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Britain's big hope remains a flood of oil wealth from under the North Sea in the 1980s. To dramatize it, Queen Elizabeth last week ceremonially pressed a button permitting oil from the first major field to flow into Britain. To muddle through until then, Wilson last week announced a program of aid to 30 industries selected for their promise of growth—but failed to say which ones they will be, whether the aid will consist of subsidies or loans or how much cash the government will put up. Until such details are spelled out, the program is little more than an overdue government promise to be more sympathetic in dealing with industry.
GERMANY, Western Europe's most influential economy, seems to be caught in a web of indecision. Despite some signs of recovery in recent months, the nation this year will suffer its steepest decline in output, about 3%, since the founding of the Federal Republic after World War II. The forecast for next year calls for real growth in G.N.P. of about 4%. But the upturn is beginning from such a low base—German industry today is operating at only 75% of capacity —that even with that relatively healthy advance the economy will be operating well below optimum levels. The unemployment rate has risen to 4.4%, and could well go higher this winter. In Germany, that is high enough to raise grim memories of the '20s and '30s, when legions of jobless workers flocked to Fascism.
The rate of inflation is now only 5.1%, a pace that would allow the Schmidt government to move to more stimulative policies. But so far Bonn has held back, contending that to follow a more vigorous course would only risk re-igniting German inflation without doing much to boost demand in the depressed economies of its chief trading partners —a rather Ford-like position. Though the government has made some stabs at stimulation with investment grants, tax cuts and a highway spending program, German businessmen continue to hold down capital spending. Jittery German consumers are also saving an inordinate amount of their disposable income, so the economy remains sluggish.
FRANCE has moved ahead of all its Common Market neighbors in its antirecession efforts. Its actions follow a year-and-a-half battle to curb inflation. By September, however, it was obvious that the nation's output would show a decline of more than 2% this year. At that point, President Giscard ordered almost $7 billion pumped into the economy in the form of investment subsidies, corporate tax breaks and public works programs. As a result, France should have the most vigorous recovery in Europe next year.
Already some movement is apparent. Industrial production has increased slightly, and construction contracts and auto sales are up. Unemployment, though, continues to grow, and last week, by one estimate, reached an explosive 1 million, touching off a rash of strikes by angry workers at post offices, subways and electric utilities. Riot cops were called to sweep Air France employees out of ground facilities at the Paris airports, where they were staging a sit-in strike. Giscard's policy has also spurred consumer-price inflation, which inched up to an annual rate of 9.4% in September, almost a percentage point over that of a month before.