JPRS ID: 8420 TRANSLATIONS ON WESTERN EUROPE

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• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000100040056-5
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• Original Classification: U
• Document Page Count: 47
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JPRS L/8420
25 April 1.979
TRANSLATIONS ON WESTERN EUROPE
(FOUO 25/79) a i =
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JPfiB L/8420
' 25 Ap~i'1 1979
, ~
~'RANSLATIONS ON WESTERN EUROPE
- (P~.:a:0 2a/79)
CONT~NTS ~ PAGE ,
THEATER NUCLEAR FORCES
= ITALY ~
� Italy Should Hsve More Active Role in Mediterranean y
(Fabrizio Carte; CORRIERE DELLA SERA~ 12 Mar 79) 1 -
COUNTRY SECTION
FRANCE
~ ~titterrand Interviewed on Crisis, PSF's Future
- (Francoia Mitterrand Interview; PARIS MATCH, 16 Mar ?9). 3 ~
Giecard-Chirac Reconciliation Hinted -
(Michel Gonod; PAPIS MATCIi, 30 Mar 79) 12
Outline for a New National Economic Policy
- (Chriatian Stoffaes Int~rview; FUTURIBLES, Jan 79) 16
Barre Letter Stressea Need for Fiacal Restraint
(VALEURS ACTUELLES~ 26 Mar 79) 28
ITALY
- .
~ Legitimacy of Navy's Special Forcea' Questioned ~
(Varioua sources~ varioua dates) 31
PSI Acceme's Commente, by Falco Accame
Commandoea Stationed in La Spezia, by Fabrizio Carte
~ tfilitary Discipline Law, by Guido Azzolini
~
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y CONTENTS (Cantinued) p$~~ 'c
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SWEDEN
Nuclear Firm Must Find New Ordere Soon To Survive ~
(VECKAN5 AFFARER~ 1 Mar 79) .....~.....4~ 37 ;
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- THLAT~It NUCLEAR ~'ORC~3 ITALY -
, -
ITALY ~HOULD HAVE MORE ACTYVE ROLE IN MEDITERFANEAN -
- Milan CORRIERE DELI.,A SERA in Itali.an 12 Mar 79 p 5
[Article by Fabri~cio Carte: "A More Active Role in the Mediterranean for
the Italian Navy"]
- . [Text~ In recent monthe, togathez wi.th ehe delicate evex~ts in the Near and -
~'ar Eaet, the quantitative and qualitative level of the 5oviet fleet in
ttie MediCerraaean has progreseively increased and thie March has reached an
excee3ingly high profile. The proximity of the 2 very new aircraft carriere,
Minsk and~Kiev~ of 3 powerful guided mieeile cruieere~ of 4 guided misaile
deotroyera, of 10 eubmarine~ (2 of which are missile-launching nuclear sube),
and of a very high number of logiatica and supply unite to the Italien ~oaet
conatitutes an unusual event which has attracted tha attentien of NATO Head-
quartera and that of the Italian Navy. After having ope?~ated in the Eae~:ern
Mediterranean~ the naval force moved to the Ionian Sea and ttie Str~ite of
' ~ Sicily and, divided into two groups, now appeare to be eteaming toward the
Tyrrhenian Sea and we$tward of Sardinia. ;
Near the coast, the Rusaiana' activities have been cloeely waCched continu-
ously by naval unita and helicoptere of our navy. ~
� It certainly is.not a case in which to be alarmed. The eubetantial Soviet ~
~naval presence in the Mediterranean hae been going on.continuouely for 15
yeara. In addition to~a sizeable nucleus of modern~ well-armed ~urface vee-
~ sels, nun~eroue submarines, some nucle~, amphibioua unita and a large number
= of auxiliary ehips, which are equipped, among others~ for intelligence gath~ '
ering and electronic warfare~ operate in the Mediterranean. Thez~e ie, ae
is well knowa~ the eimultaneoue presence of the U.S. Sixth Fleet.
In the NATO framework, the American naval preaence is certxinly indiep,en~able ~
and signifies a precise commitment c,n th$ part of the U.S. for the defense
of the.allied countriea. Ther~ ie no doubt, however, Chat both the Russiane
and the,Americane,, by means of theix fleete, pursue goale of national policy
which make our eea a constant arena of confrontation eub~ect to periodic
flare-upa.
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In thia framework, what ie the position and function of IC~Iy which lives
on the eea and whoae economy is fueled 90 percent via maritime rouees? The -
Italian Navy ie undertaking operations which requ~re the use of mod~rn equip-
ment and the maintaining of an efficienk command and control structur.a, re-
quiring timelinase and little publicity. The etatus of all naval forces opar-
ating in the Mediterranean ia conetantly observed and updated, but the fact
remainQ~that the Italian Navy, despiCe some modern equipment and an efficienC
organization, doee not poesese the wherewithal necesei.tated by Italy's po-
' aition and naval obligatione.
The poeaibility of playing a role of active, and not aecondary, preaence (with
~ due respect to the allies)~ the poeaibility of undertaking a credible action -
with the aim of atabilizaCi.on and collaboration within the confinea of the
Mediterranean Sea and, finallys tthe poseibility of bringing about the sCepa
toward mediaCion between Europe~ between thoeP countries which geography hae
deemed Co be on eouthern shoree, are all connected with and subordinate to _
the acquieition of more "weight" with regard to naval power, which, ae the case
hae it, ie noC tio be excl~ded when one coneiders the resourcea the country
hae set aeide for defense.
France, in purauing a policy of independence and active presence, has already .
reinforced ita Mediterranean fleet a long time ago.
The importance of naval power as an aid to the policies of those nations
involved has been evidenced in an irrefutable manner by recent international
events in which naval deployments of the two superpowers played a significant
role..
- The gaining of popularity of world intereatte regarding the Mediterranean area,
confirmed by the quantitative-qualitative balan~e of the two auperpowera' ~
fleets present in our basin, bringa forth, in an urgent and dramatic way,
queations regarding the adequacy of our political program for the pxotection
. of economic development, stability and national security.
In the paet, and unfortunate~ly in more recent times, someone stated that Italy j
was an "unsinkable sircraft carrier"; we would not want, for the lack of po- i
~ litical foresight, the same ~udgment to be held but with a slight mutation !
- resulting in a"landing wharf" open to transit by anyone.
- COPYRIGHT: 1.919 Editoriale del "Corriere della Set-a" S.A.S.
9209 ;
CSO: 3104
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COUNTRY SECT?'ON ~ FRANCE
MITTERRAND INTERVIEWED ON CRISIS, PSF'S FUTURE , -
- Paris PARIS MATCH.in Frenoh 16 Mar 79 pp 50-53 ~
.
[Interviaw with~Francoie Mitterrnnd by Miohel Gonod and Laurence Maeurel]
~ .[Text] I~ was while returriing from Longwy, where he went
to, support��atid cheer up steel-mill workers, that '
~ Francole Mi.t~errand lenrned of the Chirac "coup" wi~hout'
gredt sua~prise. Since the day after the parliamentary
~ elections,~he had actually preaicted "the inevitable Con-
' grontation between Giscard and his former,prin?e ministex."
~ ~ A mon~h ago, the Social3st Party~ [PS] hdd aiready re-
. quested.the convocation of a opecial�seasion of ths
Asaembly on the matter of employment, but to.no ao~�..il. ,
~ In the minde of Mitterrand and hia follawera, thie ~~,me
~ i~ w~s therefora ~ppropriete for the PS, in~order~tc suc-
ceed, to join in ~acques Chixnc's initiative, which would
have been inconceivablo just a few weeks ~ago. Zn an ~x-
clusive interview on the f~ollowing pages, Francois -
Mitterrand ariswers the queationa which everyone is a~skiag'
about the crisis, unemploynient, government pol3cy, and ~
the recent and eurprisinq "nlliance" between tha PS and . , =
. , the RPR [Ra~l~.y for the Republic] He aleo explaine him- =
self at length concerning the future and hie party's ~
' ' divisivns, which particulmrly worry him on the eve of ~ ~ ~
" ~ the`socialist congress of btetz (6 April), and on the �
, . Union of the Left, in which he atill believes. It was at 1
' ~ his home~in ~arie on Rue de Sievre ~in hie office,�an ~
~ , nttic filled with files and books, ~lat Fr~1C0~8
~ : Mitterrand defined his poaition !or the PARIS'MATCH
- . ~ inquizy. . ~ .
