Mitterrand works France's financial levers with gusto

Politicians are frequently accused of reneging on the extravagant promises they make during election campaigns. French President Francois Mitterrand has proven himself to be a rare exception.

His Cabinet meeting Sept. 23 dashed any lingering hopes of French business leaders that Mr. Mitterrand might temper his early promises to nationalize five major French industrial groups and most of the remaining private banking in France.

The price of buying out private shareholders in the nationalized companies, following final government-approved guidelines, has now been estimated by the Paris stock exchange at some $6.5 billion.

Mr. Mitterrand's first televised press conference Sept. 24 has not done much to assuage his vocal but still disorganized critics on the right. Virtually the only concessions Mitterrand has made have been a decision not to nationalize foreign banks (despite advice to do so by the influential advisory body, the Council of State) and a promise not to engage in any further nationalizations beyond those already announced until the next legislative elections five years from now.

Finance Minister Jacques Delors had fought a major battle against nationalizing foreign banks, because of a fear of further frightening off edgy foreign investors. Foreign partners in the soon-to-be-nationalized Banque de Paris et des Pays-Bas have already indicated that they will drop their participation, with possibly disastrous results to the bank, rather than have the French government as a partner.

The French Communist leader, Georges Marchais, also came out against nationalizations of foreign banks as an "unnecessary step." The French Communist Party does nearly all its business with Soviet-owned banks, and nationalization would have given the Socialist Party indirect access to a considerable amount of information on Communist finances.

Mr. Mitterrand's press conference was partially intended to counteract growing nervousness which has lately begun to penetrate middle and lower echelons of French society.

Mr. Mitterrand stressed that he had insisted on nationalizations partly because it's necessary for France to reconquer its domestic markets. "I refuse an international division of production decided far from us, obeying interests which are not ours," explained Mr. Mitterrand, "We are not a pawn on the chessboard of those who are more powerful than we are."

Mr. Mitterrand went on to paint a glowing picture of how France might develop into a new center of world industrial development under Socialist leadership. "I intend for new companies as well as for some of the older ones to find a new suppleness, mobility, and liberty of action, which certain among them have lost, " Mr. Mitterrand added.

Although that rhetoric sounds encouraging, critics charge that it will take more than words to reverse some of France's economic problems, and that in some cases the deciding factors may remain outside government control even with nationalizations.

An example of the kind of problem Mr. Mitterrand may soon face, is the case of France's major computer manufacturer CII-Honeywell-Bull. Saint-Gobain-Pont-a-Mousson, one of the five groups being nationalized, owns a controlling interest in the company, but most of the computers come from the American partner, Honeywell. The government now wants to renegotiate the agreement with Honeywell to provide for more research, development, and manufacturing in France.

But experts in computer marketing point out that Honeywell is likely to maintain an upper hand even without controlling stocks. The reason is that if Honeywell pulls out, the French part of the company will fold, because it lacks the technical expertise and financial strength to go on alone.

If that happened, the French government might be forced to let Honeywell come back in the French market as a wholly-owned American company, or see the French companies who had bought Honeywell computers under government urging gradually grind to a halt because of a lack of spare parts and service.

Even if Mr. Mitterrand does succeed in mastering nationalization, he faces a dilemma in trying to make the companies he takes over profitable and at the same time fulfill the social commitments of his own political party.

A first hint of the anarchy that could come surfaced last week when the Confederation Generale du Travail union representing bank workers demanded that managements of nationalized banks be changed because of their refusal to deviate from "antisocial policies."

Essentially Mr. Mitterrand is gambling that, given the levers of power, he can make the French economy do what he wants it to do. His critics maintain that the variables that actually control an economy are too complex for any one man or political party to understand or master totally. Right now more than a few of those critics wish that Mr. Mitterrand had gone back on some of his early campaign promises.