, in order to fill an order. At Titan-Coder, there is the same refusal to comply.
And the "open house" held by the workers at the Annonay tanneries [in which people were invited to enter the plant and take part in discussions with the workers] shows the impact these struggles can have on the local population.
Giscard certainly has plenty of work to do.
Catholics Protest Thieu Dictatorship
Two protest rallies against the Thieu regime were held at suburban Saigon churches October 6. The leader of the Catholic anticorruption campaign, Father Tran Huu Thanh, received enthusiastic ovations at both rallies. The one in the morning was attended by 1,000 persons; the one in the evening by 3,000.
Thanh, the other priests, and the National Assembly deputies who accompanied them widened their charges against Thieu beyond the issue of corruption. They attacked his iron control over the legislative and judicial branches of government; press censorship; and the lack of a free system of political parties.