,PARIS MATCH: You have joined witih the ItPR to obtain the convocation of a~
~ special seasion of Parliamant to examine employment problems. Are ~the _
limits of the�mnjority, or of the oppoaition, in the procees of chenginq? ~
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FRANCOIS MiTTERRAND: Our priority ie the fight againat unemploymez~t. We
oare little about parllamentary procedure ar~d whoevex takes the initi.ative
if we can help to rally public opinion aqainst the Gibrard-Barre policy of
, recession.
PAR'CS MATCHs Yet Mr Barre said Monday even3ng on television that progress
was being nwde, inasmuch as he has reestablished the balance of France's
= foreign trade. What do you think of that?
FRANCOi5 NIITTERRAN~: The foreign trade balance ie a very important factor
among the ma~or balancQS necessary, aince it determines the value of our
currency and reduces our indobtedness. In this Y'83P@C~~ Barre has been a
better manager than Ch~rac. But this result has been obtained only by a
receseion of our economy. With the motor of domestic producti.on running at
a slower rate due to lack of consumption and with im~orts conaideral~ly re-
ducad as a result, the balance fo~ which Mr Barre takes cz~edit is resembling
a atate of letharqy more and more: If I may say so, when nothing will be .
,movinq any longer, the balar~ce will be perfect. Industrial production re-
mains at the 1974 level. Everything is at a otandstill. The result: an
economic and a soc9.a1 crisis. And they will be amazed when the nation be-
comes annoyed. It seems to me that that is ~lready beginning.
PARIS MATCHs The prime minister also saids "Since 1958, there has been de-
colonization and the establishment of institutions. ~oday;it is a question
of adapting our economy to the world context." Do you share this analysis?
FRANCOIS MITTERRAND: If Mr Barre is te113ng the truth, what a condemnation
of hi~ predeceesors! What an officiaZ a~atement of failure for
' Valery Gisaard d'Eetaing, in chsrqe of making economic choices fQr 10 years.
Whatl They have finally noticed today, ar,d only today, the failure of our
~economy to adapt, and after 20 years of tt~1;. Ftfth Republic? i would like
to add that Mr Barre calls "adaptation" what is n?ost often only France's
submission +~,o tho international division of labor and production desired by
_ multinational capitalism. Rightist qovernments have already lost the battle
~of the computer, of the agricultural-food sector, af shipbuilding. TY~ey
~ are i,n the process of losing the battle of the iron and steel industry. It -
is 1^.iyh time that they dieappear.
PARIS MATCH: Mr Barre has also said: "France is now faced with the matter ,
of survival." Is this your opinion? '
~ FRANCOIS MITTERRAND: France cvill survive after Mr Barre, let him rest as- ,
� sured.~ And after Mr Giscnrd d'Estaiinq as well. I think that it will sur-
vive even better.
' PARIS MATCH: Cauqht up in its own internal problems, is it possible for -
- the PS to adopt a aufficiently detached position to malce an overall or
global analyeis ot the political-economic situation?
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FRANCOIS MiTTERRAND: i have constantily discussed national and world af- ~
fairs without limiting myeelf tio my party's internal d,ebmtea. Y clenounced =
the Chinese attack on Vietnam after the Vietnamese at~ack on Cambodia and ~
after denouncing ~ha regime of the ahah, 2 believed that the threat to ;
peace came leas from the Far East than from the events in Iran, where '
(necessary) revolution is taking place in one of the most sensitive spots "
in t.he world, where there is competition rc~r control of oi1 and access to
the Indian Ocean. I have vigorous ly alerted public opinion with regard to -
nuclear proliferation. And a11 in the name of my party. Just as 2 warned -
a vexy fragile Common-Market Europe against American economic imperialism,
among tnany other things. And i was not the only one. No, I do not believe =
that the PS deaerves thia reproach. _
~':+RIS MATCH: Isn't it surprising to submit a joint text with tha PC and =
RPR? - _
FRANCOIS MITTERRAND: In our opinion, the Eight for employment and for a :
change of policy precedes parllamentazy rivalries. ;
PARiS MATCH: Has Barre served his time, as some say? Should he leave7 ~
FRANCOIS MITTERRAND: Increase in prices: 10 percent per year. Before -
Barr,e, with Barre. Unemployment: one million more unemployed sinca :
- Giscard d'Estaing was elected president of the republic. Growth: less ~
than 3 percent per year when more than 5 percent is required. Those are
Giscard's results. We might really ask: What good is Barre? ~
- PARIS MATCH: Are you worried about the co;ning year? Could the Longwy �
situation be duplicated in other areas?
FRANCOIS MITTERRAND: I am concerned: unemployment can only rise. The ~
Giscard-Barre policy does not make it possible to reestablish growth at an ~
adequate level. This is tragic for production and for all the social and
human problems cauaed by this situation. -
PARIS MATC~H: If you were in the position of Giscard-Barre, what would you
do',' `
FRANCOIS MIT'PERRAND: This is a question which means nothing or evesything.
The political context and all of the economic measures which would determine '
the social pol~.cy would.be comple~ely different. I do not hav8 to put my- -
self in the context of the Giscard-Barre policy. If you read more closely =
the proposals which I will make at the Congress of Metz, you will find the
components of my answer.
PARIS MATCH: But if the left had won in 1978, would there be the crisis of ~
the iron and steel industry, the s trike of the SFP [expansion unknown~ and
1.5 million unemployed? ;
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FRANCOIS MITTERRAND: The crisia of the iron and steel induatry already ~
existed, but i~ would have been handled difEerently. I advise you to re~er '
to the Socialist ~arty's proposals under the title of "An Ambition �or ~he
Iron and Ste~el Ind~~~,stry." They were published recently. 51mi.larly, in
the name of my party I submitted a plan to fight for employment, which in-
volves a whole series of economic and social measures. Therefore, we wouJ.d
not be in the same situation. As for the strike of the 5FP~ i~ would have
no zeason for baing.
PARIS MATC~I: Would there be austerity just the same?
FRANCOIS MITTERRAND: There would not be any more oil in our subsoil, I ~
grant you that. But no national effort is possibie without social just~,~e. ~
PARIS MATCHs Do you think that there might be a"majority accident" which _
would cut short the existence of the current National Assembly? Do you be-
' iieve that there will be parliamentary elections before 1981? And if so,
wh~y?
FRANCOIS MITTERRAND: Immedia~ely following the election of 1981, I have no !
doubt of it. No president of the republic wi~i ;;e able to live with this
Assembly. But I do not rule out the case that parliamentary elections may
take place before, because of the ~iscard-Chirac rivalry. The majority ac-
~,.~'~dent is . likely and will be prereded by many skirmishes.
PARIS MATCH: In the event of a serious crisis, would you be willing to
participate in a government of national unity?
FRANCOIS MITTERRAND: A government of national unity generally provides a ~
~ camouflage for a rightist government when too many failures force it to ac-
cept such a situation. Only a world war would justify such a possibility,
Fortunately, despite the risks which I have mentioned, we are not in that
_ situationl
PARIS MATCH: At the congress of Metz, will tt~e future of Fren~.'z socialism -
be at stake?
FRANCOIS MITTERRAND: This congress is as important as the Epinay congres8.
Since our party was founded, this is the first ti.me that it is faced wi~
such a decisive choice that the future will be different, dependinq on
what takes place.
PARIS MATCH: This will therefore be a fight of paramount importance for
you and for you:~ party?
