After reassurances from Socialists that stockholders would not be "fleeced" under President-elect Francois Mitterrand's nationalization plan and that small savers and investors would actually be helped by the new government, the French stock exchange today halted its two-day slide and recovered much ground, with buyers outnumbering sellers.
Prices of shares in companies due to be nationalized if the left wins next month's parliamentary elections, such as Rhone-Poulenc, also recovered, and advances ranged from 2.5 to 7 percent. Gold fell back slightly and selling pressure on the franc subsided.
One of Mitterrand's economic advisors, Pierre Uri, said on television that the new government would honor a controversial public loan, even though it had been a "monumental mistake" by the outgoing government of Valery Giscard d'Estaing. Uri also said that nationalization would not be "robbery" of shareholders, nor would "excessive" capital gains taxes be applied.
Even more reassuringly, Uri said the new government would protect small investors' and savers' rights against "powerful organized groups."
Raymond Barre, Giscard's prime minister, presented his resignation and that of his government's, to take effect on May 24 when Mitterrand's government is due to take over.
Accepting Barre's resignation, Giscard recalled that during his term, "The franc kept its value. The deficit was limited, social security accounts balanced and the economy was sustained."
The Barre's government's last act will be to draw up a detailed account of the state of the economy to act as a political reference point in the economic controversies that are sure to follow the installation of its successor. The new government intends drawing up its own balance sheet, amounting to a "state of the union message" according to one Socialist official. This account, it was made clear, will be negative in tone and will use official documents hitherto "suppressed."
The leader of the socialist trade union federation, Edmond Maire, today set his union's negotiating targets for the new period: a 35-hour week for all within five years, a minimum wage rise of 10 percent next month and a further 20 percent in three years.
The communists continue to keep a low profile to help the left's fortunes in next month's elections. Georges Seguv, leader of the procommunist Union Federation, said, "The first essential is to make sure the change of government is not temporary thing."
The clearest benefit from the election result is likely to go to the five prisoners condemned to death, including Philippe Maurice, convicted of killing of a policeman, whose appeal has been rejected and for whom a presidential reprieve is the only hope.
Mitterrand, who is pledged to seek the abolition of the death penalty in the new parliament, has said he is "not inclined to apply this penalty." This has been taken to mean he will reprieve systematically until the issue comes before the new parliament.