Prices Frozen To Halt French Inflation

Press, Volume XCVI, Issue 28368, 29 August 1957, Page 13

Prices Frozen To Halt French Inflation

(Rec. 7 p.m.; PARIS, Aug. 27. “Nothing will be able to save the French economy from disaster if French prices in the coming months step outside the limits we have assigned to them today,” Mr Felix Gaillard, the French Minister of Finance, said when he announced tonight that the Government had decided to freeze prices at the level of August Id in an effort to hall inflation

The general freezing of prices took effect from today. The French Government has also decided to reduce the prices of all pharmaceutical products by 4 per cent.

Mr Gaillard recalled that a voluntary reduction of 6 to 1U per cent, had already been effected by the big shops and a certain number of other shops rn household goods, electrical apparatus, radio and television sets, gramophone records, and cameras. E.P.U. Deficit Mr Gaillard, announcing these measures, said: “France had a deficit of 132 m dollars at the European Payments Union in July and the negative balance of her balance of payments amounted to 98m dollars. French reserves in foreign exchange after settlement of the July debits were reduced to 280 m dollars. “The situation today nas improved, but the equilibrium now reached is precarious ” He said that the 20 per ceni. tax on imports and the 20 per cent, bonus for exports Ithe form of devaluation chosen by the present Government] had already put an end to speculation against the franc. Instead of getting into debt, France was again obtaining dollars on its balance of trade. Pressure on the £ sterling has

eased noticeably in the last 10 days, says the financial correspondent of “The Times.” It has recovered a good deal of its poise in the exchange markets. It is believed in London that the firm denial of a revaluation of the German mark last weeK may have had as much effect in calming some of the exchange fever as anything else.

Some sort of balance has been restored for the moment, but another testing time may come at the beginning, of next week, when the gold and dollar reserves are announced and the monthly figures of the European Payments Union become available.