Ronald Reagan has won the gruding admiration and applause of the European financial community for the revival of the American economy -- and the American spirit. But his otherwise approving auidence here gives him a negative score so far on international economics.
The plus marks of the domestic side are accorded the president despite the fact that rising interest rates in the United States have pushed the dollar so high that the formerly mighty Swiss franc and West German D-mark have been humbled.
Investment money flows out from this side of the Atlantic, seeking better returns on politically more tranquil shores. The fabled financial center Zurich -- the gnomes themselves admit it -- is losing out to New York and London.
In interviews with key officials of the big three Swiss banks -- Swiss Bank Corporation, Credit Suisse and the United Bank of Switzerland -- I found a striking unanimity of opinion favorable to Reagan's domestic program and a belief that he is successfully restoring American power in the world.
"The strong dollar reflects a new wave of confidence in the American economy," Franz Lutolf of the Swiss Bank Corp. told me. "We knew Mr. Reagan had been the governor of a great state, but we were wondering what kind of a president he would be."
Oswald Aeppli, chairman of the board of Credit Suisse, said: "We have growing confidence in Reagan's economic politicy." And Robert Holzach, UBS chairman, added that under Reagan the United States "has a unique chance to regain its credibility as a world leader."
The Swiss view is perhaps best summed up by the influential Fritz Leutwiler, head of the Swiss Central Bank. In a long interview in Zurich before arriving here for a private conference sponsored by the American Bankers Association, he said: "Reagan was underrated in Europe, and underrated by me as well."
What has impressed normally hardheaded bankers is the way Reagan assigned his top priority to economic recovery, jammed through unprecedented budget reductions and arrived early at a point where he can get most of his tax cut through -- or delay it if he decides the economy needs less stimulation. Leutwiler guessed that the rate of U.S. inflation "will drop to 8 percent or even seven by the end of the year," pulling interest rates down significantly.
Mostly, these men shake their heads in a mixture of disbelief and bewilderment at the astonishing firt-quarter real-growth rate of 8.4 percent in the United States, accompanied by a reduction in inflation -- all in the teeth of 20-percent interest rates.
Where Europeans find Reaganomics the weakest is in its foreign policy aspect. This is not so much a reaction to high interest rates (which the financial men here don't like, but understand). What worries them in the inward, almost isolationist, tone of American international economic policy under Reagan.
All over Europe there is concern, for example, over Undersecretary of the Treasury Berly Sprinkel's enunciation of a hands-off policy on American intervention in foreign exchange markets. The United States wouldn't intervene except in crises, or to stabilize "disorderly" markets, Sprinkle said.
"You won't be surprised if I tell you my first reaction was a very negative one," Leutwiler told me in the elegant offices of the Swiss National Bank. "We felt it was completely unnecessary to say it, especially at a time when the central banks fo the United States, West Germany, Switzerland and Japan declared their cooperation had improved.
"What happened in 1978 [when the dollar collapsed and the Western European hard currencies became overvalued] -- this sort of disorderly development in exchange markets is never going to happen again."
Actually, the storm that Sprinkel touched off is calming down. Assurances have since been received from the United States that the Reagan administration is just as anxious as its partners to coordinate policy. "Not even central bankers," Leutwiler says with a twinkle in his eye, "can predict when a crisis comes. They know it best when looking back on it."
What will be more difficult to shake, they feel, is president's Boy-Scout-like faith in the ability of the private sector to play a more prominent role in financing Third World aid and investiment. Throughout Europe, there is fear that ideology on this score is getting in the way of practical good sense.
Lord Harold Lever, longtime confidant of past British governments, told me in London that Poland has -- in effect -- defaulted on $20 billion worth of loans from Western banks. "We have to paper this over, or it would ruin the banks -- and have little effect on Poland," Lever said.
Most European financial men are as dedicated as Reagan to stimulation of investment, free capital movement and all similar elements of a market-oriented system. But they also see the world going through a painful adjustment period, with huge debts to be financed. They anticipate that with some additional experience, the Reagan administration will become more sophisticated in international affairs.
At least they hope so. "The danger," said Lord Lever, "is that [otherwise] the deficit burden will fall on the weakest ones."