FRANCOIS MITTERRAND: For the Socialist Party, yes. For myself, no. At
Epinay, I had no thought at all of becoming first secretary of the Socialist
Party,.an unexpected situation which has changed my life--daily absorbing
_ tasks, continual trips in France and abroad and the necessity of devoting
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my time ~o building a party which has beco,~~ the firat in France. I did so
wholaheartedly, but after 8 years I aleo feel the ne~d to trans�er this re- ~
sponaibility to others. ~ would do so at Metz it ~ wer~ assure~i that the
pollcy o� Epinay would not be threatened.
PARiS MATCH: Which doesn't mean that you would leave the par~y, that you
would retire? ~ .
FRANCOIS MITTERRAND: I would not carry out the same role, that's all.
- PARiS MATCHs Are you among those who accuae Rpcard of a"rightist dri�t"?
FRANCOIS MITTERRAND: I do not accuse him of that. A party cannot be uni-
form. The term "rightist drift" is.a polemical term, intended to be offen-
sive. I,don't use it. But there is a logic in hiatory. The principles
defined at Epinay and observed aince then marked the anchoring of the So-
cialist Party in the cla~ssae of which it ie ~he natural repres~ntative.
- � As a result, it has rediecovered its authenticity. If it integrdteg the
ideas, eventa nnd hopes which ench day brinqa, I will be delighted. If it
allows itself to be awayed by Pashion, = will be worried. Look how the
right is reacting. Everything which is conservative in France ie wdtching -
for the least aign which could indicete weariness or retreat on my pdrt. ~
. t find that very normnl. It is.an honor for me to be considered the main -
adversary by big capital and by the riqht.
PARIS MATCH: Your alliance.with CERES [Center for Socialist Studiea, Re-
search and Education] is not.very well understood.
- FRANCOiS MZTTERRAND: 2 don't know what you are talking about. _
PARIS MATCHt It is nevertheleae your objective ally.
FRANCOIS MITTERRAND: ~ made an appeal for unity without excluaivity ecnd that
applied to CERES as w~ll as to oth.ere. But don't take that~for a proposa~l -
of a certain~aitudtion: that a~ppeal dates back to 8 Jnly. ~ ~
PARIS MATCH: And Pierre Mauroy? Do you atill have faith in him2
FRANCOIS MITTERRAND: It is one of my rules not to impuqn anyone working -
at my side and discharqing along with me the responsibility of tho Socialiat
Party. Pierre Mauroy and Michel Rocard are today at considerable variance
with me. But that in no way detracts from their good qualities, which I
recognize.
PARIS MATCH: Do you feel bitter, r~ngry, a feeling of ingratitude?
FRANCOIS MITTERRAND: Bitterneae, anqer, no. A feelinq of ingratitude _
sometimes. But I don't dwell on thoee things.
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PARIS MATCH: It is said that an agr~ement has already been reached for
unity around you at the congreas of M~tiz. Your moderatiun toward men who
have been critical of you for a year would tend to confirm this.
- FRANCOIS MITTERRAND: That's really rushing thingsl I want the most gen- ~
eral kind of underatanding. But in an atmosphere of lucidity. Two politi-
cal policies cannot be proposed at the same time. The Socialist Party ,
would seriously hurt itaelf in the process. It is up to the militan~s to i~
make a decieion. I have r9fused and will retuse to allaw a small circle of ;
~ initiates to replace them. ~
PARIS MATCH: To ba more precise, accordfng to this rough ~greement, you '
would continue as first secretary and Rocard would have the green light ~o i
be ~he ?S candic'iate in the nresidential 6lection of 1981. Is this a prob-
able scenario?
FRANCOI5 MITTERRAND: That possibility is not out of the question, no more '
than others.
PARIS MATCH: You have never thought ~f resigning after March 1978?
FRANCOIS MITTERRAND: We have qone from one success to another. Why resign?
Between 1971 and 1978, the Socialist Party has not stopped growing. And -
if, at the time of the parliamentazy elections, we remaine3 b~elow our hopes -
--and the polls, we were still the only party to gain in percentage, 4 per- ~
= cent.~ Then there were ths by-elections and we continued t~ advance. ,
I had no doubt of itl
~PARIS MATCH: Do you believe it is still possible to speak of the Union of
the Left while y9ur communist partners attack you every day? ~ `
_ ' ~
FRANCOIS MITTERRAND: Ev~rything depends on the way in which the situation
viewed. As a political fc~rmula fo.r c~:~se association of our two parties
nround a joint prc~gram, the Uiiion of the Left has suffered a blow because ~
~ of the communists. It has lost a qood deal of its credibility in pubTic -
~opiniori, which imp~.ies, and not without reason, that if there were~a major- '
ity schiem in the rnsxt~two years, it would be very ditficult to establi3h a '
coalition of the l:~i`t similar to that which we formed in 1972. But the ~
union of popular foz~;es, tra:islated politically into the Vnion of the Left,
stems from a very de~sp need. It is constantly debated on an electoral
level. Within the s.'ocialiat Party, we are all in favor of an agre~ment ~ '
with our partnere, an agreement which would leave no ro~~m for am~iguity; we ~
desire a treaty of nonagqression in the me~ntime. It fs up to~:he PC to
reply. What I ask of the Socialist Party is that it becomes, even more '
than it is now, the stimulua of.po~ular forces. If it does, it will win
- its h'_storic battle. And all of FrenGh politics will be organized around
it. Which is ona more reason why it should continue its political strategy.
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PA~tiS Mfl'~CHs On what basis couid a dialog with the c~mmunistig b~ regL~mnd?
, FitANr�'OIS MITTE RRANDt iti ig hard tio eay, since tihe PC ig unpredictiable..
For us i~ in aimple: on the ba~is of reali.t~.es. Whati i~ impnrtian~ to~d~y
i~ unemployment, r~eeseion, the des~ruction of industrial potiential and th~
ruSnatiian of certain ragions. Let us deb.~.~ ~nd tiherefore, let us cn~eti.
' PAR?S MATCHs Would you be nurpri~ed if George~ Marchats tie3ephoned you tio-
morrow marninq7 -
_ F'RANCOIS MITTERRANDs 2 wouldn't be e~irpriaed at anything. eut that ian'ti
likely, eince the PC'e n?~tin c~oncern ie not to have a c~reat Socialist Party
at its eide. S have nevar c~ncealed the contradictiion of our strategy,
which we realized immediatiely: the left was able to win only rhrough unity
~ and yet tha~ victory was conceivable only if the communist-sacial~~t ratio
' of power, formerly to the advantaqe of the communists, were reversed. The
PC, Y underetand, wns unwilling to accep ~ it and finally broke becauae of
the obataale.
PARi5 MATCH: Do you~ still believe today that the PS isn't able to win
alone?
FRANCOIS MI~TERRAND: Not yet. We are totally independent, or autonomous,
dependinq on which exgression you prefer. We are not askinq anyone's per-
miasion to act. But with 23 percent of the votea, as is the case at the
present time, no doubt more in June for the European election and even more
for the presidential election of 1981, I hope about 30 percent, this ig
not enough to govern alone in a democratfc country. A strong relative major-
ity would nevertheles3 considerably change the realities of French polttics.
We have not arrived at that situation. Our proqress is linked to the :Loy-
alty of our choices.
PARIS MATC~i: You believe that our foreign policy is "stale," that France
has something to say and is not sayinq it. Exactly what do you have i~t
mind? ~
FRANCOIS MYTTERRAND: Reqardless of haw you look at it, it is still a half-
baked policy. We ara not in favor of NATO, but we accept the measures which
reincorporate us into its framework=we are in favor of a new policy with the
Third World, but nothfng useful in this respect is proposed= we are in favor
_ . of disaxmament, but we participate fn rearmament= we are aqainst an ~ncrE�se
in arms sales, but we propose a tax on arms purchases and not on sales--be-
cause we are a selleri we preach noninterference in the affairs of foreiqn
countries, but we take part in internal conflicts which qive rise to theen;
we invent a European monetary system, but we neqlect compensatory amounts,
etc. Everything else is similar. The Yaounde debate held publ~c opinion
for a half-ddy, while the Phnom-Penh debate took years.
