Post-Mitterrand-election panic in French business community begins to subside

The hysteria that descended on the Paris Bourse earlier this week, causing a sharp drop in French shares and a slump in the franc, appears to have leveled off.

But the nervous uncertainty in business circles following the election of France's first Socialist president in the history of the Fifth Republic remains.

In contrast to the pre-election stock market quotations of May 8, French shares fell by 15 to 20 percent following the May 10 election with few deals on the floor. Under a French government regulation, stocks cannot be bought or sold if their values drop 10 percent or more in one trading session.

Despite the intervention of the Bank of France over the past four days, the franc plunged May 14 to 5.57 against a strong dollar --attempted assassination of Pope John Paul II also contributed to its drop, a banker said.

It was only when a Socialist Party economic spokesman seeking to alleviate fears and prevent serious market consequences announced May 12 that the new administration would honor state loans and not carelessly invoke the proposed nationalization of banks and certain major industries, that the panic began to subside.

Another assuaging factor was the proclaimed determination of France's conservative forces to block the left in the June legislative elections. President-elect Francois Mitterrand has said he will call for the elections once he takes office.

The Union for French Democracy (UDF) of outgoing President Valery Giscard d'Estaing and the neo-Gaullist Rassemblement Pour la Republique (RPR) has already declared its intention to put up a single candidate in most constituencies, or support the leading candidate in the second and final round.

Giscard d'Estaing has already said he will continue defending the "interest of France." But according to sources in the Giscard camp, the dejected outgoing president has taken his defeat extremely poorly. Not only has he failed to appear or nationwide radio and television, but he has bitterly attacked the neo-Gaullists, notably Jacques Chirac, for having betrayed him.

"Giscard was so utterly confident that the French people would not let him down that he still can't come to terms with the fact that someone else will be taking over his job," noted one source.

Several UDF leaders and close associates have already had severe disputes with Giscard over strategy. But despite their growing disaffection they will still seek to reduce the influence of an overly assertive Chirac determined to assume the role of leader of the "new right."

While the Socialists move to take over the reins of government, businessmen are anxiously scrutinizing possible Cabinet appointees in an attempt to prepare themselves for France's economic future. So far, Mitterrand has kept his proposed Cabinet list secret.

"It is necessary to know who will influence Mitterrand the most," said the president of a private French bank destined to the nationalized if the Socialists obtain the necessary working majority in the June elections. "If it is [Jacques] Delors, then we can talk . . ."

Delors, a moderate unlikely to make a rash economic move, is considered a top possibility for prime minister. But Mitterrand will probably name two successive prime ministers in the month to come.

The first must be a politically spirited man such as Pierre Mauroy, the highly successful mayor of Lille. Mauroy is thought capable of carrying the Socialists through the elections by generating enough confidence to establish a strong center-left electorate while at the same time drawing enough votes from the Communists to render it relatively toothless.

Mauroy is traditionally closer to the spirit of the West German Social Democrats than the dogmatic socialism of the CERES (Center for Socialist Studies , Research, and Education), the extreme left wing of Mitterrand's party. Once a working majority has been achieved, then Delors is expected to be appointed prime ministers.

"I have no idea what will happen," said Claude Bourg, a deeply concerned company executive. "I suppose the best thing to do," she says, "is to carry on with busin ess as before."