Giscard Slips off Olympus

By Henry Muller

Diamonds and austerity lower the President's lofty standing

A girl's best friend can be a politician's worst enemy. Last week the French satirical weekly Le Canard Enchaine charged that President Valery Giscard d'Estaing, while serving as Finance Minister six years ago, had accepted a 30-carat tray of diamonds worth $240,000 from Jean-Bedel Bokassa, who was deposed as Emperor of the Central African Republic last month. There is no law prohibiting French politicians from accepting such largesse. The Elysee Palace, in fact, while trying to minimize what it called the "nature and value" of the gifts, did not deny that a "traditional exchange" had taken place. Bokassa also gave diamonds, the weekly said, to Cabinet Ministers Robert Galley and Yvon Bourges, and Giscard's top adviser, Rene Journiac. Other alleged recipients: Giscard's brother, Business Consultant Olivier, and two of their cousins, Banker Franc,ois and Finance Official Jacques. Unlike the President, his relatives all denied the allegations.

Canard's attack could not have come at a more uncomfortable time for Giscard, reports TIME Paris Bureau Chief Henry Muller. It underscored the venomous tone that French politics is taking on as the 1981 presidential election approaches. The President's popularity as well as his much vaunted reputation as a fiscal wizard have both slumped badly. According to polls published by Paris' daily France-Soir, his approval rating has dropped nine percentage points since January, to 45%. His countrymen have become increasingly angry about the austere economic policies France has pursued since Giscard named Economist Raymond Barre as his Premier in August 1976.

Financial experts praise Barre for having stabilized the once wobbly franc and eliminated France's trade deficit. But the man in the street is more aware that unemployment has risen to 1.4 million, a record 6.4%* compared with 4.4% when Barre moved into the Premier's official residence, the Hotel Matignon. Inflation, which he vowed to bring under control, has been running at an annual rate of 11.3%, vs. 9.7% in 1976. Barre has warned that the French face more, not less, belt tightening. Said he: "Next year will be very difficult. The choice is not between maintaining or increasing purchasing power, but between its maintenance and its amputation." Thanks in part to that kind of gloomy prognostication, Barre's approval rating has fallen even lower than Giscard's, to 28%.

Until recently, Giscard was able to stay regally above the political fray, letting Barre run the country on a day-to-day basis and, conveniently, leaving him to take the heat for unpopular decisions. But now, says Jeanne Labrousse, director of the polling institute I.F.O.P.: "We have reached the point where discontent is so high that Barre cannot absorb it all himself." According to Jacques Attali, a leading Socialist economist, the reason is that Giscard and Barre can no longer promise light at the end of the austerity tunnel. Says Attali: "The French are losing hope." According to a survey in the business magazine L'Expansion, three out of four Frenchmen now believe that the economic crisis will be "enduring" rather than "transitory."

The deteriorating mood has forced Giscard to modify his Olympian stance. "The feeling of Frenchmen can be characterized by three attitudes: discontent, doubt and worry," he admitted on national television. Even as he spoke, that discontent was being aggravated by new government austerity bites: a punishing jump of a full percentage point in employees' social security contributions and increases in the government-controlled prices of items ranging from rail and air tickets to cigarettes and gasoline (to $2.75 per gal.). Charged Georges Seguy, head of the Communist-dominated C.G.T. union: "This is not austerity, it's plunder."

So far, the political opposition in France has been unable to capitalize on Giscard's troubles. Though Communist Leader Georges Marchais has said, "I'm ready to unite with the devil to checkmate the Giscard-Barre policy," he and Socialist Chief Franc,ois Mitterrand are bedeviled by a problem: they are not even on speaking terms. There has been no attempt by either man to patch up the bitter ideological split that destroyed their chances of winning last year's legislative elections. Jacques Chirac, the ambitious Paris mayor and neo-Gaullist leader who hopes to challenge Giscard in the 1981 presidential election, has not yet recovered from his party's drubbing in the European Parliament elections.

Giscard's sharp decline in popularity has fueled rumors that he may soon replace Barre. "He is an honest man, above all suspicion," Giscard responded when asked about Barre on a television interview. Coming from the President, who had lauded Barre as "the best economist in France," that faint praise appeared to signal a new arm's-length distance between the President and his Premier.

But dumping Barre will not be easy. Many foreign officials and businessmen view Barre as a symbol of the rigor and discipline France needs. Bankers fear that Barre's departure would diminish confidence in the French economy, frighten capital investors and cause the franc (which has held steady against the West German mark for more than a year) to tumble. In a last-ditch defense of his policies, Barre sounded an emphatic warning against false expectations. "You can replace me, but don't have any illusions," he told a meeting of Giscard's supporters among the members of parliament. "My successor, whoever he is, will be forced to show the same strictness." What Barre obviously meant was that since austerity will not soon give way to prosperity, Giscard will have to find some other route back to Olympus.

* A politically more damaging statistic in France than it would be in the U.S., since French economists put full employment at about 2% jobless, compared with about 4% in the U.S.

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