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PAAtS MATCH s~tipparen~ly you m~.ge be Gaulle? '
Ft2ANC0=8 MZTTERRANDs That'~ noti what r mgsr?.
PARTS MATCHs Kurti Waldheim, tt?e UN Bearetary general, says that the world
ig gcing through the most serioue ori~ig ~ince tl~e Cuban affa~.r in 1962.
is that your opinion al~ao7
~'RANCOIS MITTERRANDt i think he is right. ~
PARIS MATCHt Ax'e you peesimiatiio?
F'RANCOiS Mi~'TERRAND: i am not a forturie tell.er. But we must understand
that an atomic war is paeeible end thati if no qreat ideas and no great _
proqsam ia implemented for tihe peaceful organization of the world, it ia
= doomed. Par~:~.cularly as a resuit of the proli~vration of atiomic weapona.
- Neither Teng Hsiao-pin~ nor Srezhnev nor Carter wantg a world war, of course,
_ but the stockpiling of arms, irrational antagonisms and the ahrinking ei~ce
of the planet are bringing us closer to atomic war, unless We do not
note that +~rhe greet powers of this woxld are aware of thia "unlees." Yet a
man like Hrezhnev is a man of peece, I believe. China is not an offensive
Qower. Cartex is certainly a qoad man, with no thoughts of fiqhting it out.
But apparently no one feels that something u~ore must be done if war is to
be averted. -
PARIS MATCHs What are some of theae initiatives that you want7
FRANCOiS MITTERRAND: A Leag~ae of Nations was orq8nized at one time, but '
~ that did not prevent war. The United Nations needs to ur~derqo a transfor-
mation. i do not seek a directorate of qreat pawers, Lut those with aupe- ;
rior azn~s ehould understand that they must proceed boldly with disarmament ;
and that a policy of atomic nonproliferatfon must ultimately be iug~lementec3.
Arbitration must become obliqatoxy. The Court of The Hague is na+ of iaar-
ginal importance and ye t it dominated the thouqhts of inen of progress not
~ so lonq aqo. The great idoas of arbitration and collective security are
qrowing clim even while the urqency exists.
PARiS MATCHs You mean that there are no more barriers, no more judqes? '
FRANCOIS MITTERRANDs There are some wise men. Do they have ideas? -
Couraqe?
PARIS MAT~Hs Fraa time to time, do you feel like retfring from political
life?
FRANCOIS MITTERRANDs What man of action doesn't think of that?
PARIS MATCEts To write booka on eubjects which interest you?
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FRANCOiS MiTTERRAND: Evezything intieregte me. Buti wri~.ing, like the reat
- of iti, is a victory in itisel�.
PARIS MATCH: Lese than poli~ic~ sometimea?
' FRANCOiS MYTTE1tRANDs No doub~ I am mad~ fnr pnlitics ra~her than for
- writing.
' COPYRZGHT: 1979 par Coqedipre~si! SA ~
11915
CSO: 3100
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COLTNTRY 3ECTION FRANCE
_ j
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~
aYSCARD-Ct{IRAC R~CUNCILTATInN HTNT~D ~ _
~
Pa~ris PARYS MATCH in F~ench 30 Ma,r 79 pp 46-47 ~
_ i
~rticle b Michel Gonnds "Pea,ce Soon BetWeen Chiraa and
aiscard?"]~
~ext7 Ve,aery Giscard d'Egtaing aad Jacques Chira,c are~~ going ~
to meet soon. All the conditiong are ~ulPilled ~or the Ga,ullist ,
lea.der to go and smoke the pipe o~ peace in the b;g chief's :
- aigwam. The latter r+anta to and Chirac expec~ts t~, The last ;
time they met in November~ they spoke for 45 minutes about, the ~
excavation of T~es Ne,lles and nothing else. Since then much ;
troubled water has run under the bridge oP the majority. La,st _
month Claude La,bbe, invited to the Elysee as chairman of the ;
~tPft ~ally tor the Republi~ parlismentary group,told Gigcards ~
"Mr President, it is imperative thet yau meet Ja,cques Chirac." '
Claude Labbe did not beet about the bush. Explaining to the ;
_ .presic~ent tha~t one could not speak seriously of reconcilia,tion '
in the ma~ority as long a$ Chirsc would be deprived o~ the ~i-
respect due his present snd past qualifications~ he ha~d sf-
firmeds "without us, there is no parliamentary mn~ority conse-
quently withoui: us there is no government. Therefore it is
- unusual that the lee,der aY our movement is never consulted. In i
nddition~ Claude Lsbbe had sdded~'we are tired of hesring the
prime minister speak scornPully of the politica? order, as if !
he wa,s not part of it. I~evertheless, it is the R,PB Which oY- ;
~ered liim a district in Lyon ~here he could heve been el~cted ~
essily. ?
- ~
It is quite probsble thn~t this speech did not please Giscard, ~
' but he did not indicate it at all. Realism in politics must
dominste feeiin~s. It must be beliQVed that Labbe probsbly ~
has been hesrd, aince today GisCard declares thnt he is resdy
"to console those who think they are su~fering." The Elysee
~eclares thst the president rioes not intend to "play on a split
in the RPR" (and still, one conPides how essy that aould be...)
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nncl thnt, n~t nny r~~tQ, new electinns wi11 not do ~rance t~ny ~
qoo~l. In ahort, it is not th~ ~ren,t love, bu~t honest cohabita-
tton. The l~istory oF relr~tionq between Giscar~ nr?d Chirac
rema;.n~ to be written. Lilce in n.ll rn.s~ions, sombor pagQs
would b~ mor~ numerous t}tc~n the rosc-colored pn,~es. 'Itemember
Atnrch 1976 aftor t}ie cnntun~l elQCtions: the I~eft swept up
the bi~gest stake. Giscnrd spe~,lcs to the I~'rezch. IIe is sad.
ll~ annaunces that Chirnc will be tliQ coordiciatcr of the m~jor- -
' ity Prom now on. That will then ~o from b~d to worse, until
_ th~ spectacular resign~,tiott of C~?i.r~.c 4 months later. Three -
ye~irs h~,ve passed. I~ere we are ng~iii on t}ie eve o~ the cantono,l
electinns. The politicat situation hus c}~an ed. It h~.s ~levelored
in n~ rat}ier Pavorable c3i.rection f. or the U1)F rench Democratic
Unior~,]. The results of the first round of the c~.ntonal elec-
tic~ns indicate it. With its thousand candidates~ it obta,ins
21 percent of ttie votes, which would pla,ce it aheacl o~ a11 the -
pnrtiQS, if we made a transposition on a natinnal scale. In
f~ct, t}~o PS had the best score with 27 percent of the votes,
but it fielded 1,600 candidates, 600 more than t~ie UDF. As
;;:j for the RPR,it main~ains itselP at its 1973 level with 12.5
percent Por $00 ca,ndiclates. Under these conditions, Giscard
can t~,ke a step in the direction of tt?e Gaullists without ap-
pe~.rinR to ~ive in to the latter's demnnds. For contrary to
a widely held opinion, t}?e cliief of state keePs himself very
well informed. about politicians' maneuvers. 1[e knows very well
~ what~ is happening in thc group meetings and in the corridors
oY t11e Yalais ~3ourbon. He knows very well that the breaking
point had almost been reached on the second day of the special
- session of Parliam~nt when Chirac, attacked verbally by the
sociiilist~Georges Fillioud~ was not able to answer because ti~e
President of the Assembly hacl not opened tlie microphone bePore
w}iich he ha,d ~one with great pains to sit down. At that
minute~ everything almost collapsed. Pierre Messmer admi~:ted
it l~ter: "I was at the point of voting censure to protest
agzinst the divisions of tlie majority and against the complai-
sance with which one e1loWed the RPR to be insulted by the
oppositxon."
