France’s Socialist government is in deep trouble. There has been no real amelioration of economic conditions during the current year; in fact, things seem to have deteriorated further. The rate of inflation will come to roughly 9 percent this year (as against a German rate of only 3 percent and a significant lowering of the British rate). The unem- ployment rate is about 8 percent and seems to be increasing. The mean number of months during which a person is unemployed in France is around 13, higher than almost anywhere in Europe.
Many of the nationalized industrial concerns have been accumulating huge new debts. In 1981 the combined losses of the newly nationalized industries amounted to around $900 million. Last year these losses rose to $1.4 billion, and they are expected to be still higher this year. Despite such losses, the government has continued to channel new funds into the nationalized sector. Officially it has asserted that it is mainly concerned with modernizing and rationalizing industries, such as electronics, which can compete in international markets. In practice, the government has all too often consented to backing losers in such industries as steel, because to do otherwise might incur the wrath of workers who would be laid off....
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