The Start of a New Era?

The two men smiled as they emerged from the Elysee Palace last week and shook hands cordially on the marble steps. Only after President Valery Giscard d'Estaing had said farewell to Premier Jacques Chirac did a presidential spokesman announce to reporters that the Premier had just resigned. And only after Chirac had driven back to his own office did he go before TV cameras and angrily declare, "I do not have the means that I believe are necessary to carry out effectively the functions of Premier. I have decided to put an end to this situation."

For the first time in the 18 years since Charles de Gaulle's Fifth Republic swept to power, his followers no longer controlled the premiership in France. Giscard handed on the title to a highly respected but apolitical economist, Raymond Barre, thus making it clear that the President intended to keep all the reins of power firmly in his own hands. That was quite in keeping with the tradition of the Gaullist "presidential regime." But Giscard could count on unflagging support only from the 121 members of his tiny Independent Republican Party and its centrist allies, while the Gaullists still control 174 of the 490 seats in the National Assembly.

The suave Giscard and the hard-driving Chirac had once been allied --indeed Chirac had temporarily split the Gaullists to back Giscard for the presidency in 1974. More recently, the two had been rivals, and while they maneuvered for power, the opposition Socialist-Communist union de la gauche won an impressive 53% in last spring's cantonal elections (for regional representative assemblies). The two leaders differed sharply about how to deal with the leftist gains before the next Assembly elections in 1978. Chirac favored a hard-line conservatism. Giscard urged a reformist approach that might win moderates away from the leftist opposition. The difference came to a head in June when Giscard sent the Assembly a proposal for a modest capital gains tax. While Chirac maintained a conspicuous silence, Gaullist Deputies in the Assembly drastically weakened the bill before finally passing it.

Another factor in the political squabbling was the fact that France is being battered economically. Inflation during the second half of 1976 is projected at 12%--one of the highest rates in Europe. The value of the franc dipped from 4.4 to the dollar to 4.6, and once even plummeted to 5. All the while, Giscard maintained an aloof indifference that his critics saw as inertia.

Chirac was among them. The Premier first made up his mind to quit in July and sent Giscard a letter of resignation. The President tried to prevail on him to wait until after the traditional month-long August vacation. Chirac did not wait quite that long.

In Chirac's place, the President put a much more genial soul. Formerly Minister of Foreign Trade and for five years Vice President of the European Economic Commission, Barre was notable in the world of Gaullist grandeur for living in a small, book-lined apartment, driving an old Citroen and carrying his own luggage. A portly ex-professor, Barre is highly regarded in academic circles for his textbook entitled Economic Politique. Giscard called him "the best economist in France and therefore the best man to fight the inflation." Barre is expected to initiate spartan economic measures, like higher interest rates and guidelines limiting price and wage increases, in an effort to restore monetary stability. To that end, he reserved the Economy and Finance portfolio in the Cabinet for himself. On the foreign front he is likely to echo Giscard's cordial internationalism, particularly toward the U.S. and the Common Market, in contrast to Chirac's brand of Gaullist nationalism. To soothe the Gaullists somewhat, Barre named Olivier Guichard--a Gaullist party baron and bitter Chirac rival--as Justice Minister. As to how the new Giscard-Barre team will get their measures past the National Assembly, the President thinks he has a solution: the Gaullists have no choice but to back him. So far, the party's reaction has been encouraging. But the fact remains that the new government is subject to overthrow from either right or left--a situation the Fifth Republic was specifically designed to prevent.

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