- The second round of this special session will tnlce plr~ce in one
of tt~c two investigative committee~ set up on the demand of the
Gaullists: the committee instructed "to collect the facts re-
~ ~;nrdin~ sources, organizations s~tt~ meuns of diffusion of Pub-
lic inY'ormation." An extensive progrnm: In the RPR, they
amiigecl themselves by draainq up n list of government disorqani-
zation on the subject of inform~.tion. The compensating umounts?
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;
Tha minister of agriculture s~,ys: "The problem iq not so.lved."
'rhe ehiof nf state declnres few days later: "It is solved."
The iron nnd steel. industry? Who can gay today how many 1c~y-
o:Pfg tt~oro wixl be after the ma,ny nnd cnntradictory ofi'icial
statemc?nts. The tiabili.ty tax on wealth? The U1)r initiates '
~ the bitl with the support of t}?Q minister of Qconomy~ but the
primQ minister oppoges it. The price of gasoline? Atonory an-
nounces last fall thnt it is going to drop and Tlarre says the
- opposite. Tha S~'Y ~xpansion unlcnown7? The prime minister
. say~ at the hTL ~xpansion unknown7 microphone: "I have seen _
t}~a file at closo ran~e and I declare t}iat if it wes openQd com-
pletely the.re would be no lack of sensational suUjects." Then
nothing more. To those who want to ]cnow what there is in this
famous file, he answerecl solemnly: "Impossivle, it is not in-
tended to be published." In fact, wha,t is being concealed in
the n~me of no lon~;er v~?~d principles~ i$ ~L generalized decep- ;
= tion. TherQ are 30Q offici~,1 vehicles for 3~000 employQes; '
t}iere nre extended ostimates; thefts of equipment (cables, cam-
ern.s). One mentions, amon~ other things~ the exorbitant cost _
~t nn introduction for n broadca.st of Antenna 2: the SFP invoices _
~ it n,t Pr 300~000~ when private company had offered to do it _
for I~r 18~000. There are ~lso an impressive numbQr of temporary
worlc~rs who cost two t~nd on~-half times more th~n the ent~r-
prise's ssla,ried personnel. There are finally th~ fees pe,yed
regularly to people who do not have anything to do with tele-
vision. There are the sensational subjects which Raymond Barre
hn.s kept fo:^ himsel~. _
The investi~ative committee h~s plenty to do if it we;nts to try .
to fincl out why tl~e French nre underinformed, when they some-
~ i,iMes feel bludgeoned by the media. It is not enough to ~o _
look under the stones, it will be necessary to,say why and how
certain things were concealed there. "It will not be a. revo-
~ lutionary court," Claude L~.bbe Narns in the name of the
Gu,ullists. IIesides, the approe,ch to tt~e problem is not the
same, according as one appeels to the R1'1~ and UDN which share
the lea,dersha.p o~ the committee. A Giscard leader pointed out
tho other de,y to dampen the ardor of the Gaullists: "Is it not ,
Jacques Chirac, wlio announced, on returning from his trips
abroad, some fa6ulous contracts we tiave not he~.rd enything about
since? Is it not he and his circle w}io concealed from France
the gravity of the disease which was to cruelly carry Georges
Pompidou e.Nay?" The R~'ft~ on its part~ will not limit itself to _
demonstrsting that public information circulates poorly because
oP incompetence or because of inconsisten~y. It slso Wants to
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~loinonatrc~te tlini; itntiGciul].ism prevai.is in somc~ etlitorin,l stnffs,
oqJ~ecx~til.ly i,r.lovisiott ztincl raciio. Jr~,cques Chirac is tiars}i on
t~l~is miLttQr. "I r~m the vic~tim of ne~v gang ot four, he dQ-
c.l~irecl the o~her day nn u tolevisio~i stago. Tt is made un of
~;lie lluhamQl brothers, rtougeotte and l:l.lcabbach."
CUY'YltT(iHTs 1979 by Co~edipresse SA
~490
CSO: 3100
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OUTISNE FOR A NEW NATIONA7~ ECONONQC POLICY
~ Paris F'UTURIBI,ES in ~ench Jan 79 pP 53-65 '
i
(Interview with Chrietian Stoffaea, adviser at the Ministry of Industry, by !
~ (i~y Poquet: '~For a I,iberal-Oriented Change in the Econo~y"; place and date ,
not g3ven] ;
rText] After the great eleetoral fright of M~rch 1978 ~
the French leaders decided to 3nitiate a process for
the tranaformation of the French economy. Indeed, they ,
acquired the convict~.on that France's econo~y must be
the sub~ect of a far-reaching liberal~�oriented change =
,
wh~ae source of inapiration was to be sought in the German ~
~ model, that is, limited intervention by the government, ~ ;
' increased competitiveness of firms on international mar-
kets, ne~tional conaensus and little challenge of work
related values, but especially acceptance by employers ~
and trade unions of a certain degree of concertation which ;
ce~nnot occur without ef~'eetive decentralization of decision-
~ making both within businesses and pol3tical institutions. '
. But in F~ance is such an or3entation compatible with the
mentalities, the structure of the economi.c apparatus, the :
cugtoms acquired by the public administration and busi-
- neas executives for decades? Christian Stbffaes, adviser
of the Miniater of Induatry,* author of '~The Great Indus- ~
trial Threat," a work in which he analyzes the ne~w dimen-
sion oP 3.nternational economic relations s~nd the strategies
that fl~ow from it, explains here the ne~w lines of French
economic policy. ~He underscores in perticular the consid-
erable efforts which French industry will have to deploy
to read~ust itaelf to international realities and the at
times socially painful measurea which those reaponsitle ~
for economic policy will have to take in order to organize '
~
~Christian 3toffaes is head of the Studies and Planning Center at the Ministry
of Induetry. ,
~
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the eountry's activities on the be,sis of the d3ctates
of the new Saint Simon-iat doctr3.ne.
Howevei�, whi].~ a certain degree of
consensue pointg to
~he need for read~u~tment of the French econotr~y, ~ 1.0~
is needed for the approaches of ~�~~.riou~ economiats to
- converge~ 7'hat 3s wh~r~ to throw ~ight on the impor~~n~
debate ~hat has ~ust opened, FUTURIBLES asked Jean
_ Matouk, professor of economi.cs, for his thoughts on
th~.s economic pol.icy~ For Me~touk the lat~er ia danger- -
ous because it leads to ~xplosive grawth which from an _
economlc and social. viewpoint i~ untenable.
Question: France's means of ~d~ustment to the new internat3onal economic _
real.ities are now e~t the focus of a debate among economiats. The dom3nant
_ spirit among economic policy-makera and which you defend is that of a return
to liberalism and a competitive economy. Yet, voices continue to strive to
~heck the damage of an internationalism deemed to be both archaic and domi-
nQted by the multinational corporations. Why do you re3ect such an analysis?
Answer: Even if it is arbitrary to~place limits on progreasive signs, the
- internationa].ixation of the econon~y is a relativel.y recent phenomenon which
has characterized the preeent era for several decades now. If we consider
the trends that have been in evidence for the past 30 years we find that we
_ have gone beyond a further stage since 19?3 and that itself has changed the
n~ture of the problem. The emergence of the Third World as well as the domi-
nation of international trade by some countries and their multinational
corporationa present particular challenges to the French econotqy whose period _
of read~ustment will certainly be long and painf~l.
In the face of such a situation the temptation is obviousl,y great to brake
- the painful ad~ustment procese. But in that case would we not run the risk,
' having~2 million unemployed in 3 to 5 years, witness runaway inflation, and
witnessing all the same in the last analysis the bankruptcy of importiant
economic sectors which lose their competitive position? It 3s hcntever pos-�
sible to discuas the option between free trade and protectionism. I would -
rather characterize these as offensive and defensive policies, for they do
not boil down merely to a policy involving the opening up o'r closing of
borders. Rather, they concern a country's entire economic policy, that is,
measures of economic reactivation,.the control of equili'briums at the macro-
economic level, as well as measurea involving the structures of' all sectors
of the econot~y.
