French officials attempped today to minimize the public impact of the confrontation over the shipment of U.S.-licensed gas compressors to the Soviet Union in defiance of a U.S. ban, while privately they acknowledged the potentially grave repercussions that the case is having on U.S.-European relations.
Finance Minister Jacques Delors said on French radio, "We will manage to solve the problem," hinting that U.S.-French negotiations are continuing behind the scenes.
Privately, French officials expressed the hope that the Reagan administration would be satisfied with reprisals against individual companies and not escalate its retaliation to a government-to-government confrontation.
The Reagan administration blacklisted two French companies involved in the sale today, barring them from importing goods or technology from the United States.
"It's a very volatile moment in our two countries' relations," said a French official, who asked not to be identified.
The government of President Francois Mitterrand is under domestic pressure to save French exports and jobs based on trade with Moscow.
The initial U.S. measures, apparently designed to demonstrate that more European jobs will be lost by defying the United States than by disappointing the Soviet Union, will add a new commercial and political crisis to the mounting tension between France and the United States. While expecting the U.S. decision to cut off technology to Dresser France, the Dresser Industries subsidiary that built the compressors, French officials were less prepared to see the U.S. retaliation extended to Creusot-Loire, the recently nationalized manufacturer that ordered the compressors and will install them. While only about 250 jobs are involved at Dresser France, the impact could be much greater over time at Creusot-Loire, which also depends heavily on U.S. technology.
Alsthom-Atlantique, a third French company that has said it will eventually deliver banned U.S.-designed rotors, uses General Electric technology almost exclusively for its manufacturing.
"The Reagan administration should not make the mistake of believing that France's economic difficulties will make the Mitterrand government surrender because this has now become a national political issue," a French diplomat said.