French Socialists aim for high ground as popularity sinks

When the governing French Socialists gathered recently for a party convention , all they could talk about was defeat. Prime Minister Laurent Fabius told the delegates that it ''was urgent that the left stop proclaiming that it is certain to be beaten.''

First secretary Lionel Jospin warned that unless ''the present lineup of forces'' changes, ''we will lose the elections.''

Obviously, the Socialists are in deep trouble. Beset by economic woes and recent diplomatic gaffes, President Francois Mitterrand has seen his popularity plummet to a record low of 25 percent. Top Elysee Palace advisers have written off any chance of gaining an absolute majority in 1986's parliamentary election. At best, they hope to stitch together a new coalition.

The problems date from the Socialists' original economic experiment. Sweeping into power in 1981, they confidently predicted the country would be able to pull itself out of recession by a huge increase in government spending, sharp increases in taxes for the rich, and wholesale takeovers of private industries and banks.

It didn't work. Inflation stayed too high, the trade deficit soared, and the foreign debt reached record levels. After a year and three devaluations, the Socialists made a sweeping aboutface, clamping the country in a classic conservative program, cutting social spending, and preaching a new doctrine of private entrepreneurship.

The austerity hurt - especially the Socialists' working-class constituency. More than 2.4 million Frenchmen are unemployed, and purchasing power is down for the first time in nearly 30 years. Economic growth was 1.2 percent this year and is expected to be only 1.8 percent next year.

Politically, these statistics are poisonous. Last spring, unions staged spectacular marches protesting layoffs. Last summer, the Communists decided to pull out of the government. And this winter, the conservative opposition has been handed an easy target.

''Socialism isn't working,'' complains Alain Juppe, the chief economic spokesman for Rally for the Republic, a Gaullist party. ''We're in a bad situation.''

To combat such stinging charges, the Socialists have a few assets. They can point to a falling inflation rate, an improving balance of payments - and ironically, to bankers and economists who smile on the new conservatism.

''Mitterrand has tightened the belt, and it's working,'' says J. Paul Horne, chief European economist for the Smith, Barney brokerage house. ''The inflation and trade figures are the proof.''

While such praise may not help bring working-class voters back to the fold, it has put the conservative opposition on the defensive. The conservatives harp vaguely on the American shift to lower taxes and economic freedom. But an adviser to former Prime Minister Raymond Barre admits that any Barre-led government would follow pretty much the same economic policy with the same objectives, reducing inflation and reestablishing the trade balance.

''I don't think we will diminish unemployment,'' he says. ''At best, we could limit its rise.''

Squabbling also has kept the opposition from taking full advantage of Mitterrand's woes. Each of its three potential leaders - former President Valery Giscard d'Estaing, Paris Mayor and Gaullist leader Jacques Chirac, and Barre - has spent more time positioning for personal advantage than for unity against the Socialists.

The public lack of confidence is clear. When the influential conservative magazine L'Express asked in a recent cover story, ''Is the opposition credible?'' only 31 percent of those polled answered yes.

So far, the Socialists have failed to make use of this disarray. But as incumbents, they could try various tacticsbefore the 1986 vote. President Mitterrand has been hinting at switching the electoral system to proportional representation, which would increase his chance of building a coalition. Another Cabinet switch is also possible.

Most of all, though, the Socialists will argue that despite austerity they are the party of compassion. This means, according to one Elysee adviser, ''not letting unemployment get out of hand.'' A big public works program was announced in September as well as a job training program for the young. More pre-electoral spending to induce growth is possible, the adviser says. The ultimate design is to scare the working class back to the fold.

''We will show that we avoided a recession like in England or the US,'' says Emmanuel Davril of the Socialist Party. ''If the opposition wins, they will be brutal.''

Behind this rhetoric, the Socialists have changed the old parameters of French political debate. In the past, conservative governments were profoundly in favor of state planning and antiliberal. Through credits and plans, they kept a firm hand on economic choices.

After their initial error, the Socialists have set out to reduce the role of the state. The conservatives have had no choice but to change their tune and adopt an even greater anti-interventionist stand.

''It's fascinating to see that nobody in France talks about socialism and state control anymore,'' says Gaullist leader Juppe. ''The intellectual debate is about liberalism.''

By past standards, even this debate is tame. Politics used to mean ideological warfare, freely drawing on such apocalyptic terms as class warfare. Today, it has almost been turned into the American-style competition between Democrat and Republican.

''In retrospect, I believe the Socialist period will appear very useful,'' says Smith-Barney's Horne. ''On one side, it has forced the left to become realistic. On the other side, the right has been forced to learn something new and adapt their dirigist ideas to Reaganomics.''