Austerity, acrimony rip France's Socialist dream

Two years ago, Francois Mitterrand was elected the first leftist president of France in a quarter-century and in a spontaneous act of joy, Frenchmen danced in the streets.

Today, angry students, along with various other disgruntled groups, are marching down the streets chanting, ''Hot, hot, hot, the springtime will be hot.''

Two years ago, Mr. Mitterrand promised to replace the previous government's austerity with prosperous growth, employment, and good humor. Today, he is telling his countrymen that they have to save even more money, buy even less, compete, and sacrifice.

The reality of governing during a recession has dissipated the dreams and heady optimism of May 10, 1981. It has forced Mr. Mitterrand to forgo much of his initial left-wing philosophy and align himself firmly in the center. But the key test for the Socialist President still lies ahead.

Will he be able to administer the tough measures he believes are necessary to get France's economy back on its feet? Or will the divisiveness within and without his government erupt, tearing the French left apart and causing escalating social and labor unrest?

The answer is crucial. It will help to determine whether France will continue as a strong partner in the Atlantic alliance, or whether it will weaken and withdraw behind its frontiers, crippled and ornery.

Like Charles de Gaulle, Francois Mitterrand is obsessed with the specter of French mediocrity. De Gaulle believed that France must revive its military and economic power so as to regain its ''proper'' role on the world stage.

Mitterrand fervently believes this as well. Like de Gaulle, he insists on France's independence of action - from Washington as well as Moscow.

Despite the presence of two Communist ministers in his government, Mitterrand has made clear his antipathy to the Soviet Union. He has criticized Soviet policy in Afghanistan and Poland. He has stood behind the NATO plan to install strategic missiles in Europe. Recently, he even expelled 47 Soviet diplomats in one spectacular swoop.

This does not mean, though, that France has turned into a compliant junior partner within an American-run West. Last year, Mitterrand fought a prolonged battle with Washington over the Siberian gas pipeline. Differences over trade and monetary matters remain so severe that Mitterrand is now spoiling for another fight with Ronald Reagan at the coming Williamsburg summit.

French military strategy is also out of tune with American thinking. Like de Gaulle, Mitterrand insists that France's independent nuclear force will remain the backbone of its defense. So while the US would like the allies to build up their conventional armed forces, France is cutting the size of its army to pay for upgrading its nuclear arsenal.

Despite all the similarities with de Gaulle, Mitterrand is a very different man with a very different philosophy from the mecurial general. Though a tough, cunning, veteran politician, he is also a withdrawn and sensitive intellectual, poetic, a solitary dreamer.

He is not a Marxist. But initially he was not a pale-pink Social Democrat either. Almost as much as he distrusted the Soviet model, Mitterrand distrusted liberal capitalism of West Germany and other northern European countries.

Mitterrand's socialism was to be a uniquely French invention. To cope with the crisis of 2 million out of work, a massive work-sharing program featuring shorter workweeks and retirement at age 60 (or often 55) was introduced. To make France a more egalitarian society, a wealth tax was slapped on while social benefits to the most disadvantaged were increased.

But a year into this ambitious experiment the capitalist laws of economics revealed that the country could not afford the massive spending. The inflation rate stayed too high, the trade deficit soared, and the foreign debt reached record levels. All this caused the franc to falter.

The economic difficulties worried business and disillusioned the middle class. The result was a significant setback for the government in March's municipal elections.

Following the elections, Francois Mitterrand faced a crucial choice. He could allow the country to to retreat from world competition and protect the home market: i.e., refusing to devalue the franc, withdrawing from the European Monetary System (EMS), and erecting protectionist barriers.

Or he could follow the Social Democrats within his Cabinet: devaluing the franc and keeping France firmly in the international trading system by clamping down with a painful austerity program.

After much hesitation, in late March Mr. Mitterrand chose the second path. So the nationalist Mitterrand swallowed hard and imposed a series of stringent austerity measures, including higher public-service fees and strict limits on tourism. Less than two months after this crucial decision, it is clear that Mr. Mitterrand will have a hard time staying the austerity course.

Polls show the austerity program is hugely unpopular: It means living standards probably will fall this year and unemployment will rise. The program has angered the government's union supporters and caused a bitter public squabble among the Socialists.

At the same time, students, farmers, doctors, and shopkeepers have unleashed a wave of protests. Le Monde reports 100 policemen and an estimated 70 students have been hurt. Some 113 students have been arrested.

The sudden flare-up of protest and violence revived the vivid memory of May 1968, when street-fighting Parisian students and striking workers shook the country. So far, though, the protests have remained small in comparison with those 15 years ago.

But privately, the officials say they are worried the demonstrations could spread as the austerity program bites into incomes. Until now, the main industrial unions have stayed clear of the fray. But they are growing increasingly grouchy and plan to stage brief work stoppages in the coming weeks.

As a result, the question being bandied about now here is whether the assorted protests, still relatively minor in scope, will spill over into something more threatening. If they do, opposition leader Paris Mayor Jacques Chirac could conceivably call for early legislative elections - elections are now scheduled for 1986 - and the Socialists might feel obligated to accept.

If, on the other hand, the protests subside, Mitterrand will still have a tough job ahead, putting France's troubled economy back in shape and restoring the popularity of his increasingly unpopular government.