France: The Bitter Taste of Reality

To calm skeptics, Mitterrand devalues the franc

No sooner had he moved into the Elysée Palace than he set about reflating the economy to fight France's record 7.7% unemployment. True to his campaign promises, he reversed predecessor Valéry Giscard d'Estaing's cautious policy by introducing a budget calling for 27% higher public spending and a $17 billion deficit. He made good on a longstanding pledge to take over private banks and key industries. He increased welfare benefits to families, the aged and the handicapped. But last week President François Mitterrand was forced to...

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