The choice favoring an offenaive stance can be defended as follows: First
of all this option hQS succeeded for sane countries. ~ermany and Japan are
two such models. They have treen able to take the�path of international~.za~ion
by specializing in innovative economic activities and those with a large degree
of value added~ by reducing their investments in short order in declining
- sectors, and by uaing a whole series of atructural techniquea. Such a strat-
egy is thus possible.
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~ ~r~r~, Frr~nce extremel,y dependen~ on raw materials . It 3mports such
pr~mary producta to the tune of 100 bill.ion French franca a year. Sinee
the economic independence of the ~hird WorZd entails a strong tendency for
pr3.ce r3ses ~.n this cori~~ct~.an, the bi1.]. tha~ ~'rance h~s to pay threa~ens
to become ster~dil.y highQr: Yet, such s bi11 w~.11 indeed h~ve to be paid
if we wish to bring about far-reach~.ng ch~nges 3n the daily liyes of the
F`rench people. We do no~ alwaye gauge c~earl.y wYiat our civillzation owes
to the abundant supply of energy. The p~yment of ~his bi11 can be effected
only through the export of our manufactured products. Tndeed, deapite the -
effort in the direction nf greater competition and higher productivity which
stil.l remaina to be done, our agriculture w~.ll be unable to compete with the
extensive agricultural sectors of the new countries and we ahall thus be
unable to export large amounts of agricul.~ura1 products. ~'he same is true
of services~ We ahall therefore h~ve to place oi,:r beta unquestionably on
manufe~ctured products and this option necessarily 3nvolves an opening up.
For the protectionist atrategy would entail. retaliation by our trading part- -
ners. It is well-known that a cut 3n imports 3nvolves a reduction of exports
through chain res~ction whose model was provided by the depresaion of the i93o~8.
- Final],y, for many buainesses the aize of the French market continues to be too
small to be able to achieve speciallzation and efficient production nosta.
There ia of course the European alternative propoaed by Jean-Marcel Jeanneney. :
French industry being overly integrated into the European market, no longer is
anyone real~}r naive enough to believe that protectionism within the borders of
- F~ance is posaible. What is auggested, then, is protectionism at the European ~
level. One should not forget, how~~ver, that Europe, like France, is highly
- dependent on raw materia,ls and one again meets the problem mentioned earlier. ~
Flxrthermore, there are c~ivergences of interest among the European partners:
To be persuaded of this one need only consider the negotiations in which .
Germany, alreac~y highly integrated into international trade, ia opposed to
the relative protectionist measurea proposed by France. -
Yet, valid axgumenta could be advanced in favor of a defensive strategy. '
The first liea in the difficulty of the change to be brought about. The reces- ~
sion that we are experiencing ia one of long duration which mand~tes unpopular
measures, the closing of many concerns with marginal efficiency, fRr-reaching
changes in the policy of territorial improvement in which some regiona will
suffer particularly from this crisis of redeployment. It seems to me that it
is on this politicQl and social obstacle that we run the risk of atimmbling
most of all. Will the important changes prompted by the recession not frus-
trate the policy of acl~justment? In other words, will tY~e benefit match the
cost?
The aecond argwnent involves risk. To follow a strategy of international
integration obviously signifies becoming dependent on the world. During the
' depression oP the 1930's those countries which auffered most from the drop in
international trade were the ones which were the most highly integrated and
the most industrialized. FSrance's relative stability at that time was probab~y
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due to 3.~s protection~.ttm whereas the excessive ~.titegrc~t3on of Germany (which
had a 40 percent unempl.oyment rate in i932) and the risks taken by that;
country dur3ng the same pQriod were par~ly responsib~.e for ~he consequencea ~
with which we are familiar. The ~uestion ~oday ~.s to know whether the risk =
po~ed by integrat~.on ~.nto international tracie 3s credib~e in ~he long term.
, The procesg of internutiona13.z3ng ~he ecor .~~~y ~nd ~;he emergence of the Third
Wor1.d will certain~y engender countervai].ing shocks~ Some countries w311 be
unabl,e to atand them and wil]. choose to withdraw on themse~ves. Br3.tain or -
thQ United St~,tes, for example, thus threa~en to adnpt defensive strategies.
. But there wi1.1 certainly always be a core of countries that wi11 play rhe
game of 3nternational tr~de and thoae wi1.1. 3ncrease ~he~.r power and their
revenues: (~ermany, Japan, Brazil, ~nd China today fa11. in ~that category.
One should not eonceal the fact the.t auch a pol3cy entails risks, but I
believe that they are fairl,y modera~te on the whale.
Finall.y, the third argument f-~r a defensive economic pol3cy is tradition. The
era of the opening up of borders during these past 20 years is unique in our -
history. Francs's protectionist traditions unquestianably go back to the
passage of the Civil Code and the distribution of agricultural land among a
large number of small landowners. This agricultural protection3sm, which was
very pronounced, by the same token engPndered partially protectionist attitudes
- in other sectors. Naw, despite the country's modernization the problem con-
tinues. Few French people wish to expatriate themselves, so much so that '
French firms are obliged to pay very high compensation, compared to Germany or
- the United States, to those who agree to work abroad. Th3s is a significant
fact which proves that we are not yet very wide open on the world.
These, among others, are the various sides of the debate. It is a full-fledged
one since what is involved is choosing between political power on one hand and
- income or quality of life on the other without forgetting that the latter would
be effected at the expense of income and consumption but also of political
influence. Indeed, the country which withdraws on itself in the economic field
is no longer capable in any way of pursuing an effective foreign policy. Gera?any
and Japan begin to offez~, by way of contrast, eloquent examples despite their
demtlitarization.
Que~tion: 2'his strategic option is obviously suggested to yr~u by the diagnos-
tic that you make of the recession. For you, in contrast to the 1930's, this
recession is not macroeconomic. You have indeed asserted that what is involved
is a cybernetic recession of the decision-making processes in economies that
are open to the outside. What does that mean?
Answer: The causes of the existing recession in some Western countries are to
be sou~ht in the manner in which they make their decisions. The depressioz~ of
the 1930's challenged the traditional dogmas of classical economic theory which
postul~ted that equilibriums are automatically restored following periods of
in3tability. It is John Maynard Keynes who demonstrate~ that eguilibriwn at
the fl.ill employment level does not flow necessarily from the free forces of
the marketplace. Bu~ his ideas took several years to became accepted because
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a complete revolution of minds was neceasary. The Keynes3an ideas wh3.ch we
h~ve fol~owed for the past 30 years and the ~.ibera7.3za~ion of 3nternat~.ona~
trade are at the or3gin of the increased mass conswnption and exceptional ~
grawth levels that we have experienced. Even though the presen~ recession
is nat of the same order of magnitude as the depression of the i93o~s, we are
nevertheJ.esa invo~ved 3n a 1.ong-term recession from which countries are
emerging wtth trore or less success. Before i973 one could see a certain con- ;
vergent trend among Wes tern countries : Europe was catching up with the Un3ted t';i;'';;;;''�" '
,r~,~,r. ~n~1
States wh31e Japan was catching up with both of the former. It was thought
that structures were gradually going to resemble each o~her more arid more.
Hrnaever, since 1973 the Western world aeems to be on the way to becomi.ng more ~
heterogeneous. There are now several typea of Western countries and this 3dea
is beginning to be reflected in the collective terminology. There is talk of
the lead group, the bottom group, and naturally the middle group in which
France finds itself--at thia time~
Why these differencea? Ths ana].ysis of the economic organizationa of the
various countries, of their success or failure, takes us beyond Keynes. -
Macroeconomic techniquea and policies of economic react3vation are in fact
no longer sufficient to restore equil.ibriums. This is very evident 3n the
- case of Britain which has auffered fram an excess of Keynesianism in the
past 30 years and in the case of France where policies of Keynesian economic
- reactivation have stumbled on the catch of foreign bargaining power and the '
fatal "stop and go" system. That is not surprising: Economic reactivation
and the poliay of high employment che~k gains 3n productivity, make possible
the survival of inefficient production units, and undermine the competitive- -
ness of an econot~y, thus making it unsuitable for international trade.
