FINANCIAL REFORM IN FRANCE.

Taranaki Daily News, 28 April 1934, Page 6

FINANCIAL REFORM IN FRANCE.

Whatever may be the result of the Budget of Great Britain in the electorates of the United Kingdom, it appears evident that its record of successful emergence from a critical position has impressed a neighbour. The Premier of France has announced his intention of seeking a recovery for his nation’s finances by following Britain’s lead in trying to adapt internal prices to world levels. The recovery programme is to be external as well. France will co-operate with other nations in increasing the price of raw materials and thus stimulating a revival of international trading. In other words, the policy of self-sufficiency is being abandoned in France, that is, of course, if the Government can get sufficient backing from the Legislature, a proviso that is much more serious in the Chamber of Deputies than it would be in the House of Commons. For a time it looked as though France’s adherence to gold, and her high protection policy had isolated her from the worst effects of the depression. On the contrary, it only postponed the evil day, and the Republic now finds itself with costs bolstered up by Protection and prices depressed by adherence to gold. The French Government proposes to reduce interest rates, to lower the cost of living and to increase purchasing power by a national public works scheme. It is still considered inadvisable to abandon gold, but with reduction in the cost of living it is hoped to bring about a reduction in interest charges, and by reductions in war pensions and Civil Service salaries to reduce costs of administration as well. France is learning, as Britain did, that there is only one way out of financial difficulties. It is by keeping expenditure within income and applying any surplus to the payment of outstanding liabilities. The Republic, or at least the present Government, is also becoming convinced that a policy of self-sufficiency is no longer tenable, and that if a nation would prosper by trading it must be prepared to buy as well as sell. That is a condition of economic wellbeing that is being made clearer to all Europe as time goes on.