The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. THURSDAY, JULY 1, 1937. FRANCE'S EMERGENCY.

Auckland Star, Volume LXVIII, Issue 154, 1 July 1937, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun.

THURSDAY, JULY 1, 1937. FRANCE'S EMERGENCY.

For the cause that tacks assistance, For the wrong that needs resistance, For the future in the distance, And the good that we can do.

One measure of the crisis in France is the extremely wide powers which both the Senate and the Chamber oL' Deputies have consented to give the Government to deal with it. The Government- has been empowered to take, and to enforce by decree, "all measures" it deems necessary. It is worthy of note that the Senate, which refused full powers to the Socialist Government of If. Blum, has granted them to AI. Chautemps, whose Ministers include the Socialist leader and some of his followers. This change of attitude may be attributed in part to the fact that the reconstituted Cabinet inspires more confidence than the old one, but also to an increasingly sharp recognition of the gravity of the financial situation. The new Government is now in the position of a dictator, but only until August 31, when its emergency powers expire. It seems unlikely that the nation can be retrieved from its financial morass in that time.

The figures quoted by the new Finance Minister, M. Bonnet, and reported yesterday, were startling. He said that between June 1 and 28 nearly £70,000,000 worth of gold had fled the country, and there was only £.182,000 "in hand that morning." It must be remembered, however, that much of this gold may flow back if Government's measures inspire confidence. The rapid outflow of gold has not been an exceptional occurrence in France in recent years; in one week of May of last year the loss was £15,650,000. But M. Bonnet's statement as cabled referred only to the gold situation; the Budget situation is at least as bad. The estimated deficit in the ordinary Budget for 1937 was £44,000,000, but unofficial estimates put the figure at £91,000,000. At the end of April the then Finance Minister admitted that he would have to borrow about £174,000,000 before the end of the year, but this, in view of other commitments to which he made no reference at the time, was probably an under-estimate, and it was remarked that all the money would have to be borrowed on short term. The new Minister's declaration that he, is "determined to balance the Budget before the end of the year" must be regarded with the maximum of reserve.

For France's neighbours, particularly Britain, the question of immediate importance is the effect which her financial emergency— which, although no new thing, seems at last to have come to a head—will have upon the international situation. M. Bonnet hardly exaggerated when he said that the maintenance of peace in Europe depends on a strong France. During the Premiership of M. BJum the relations between the French and British Governments were more cordial than they had been for years, and the two Governments co-operated with considerable success in meeting the frequent and dangerous difficulties arising out of the Spanish situation. Whether that co-operation can continue to bp fruitful is at the moment doubtful.