~
Tn contrast, the acceptance of a certain limitation of potential growth, that
is, a policy of controlled grrnath such as that which Germa,ny has been pursuing
for the past 15 years, permanently forces the production appaxatus to be com-
petitive, makes possible the automatic elimination of marginal. firms, obl3ges
businesses to make investments to achieve greater productivity, and finally
provides long-term assurance of sounder growth. Desirable stabilization policy ;
is that which conaists in pursuing economic growth following an upward slope ~
that 3s always slightly lower the,n maximum productive capacity. ~
Finding a way out of the recession thus implies an ideological xevolution of .
_ the same type as the Keynesian revolution, and it could be called a revolution
in industrial policy. Concepts are to be reviewed as is the operation of the
decision-making processes in industry. The long-term policy has to be pre-
- ferred oyer the ahort-term one. A government which ~ursues a policy of con- ~
trolled growth is obliged to accept a level of unemployment slightly higher
than if it followed a full-employment policy, and obviously what is involved
there ia a difficult trade-off in a democratic political system. One may
wonder in this respect whether countries such as Britain or the United ~tates '
are not suffering from a democratic system incapable of highlighting the
benefita of long-term policy: The Keynesian techniques of ftiil.l-employment
policy, used by American Democratic Party officials as well as those of the
British Iabor Party to reactivate their economies, have a11 ended up in
failures.
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rt ia al~o appropr3ate to review government-business rel~tions, A].1 govern- -
men~s intervene in the economy and al~ pursue an ~.ndustr3al policy, even 3f -
~he term has a bad press. But the3r economic models are very different, -
These differences must be analyz~d and one should question what is done in
Lhe real.m of' conversion, support to sectors i.n decl3ne, and advanced tech-
nology pol3cy. With3.n the economy the int~:i�~~elai~ions between distribution `
structures and industria]. production structures also deserve thought. Let
us take by way of example the role of multinational corporations: Germany
- and Jape~n both possess powerfltl international networks of business firms
wh3ch perme~nently provide inputa to their induatrial setups regard3ng demand
trends, relevant markets, promiaing sectors,~new sources of compet3tion, and
other data. It is in this connection that one can truly talk of cybernetics.
These multinationals are inc3dentally different in the two cases. In Jap~n
they are integrated 3nto the ma~or groups which use them as instruments for
controlling the economy over-aLi. In contrast, in Germany fairly independer.+.
concerns may be involved which have contractual relations with small- and
medium-sized businesses. I believe that these multinational corporations
represent an essential means to bind the fabric of the sma11- and medium-s~.~ed
- businesses to foreign markets. These amaller .firms, lacking the financial
means or the critical volume to be able to afford commercial networks abroad,
should take advantage of collective structurea of this type. Yet, there is a
total absence of such an arrangement in Fz~~n~^~. It is necessary to find anal-
ogous ones adapted to our industrial model.
Additionally, it is necessary to review the structure of our econo~y and the
respective roles played by the ma~or groups and the small- and medium-sized
firms. The possibilities are several. For example, Japanese industry is -
organized around four ma~or conglomerates which, either through their direct _
affiliates or through their subcontracting network, control the entire economy.
In contrast, in Germany there is a much more liberal structure in which the
major groups coexist with the independent small- and medium-sized businesses.
Fiiiancing structures and the role of banks also assume considerable impor~;ance.
In Japan banks are the industrial policy instruments of the large concerns
while in Germany the banks are much more decentralized. In France this banking -
structure, undoubtedly too highly centralized, makes the funding of small- and
medium-sized firms difficult. Finally, while in the 1960's we effected a cer-
tai.n amount of consolidation, this has often ended up establishing conglomerates
without true 3ndustrial rationale rather than with vertically well-integrated
channels. _
Before 1930 it was the reign of the microeconomics of Adam Smith and of the
classical economists that held sway. Keynes then taught us the science of
macroeconomics and the techniques of aggregate intervention, but he did not
speak of industrial policy. To offset the recession, I believe that we should
now concentrate on an intermediary level, that of economic sectors, of the
linka~es among economic units, on whe.t we now begin to call mesoeconomics, use
the best that competition has to offer, the most efficient thing that govern- I
ment intervention provides as a function of our traditions and national peculi-
arities. The market econo~}r is a conceptual abstraction which does not have
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the same meaning in Japan, ~he Federal Republ3c of Germany, the Un3ted Statea, ;
or the Third Wor1d. Let us know how to invent a French 3.ndustrial model.
= Queation: The great dependence of France on raw materials is aggravated ~
according to your ane~lysis by the fact that French 3ndustry has not achieved
the critical volume to fight compe~3t3on. Compared to the resources availabJ.e ,
to France, does this not constitute a handicap that 3s truly diff3cult to
- overcome? ~ -
Answer: We are considerably behind, and catching up 3nvolves unempl.oyment,
structural. changes, geograph3c changes too, and thus time and suffering. :
The French are surprised that after 30 years of very strong growth things ~
shoul.d deteriorate. But the growth levels of this period were poss3.ble only
by virtue of our enormous lags of productivity in agriculture before. An ~
entire boc~y of underemployed laborers in that sector turned to industrial
work during these 30 years~
We have experienced some industrial success and France is beginning to carve
a niche for itself in some international oligopol3.es. In the automobile '
sector, for example, we occupy first place on the European market. We are
also very competitive in the aeronautical and professional electronic sectors
in the world market. However, we in fact lack critical volume in many sec-
tors and this is what determines the nature of the effort that we must under-
take.
It will be necessary that we concentrate more sume of our production in ma,jor
French multinational corporations. To be sure, economic concentration is not .
a panacea, and in those sectors which have a highly fragmented market--for
example, machine tools--this does not represent a sound solution. In such ~
sectors which are the most numerous, small- and medium-sized firms excel and, ,
while continuing to be small, can easily become competitive at the intex-
nat3onal level. In contrast, other sectors mandate larger size--such as in -
the chemicals aector or in the agro-food sector. So far in Fr$nce we have
atrived especially to do business in agro-foodstuffs through cooperatives ~
whereas this sector with advanced technologies, marketing and distribution ;
networks at the international scale.... It is truly scandalous that we used ;
to export unprocessed agricultural products abroad and then imported them in ,
processed form at three times the cost. That is why future structural policies
must contribute both to reinforce the ma.jor groups in some particular channels
and to improve the environment of the small- and medium-sized firoas to enable ,
them to better play their role in the redeployment process (financing, export,
ensconcement abroad, and so on).
Question: Is it then a matter of making businesses once more the principal
motive power of economic activity?
Answer: �recisely; responsibility for redeployment is to be placed on busi-
nesses. ~n part we must seek our inspiration in Germany which has a model
that ~~rresponds fairly closely to our European temperament. This means that
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it io necesgary to re~tore much more ~u~onon~y to bus3neg~ee ~nd to consider
them as esg~ntiaL ~rganizat:tons for BC~Ciety. An analogy i~ m~d~ with ~conom3c
wt~rfar~: In this vi~w bus~ne~s~a are the ~rmi.es ~nd the body social should
pamper th~m ~s ~.t used to pamp~r th~ arn~y century ago, Con~~quently, with- .
ou~~ ~peak3.ng of exempting them from taxation it is appropriate to mitigate
th~ Con~traints wh3ch burden them~ 7'h~ au �~nces to be achieved in thi~ fi~ld
ar~ not ~.~cking, al~. th~ mor~ ~o ~s th~ Frenc:h do not yet have an indugtrial
mentality, Having experienoed indu~trialixation gomewhat reLuct~ntly, the
French still look down on,industry and vi~w businesses a little like defend-
- ants~ I1; ~.a neces~ary that we ~merge from this M~nichean attitud~ ~nd make -
of bus~ness firms place~ of soclal cnnsen~us. To libErate busin~ss~g does
not signify to return to the liberal patt~rn of the i9tn century 3n which the
capitalists could flo what they 11k~d but to tran~form th~m intn genuin~ hum~n
_ cortQnunities where power and deciaion-making would be ehared ~.nd delegated to
a much greater degree. At all levels of the hierarchy and 3n a1.1 sectors af
nati~nal ~.ife, notably the edueation~l system, it should be necessary to ceas~
considering the induatrial firm as a place of exploitati4n, even a certuin
form of hell.
