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BATTLE OF INDO-CHINA: Cleared for Action

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After months of tortuousindecision, a French government was at action stations last week. The order: buoy up the nation’s economy. With each succeeding day (including Sunday), the government sinks $6,000,000 deeper into the red. Millifranc notes are pouring from the government printing presses to float government payrolls, but soon the inflation must be plugged or the economy will be in danger of foundering.

With taxation at 33% of the gross national product (compared with 20% in the U.S.), a compensating increase in revenue is out of the question. What cuts can be made? The social-welfare budget is an obvious choice for surgery, but with the left-wing members dominating the Assembly, no government could survive an attack on this. Last year Premier Pinay made a success by slashing long-term investments, but the gain was temporary, the loss to industry permanent.

The Unpopular War. The department every French politician has in mind, but has not yet dared meddle with, is defense. France’s annual military expenditure accounts for about 37% of the budget. Of this amount nearly half, including a half-billion-dollar contribution from the U.S., drains away in the war in Indo-China. If that unpopular war, now in its seventh year, could be brought to a close, France’s economic problem might be solved. More than that, the country would be in better shape to play its part in the European Defense Community: with more troops at home it would have less reason to fear a rearmed West Germany. So argues an increasing number of politicians, whose spokesman, Pierre Mendés-France, came close to being Premier five weeks ago. Watching the U.N. negotiating with the Communists in Korea, they feel that there can be no dishonor in opening negotiations with the Viet Minh Communists.

France is not yet ready for Mendés-France’s solutions. The expendable stand-in government of Premier Joseph Laniel was not talking truce last week, but it took the first move in setting up a situation from which advances might be made. It offered a larger measure of independence to Cambodia, Laos and Viet Nam, the states of Indo-China, to encourage them to take a larger share in their own defense.

Doing Less. Architect of the French plan is shrewd little Vice Premier Paul Reynaud, who visualizes a new French Union with wider, less binding provisions, after the style of the British Commonwealth, one which offers the small, weak states many advantages, but from which they may secede at will. “I don’t see how that could happen,” he adds, “because they wouldn’t last 24 hours.” At week’s end, Viet Nam had accepted the French proposals, Laos was undecided, but Cambodia’s King Norodom was acting as cagily as Syngman Rhee.

In Paris, the French Cabinet studied the plans of General Henri Navarre for a fall offensive against the Viet Minh, and moved sharp-eyed Ambassador Maurice Dejean from Tokyo to be Commissioner General in Saigon. Said Dejean: “They [the Associated States] will get all the freedom they want, limited only by the amount they will accept.”

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