French business fearful

Press, 13 May 1981, Page 8

French business fearful

NZPA-Reuter Paris French financiers and businessmen are fearful at a prospect of seven years of socialist rule, as Presidentelect Francois Mitterand yesterday began reviewing choices for his transitional Government.

The financial markets yesterday reeled under the impact of Sunday’s clear-cut victory by Mr Mitterand over President Valery discard d’Estaing, ending 23 years of Centre-Right rule in France.

After selling several hundred million German marks to halt a heavy run on the franc, the. State-run Bank of France raised its equivalent of minimum lending rate by

a hefty 2Vz per cent to 16 per cent — a 10-year high. Behind the business community’s reaction was alarm at socialist proposals to nationalise 11 main industrial groups and most private banks and to raise minimum wages and social benefits while cutting the working week from 40 hours to 35. Mr Mitterand’s interim Cabinet, expected to be dominated by veteran socialists, will govern until the outcome of ' a Parliamentary election which he promised before July 1 in a bid to get a Left-wing majority in the legislature. Mr Mitterrand, who will have wide-ranging Executive powers after officially taking

office in about two weeks, could use the transitional Government to enact some campaign pledges. Mr Mitterrand, aged 64. will hope for a Left-wing parliamentary majority to ensure passage of his socialist programme. The 491-seat Parliament, where CentreRight parties hold an 80-seat majority, was not due for election until 1983. Mr Mitterrand would have to wait a year before calling another parliamentary election, so that if a Centre-Right majority is returned he will face the problem of ruling with it.

Until Parliament is dissolved and the campaign launched, his primary task

will be forming the interim Government.

The socialist faithful shuttled in and out of the Presi-dent-elect’s Left Bank apartment yesterday to discuss possible Ministers.

Some commentators said he was considering appointing one Communist Minister in recognition of the heavy Communist vote for him on Sunday. . The exact date of the presidential transition has yet to be set by the Constitutional Commission. Mr Giscard holds the office until May 24, seven years to the day from the beginning of his term, although he could resign earlier.