France

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The Economy

Economically the 11 years of de Gaulle’s presidency were a golden age for France. After 1961 the country was at peace, the drain of wealth and human lives into colonial wars was ended, and the central government was stable. Between 1959 and 1970 the index of industrial production nearly doubled, and the yield of cereal crops increased 50 per cent. The gross national product increased at an average of 5.8 per cent annually between 1960 and 1975, a rate exceeded only by that of Japan. Purchasing power continued to rise, and the French people achieved an affluence unmatched in their past.

Nonetheless, in the mid-1960s signs of malaise appeared. Monetary inflation continued. Unemployment revived. A surplus of university graduates, products of the democratization of higher education in the 1950s, were growing angry at a society that offered them no suitable jobs. To the young generation which had grown up in an age of affluence and knew little of stagnation and deprivation, the consumer society seemed unfulfilling.

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The End of de Gaulle’s Presidency

In May 1968 all the forces of discontent burst forth in revolt. Students at the University of Paris, protesting police brutality, went on strike and occupied university buildings. Their example set off strikes of students and workers throughout the country, and by the third week of May the country was virtually paralysed by a general strike. The government’s efforts to end it by persuasion and concession failed, and the fall of de Gaulle’s government appeared imminent. In this extremity de Gaulle, after assuring himself of the support of army divisions stationed in Germany, dissolved the National Assembly and called new elections. The electorate, fearful of growing disorder, rallied to de Gaulle and gave his party an absolute majority in the new assembly. De Gaulle, however, felt the need for additional endorsement of his presidency. In the spring of 1969 he announced a referendum on two constitutional reforms and declared that he would resign if the voters should reject his proposals. In the voting on April 27, 1969, 53 per cent of the voters cast negative ballots, and de Gaulle resigned the next day. He retired to his private estate in eastern France, took no further part in political affairs, and died in 1970.

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The Pompidou Administration

In the elections held after de Gaulle’s resignation, Georges Pompidou, Prime Minister from 1962 to 1968, was elected to succeed him. In foreign affairs he continued de Gaulle’s emphasis on French independence of the two superpowers. He continued close cooperation with West Germany, tried to maintain friendly relations with the former colonies, and supported the European Common Market. In style, however, he was less imperious and more conciliatory. He dropped his predecessor’s opposition to Great Britain’s entry into the European Community (now called the European Union), and he involved the National Assembly more fully in the formulation of policy.

In 1973 the French economy was hard hit by the Arab oil embargo and its disturbance of the world economy. France had no significant oil deposits in its own territory, and French coal reserves were nearing exhaustion. The rapid industrial growth of the post-war years was suddenly slowed, unemployment rose, and the inflation rate spiralled. Before the government could deal with the new situation, Pompidou died in April 1974.

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The Election of Giscard d’Estaing

Pompidou’s death came suddenly, and the political parties were unprepared with candidates and manifestos. A dozen candidates entered the election. In the first round of voting the Socialist candidate, François Mitterrand, who was supported by the Communist Party as well as by his own, won the largest vote but fell short of the required majority. Centrists and rightists rallied to the runner-up, the Independent Republican candidate, Valéry Giscard d’Estaing, and in the subsequent round he won the presidency with a very small majority.

Giscard planned to associate all centrist parties with the government, to end outdated ideological conflicts, and to remove old barriers to change. The parties rejected his advances, however, and the worsening recession precluded the adoption of new social programmes and increasingly preoccupied the government. In 1975 the index of industrial production fell for the first time since the end of World War II in 1945, and unemployment rose to 900,000, a 45-per cent rise over the level of 1974.

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The Giscard-Barre Administration

In August 1976 Giscard appointed a new Prime Minister, Raymond Barre, an economist without party affiliation, and charged him with ending industrial stagnation, the foreign trade deficit, and inflation. Barre undertook to move France sharply towards a free-market economy, reversing three centuries of government direction. All price controls were gradually removed. Ailing companies would receive financial assistance from the treasury only if they demonstrated the ability to modernize and to adapt to changing market conditions. Industries no longer competitive in the European or world markets were obliged to retrench. High-technology, competitive industries were encouraged. To cope with the energy problems created by rising oil prices, the building of nuclear power plants was stepped up. To safeguard France’s vital sources of petroleum, the foreign ministry took a more pro-Arab stance. Continuing increases in the price of oil, however, upset many of Barre’s calculations. Private investment did not rise as expected. Foreign trade remained in deficit, and inflation and unemployment continued at high levels.