Privatization Is Essential,Chirac Warns Socialists : Resisting Global Currents, France Sticks to Being French
PARIS: President Jacques Chirac warned Monday that France's new Socialist-led government risked isolation in the international marketplace by its failure to sell off state-controlled companies.
In his first open criticism of the government's record, Mr. Chirac also attacked its "obsolete and absurd" plans to revive controls on labor layoffs that were abolished in 1986, adding, "The state today no longer has any place in the management of competitive industry." It was, he said, "a debate from another age."
Mr. Chirac, making his first major pronouncement on domestic affairs since the crushing defeat of his Gaullist party in the elections that brought the Socialists to power six weeks ago, roamed over a wide range of topics in a television interview coinciding with Bastille Day, the French national holiday.
He said that large companies were no longer able to survive without European alliances — yet he questioned whether international partners would be willing to link up with state-owned corporations that are not guided purely by market interests.
Last week, Prime Minister Lionel Jospin said his government was halting the previous conservative government's plan to sell off Thomson-CFS, Europe's leading company making electronic equipment for defense. He said that the government would keep a decisive share in the company, arguing that its sale would benefit the interests neither of the state nor of Thomson employees.
Today on IHT.com
Until the announcement, analysts had seen Thomson as the key piece in a Europe-wide electronics company capable of competing on an equal level with U.S. conglomerates.
The government has yet to pronounce its position on the proposed privatization of the plane maker Aerospatiale and its merger with the privately owned Dassault, a manufacturer of high performance fighters and business jets. Any failure to go ahead with this plan could obstruct the project to turn the Airbus Industrie consortium, in which Aerospatiale is one of the lead partners, into a privately owned corporation by the end of the century.
Mr. Jospin also has not said whether he intends to sell off France Telecom, the proceeds of which could be critical in ensuring that France meets the 3 percent deficit target to join the European single currency next year.
Mr. Chirac said there would be "very serious consequences" if the European currency target was not met and France was not ready to join. "We would isolate ourselves," he said.
He insisted that the monetary union target could be met provided the government controls public spending for the rest of the year. It would be easier to meet the criteria, he pointedly said, "if we carry out privatizations that are necessary for the economy and useful for the budget."
The president said that for Europe and France to develop their economic capacity, "it is necessary to have a monetary power as strong as the dollar."
The government insists that it can carry out its aim of creating jobs, while staying on course for monetary union, by redirecting money already allocated by the previous government.
Mr. Chirac was asked whether he thought that the Socialist-led majority in the legislature would last its full term of five years. "I think so," he replied, saying that he wanted to establish a "constructive cohabitation" with Mr. Jospin.
He said there would be no problems if the government worked with him in modernizing France, upholding its place in the world and protecting its institutions. But he suggested that such government actions as the plan to reintroduce restrictions on layoffs ran against such modernization.
If France wants to have a prosperous economy and create jobs, he said, it should not "imprison the activities of those who create, invest and work in totally obsolete and absurd regulations."
