FRANCE: Put Out No Flags

Rare is the day when the Finance Committee of the French National Assembly has a good word to say about “the Finance Minister. Last week the committee broke into applause as Finance Minister Antoine Pinay finished his report. He had good news: France is economically healthier than it has been in three decades. Spurred by last December’s 17.5% devaluation of the franc, exports are now almost high enough to match imports, producing a tidy surplus in the balance of payments. Industrial production is on the way up again. The government has cut its heavy budget deficit (caused largely by the Algerian war) to half the 1,200 billion francs predicted earlier. The government had expected prices to rise 7% after devaluation, but they are up only

3-9%-“Let us not put out flags,” cautioned Pinay. “All this is very fragile. Patience!” But he could not resist flying to Washington this week to announce proudly that France will pay up $118 million of its $2 billion debt to the U.S. before it is due.