France's Challenge

PARIS: The stunning victory by Lionel Jospin's Socialist Party over President Jacques Chirac's conservative coalition casts doubt over France's ability to meet the strict criteria for inclusion in a new European currency by 1999, reports Paris Bureau chief Thomas Sancton: "The questions are: Can they create new jobs? Can they stimulate consumption through raising purchasing power and at the same time meet the EU goals? Unless the Socialists' plans can be offset by tax increases -- and in France, taxes are the highest in Europe -- they are going to run up huge deficits. If they do that, and if the rules are strictly adhered to by all the partners, the French are going to have a lot of trouble making the grade." Sancton notes that the recent difficulties other EU member nations have had in meeting the standards may allow for a looser interpretation of the rules, which could give France wiggle room. "The rules for inclusion are being rethought by everybody right now, because they are all realizing that the effort is too great to meet these criteria. Even the Germans have realized they can't make it, and they've been the most hard-line in sticking to them. So what all the partners have to consider is whether they are going to adhere to the 1999 deadline, relax the rules or let the whole thing fall apart. Since everybody is going to have a lot of trouble coming in on time and on the mark, what you're probably going to see is a reopening of the debate, largely refused up until now, focusing on whether parts of the treaty can be renegotiated."