The Reagan administration's "benign neglect" of foreign exchange rate fluctuations and its parsimonious attitude toward foreign aid ultimately could undermine support for American political and security policies in Western Europe and the Third World, France's finance minister, Jacques Delors, warned here yesterday.
In an interview marked by strong pessimism over the world economic situation that his new Socialist government confronts as it seeks to reform the French economy, Delors also voiced some new hope in finding areas of compromise with the Reagan administration on international issues as a result of his talks with American officials during the opening stages of the annual meeting of the International Monetary Fund and the World Bank.
In his remarks, made before President Reagan addressed the meeting, Delors indicated that U.S. officials had been more encouraging about future American participation in bilateral and multilateral aid than he and other delegates had expected. At the same time, France has been more forthcoming in supporting the need for setting clearly defined and at times tough conditions for loan-seeking nations than it has in the past.
But, speaking against a background of continuing turbulence in world stock exchanges and France's own financial problems that have sparked talk in Paris about a possible franc devaluation, Delors said that immediate action was needed on exchange rates and other financial problems to avoid "explosions of anger" over economic policies that would spin off and have dangerous political and social consequences.
"Those consequences would work against what the United States wants in Europe," Delors said. "Those who support a certain kind of 'neutralism' or 'pacificism' will increasingly argue that the Americans are completely indifferent to the real problems of Europe. They will argue that Europeans would be foolish to put money into defense spending or to accept new American missiles on European soil. It is beginning to happen in Europe now."
Since winning presidential and legislative elections in France last spring, the Socialists have had to pour $1.2 billion into supporting the franc against the dollar and the West German mark, and Delors repeatedly has denied that his government will devalue the franc. He repeated that assurance in the interview, and said that he felt he had the support of his European colleagues in seeking an immediate solution to the sharp currency fluctuations that have bedeviled international trade in recent months, even though West Germany and other Common Market countries have not voiced particular concern about exchange rates at the Fund meeting.
Delors, speaking in French, proposed reaching an immediate "interim agreement" between the European Monetary System, which regulates Common Market exchange rates, and the Federal Reserve Bank to align the dollar with the European Currency Unit. "This is the first step to getting the European and American economies out of the recession faster," Delors said.
He stressed that -- unlike a number of his colleagues in Europe -- he had not publicly criticized the high interest rates nor the Reagan administration's budget cutting policies. "That is something for Americans to decide. But when the country that has the leadership of the Western world, that has asked and received our help in the recent past when the dollar was weak, simply watches in 'benign neglect' as the dollar swings up and then down, while we suffer, it is just an impossible situation for us."
Delors offered no evidence that he had been able to budge Washington on exchange rates here this week, but he did cite American endorsement of the communique issued by the Fund's Interim Committee calling for an increase in developmental aid and signs of some agreement between France and the United States on "conditionality" as hopeful indicators that the Socialists of France and the supply-siders of the United States could find common ground on international financial issues.
"We are interested in making the market economy work better, not in suppressing it," he said of the Socialist vision of a global "mixed" economic system. "But the market economy can sometimes operate rather crazily, so you need guidelines and international cooperation.
"We have to work for better cooperation in economic and aid matters by the United States, Japan and Europe if we, the countries of the North and West, are to have the image we need to defend ourselves better against Soviet hegemony on the one hand and to help resolve the problems of the Southern Hemisphere on the other. If we continue to give the impression of division, of indecision, and a bit of selfishness, we all lose."
Delors also spoke extensively of the effect that the pending nationalization of five major industrial corporations and 36 French banks would have, arguing that sound management principles would continue to be followed in the newly nationalized concerns and emphasizing that the nationalized banks would be free to negotiate directly with foreign banking partners on continued operations inside France.
"Because of France's traditions and culture, this extension of the public sector . . . does not represent a threat of increased bureaucratization of our economy," Delors said. "We decided at the same time to break the centralization of administrative power that has existed in past governments. Our nationalized firms will operate autonomously."