That is possible and countries such as Qermany or Sweden huve pointed the way:
There the s~read of incomes in indu3try i~ much narrower than in ~rance, t;he
decentralization of decis3on-making and the placing of responsibility at all
levels of the hierarchy are much n:ore evident, and forms of ~oint management
are beginning to be introduced. We must look to that alternative and ther~,
too, one can talk of cybernetics. In this case it is Marx who nhould be left
behind: The system of production can nn longer b~ the privil.:oed domain of
- the cl~s~ struggle and exploitation but contrariwise the place of industriul
democracy. It seems entirely possible to me to conceive self-managed and yet _
efficient businesses. While self-management often contradicts mobility end
efficiency, that i~ because the need for security constitutes an important
element of huaLan nature. When individuals express their aspirations they
often ask for security in the first place. It is easy to see that it is th~
- public and private enterpriees which have the greatest atnount of difficulty
in read~usting because it ie more difficult for them to lay off workers, to
reshiaff].e work stations, to muke their manpower mobile, and so on. That ia
- why one of the essential tasks today is to seek methads of ~workerJ partici-
pation and self-management compatible with mobility and efficiency. If the
laws of the marketplace were allowed to operate with all their force While
spreading modernization, ad~ustments that hav~ to be accepted in some cases,
that is, would they not learn better that the long term cannot always be
sacrificed in the interest of the short term? It is for this reason that
De Tocqueville re~ected political democracy in the l~th centurv. ~{oaever,
political democracy has given evidence that it is able to make long-*,erm
choices. Why would the same not be true of industrial der.wcracy?
Qucstion: On the basis of the strategy that you have ~ust outlined, which
m~,jor alternatives would you advocate for F~ance's industrial policy?
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An~w~r: Thie pol.~ey~ initiated in part 6 month~ a~o, n?ust r~r~t of aii n~
a policy of lib~ralixt~tion and of making bu~in~ss~~ mor~ r~gpon~ibl~. Th~
po~.iey mu~t algo m~k~ 3t possibLe to r~medy the structural ae~kn~sgeg of
the Fr~nch ~eonon~y. 7.'h~ ~ov~rnm~nt ~t~n p~ay a ro~p in th~ ~limin~t3 of
num~roug archaic fe~?~ureg wh3ch 7~L1bg~.St~ but it ie now ~.ppropria~~ ~o con-
si8er that priority mugt d~volv~ on indugtry. Ind~~d, som~ of ~h~ w~~kn~sg~~
~ of th~ 3ndustria]. s~ctor are c~ir~~t],y conn~~t~d w3th th~ prote~tionigm pur- -
_ sued for 30 y~are now in oth~r sectora.
~lddition~ll,y, m~asur~s ~r~ certain~.y to b~ tak~n in th~ b~nkin~ s~ctor. Th~
b~nks ~till ~v3d~nc~ too many conaervativ~ behaviorc~l e~gp~~ts, putt3ng too
much stir~ae on guarant3eg and dr~wing back when it come~ to ~~suming indus-
trial risk~. Thig steme in p~rt fram imperfe~t cdmpetition ~mong b~?nkg ~?nc~
such deficiency is incidantal],y imputab].e t,o th~ gov~rnm~nt and its system `
~`3 of regulating crediti and the f3ne~naia]. market. It is thus n~cesgary tio m~ke _
more flexible the rules of competition among banks by eliminating their
cartel-like aspect, that 3s, by insurin~ the main~en~nce of large nat3onal
banks capable of having networks abroad and by increasing th~ nua?ber of
regionat and local be.nks which are not reapoc~sible to central organs and
which could aseume risks more easily, even at the price of bankruptcies in
case of unw:se decieiona. We in Fre?nc~ liv~ wSth the memoriea of th~ trauma
of the pre-World War II financial acandals and that is one of the re~sona ~
~ which explaina the strait~acket of regulations which limita recourse to the
- savings of the public. If the price to be paid is the difficulty for smaLl .
and d3msaiic firms to secure credit, I believ~ that it is an exces8ive one:
The borderline bett~?een bartking risk and industrial risk is bad~}r positioned.
I return to the liberalization of firms in order to mention that this cannot
occur without e~ liberalization of the conditions of dismissals. To mitigate
the rules in this area means to improve unemployment compensation. But xhile -
the protection of the unemployed xorker is a collective responaibility, it is
up to the coa~cmunity and not.to businesaeg to assume it lest their competitive
positfon be undermined by forcing them to employ an excessive n+amber oF Workers.
This means that it is necessary to invent mechanisms for the replacement,
training, and so on of t+orkers in con~unetion With the payment of unemploym~nt
compensation. I believe, for example, that it would be possible to increase
the number of French workers abroe~d. I~ny young unemployed workers aould not _
refuse to go and work for 2 or 3 yee~rs in a French firm of the Third World if
they Were given the me+u?s to leave and if they were assured acceptable compen-
sation as well as their reintegration when they returned to France. A special
_ effort could be deployed in this direction. That Would mak~ it possible to
absorb the unemployed young and to better integrate France into international
trade.
Our industria~ policy should also be premised ~n mobility to a greater degree.
This involvea 8 significent revemping of our policy of territorial improvement.
An industrial nation is one where some regions have a fairly dense industrial
febric. In this respect the Paris industrial center undoubtedly constitutes
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~n antimod~~ b~cauge di' i+.s ~xCeg~ive ~onc~ntratinn. In cdntr~~t, the
inc~ugt~3.~~. ent~.tieg df
goutharn Germttny t~re ~air~y gooc~ mode~s; (~erman cit3es
anc~ vi~:l~g~g ~r~ f'~?irly c~.da~ to ~ach other ~nd ~everal 3nduntri~~ are eng~on-
Ced in the countrygid~~ When a f3.rttt ~o].dn~ it i~ ~~~y ~dr th~ aork~r~ ta find
~e:nploym~nt ~n ~nother. ~ut in such ~'r~n~:h regions a~ I~~itt�~ny, southw~~tern
~'r~nc~, or th~ e~tu~ri~s, hi~hly sc~tt~re~l indu~trieg experience much d3f~'i-
Cu1ty in redeployir~q. When ~ plant closes in ~ r~~inn where it 3e the onl.,y '
dne within ~ radius nf 30 k3lometere, it is a cata~tr~phe w3thout any solutinn.
The pol.icy of
territori~l improvQment must thug b~ revamp~d und pr~mi~ed on
the livable n~?ture of population centers. Wh31.~ for the pas~ 20 y~ara th~
governm~nt has purgu~d ~ hou~ing poliCy und~er th~ pr~sgur~ of ~v~nte and
sc~rcity und has built ~'a3r~y haphaz~rdly (~ow-~~~t housing, c~o~~ guburb~,
and so on)~ it i~ now time to ~eek the meane nf
a modern indu~tri~l model ~nd
to put th~ streas on its qualitative u~p~ct (3ndividual. hom~s, urban develop-
ment, and so on). It is necessary to resigt the tempt~tion to defend a rural
mc~del which belong~ to the past. A modern society ~ives in cities which offer
a certain nwnber of ameniti~s. And whil~ the city rubs shoul,dpr wi.th th~ p~ant
in the hell of the collective ~ubconscience of the French people, 3t ig appro-
- priate on that score, too, to prt>ceed with the eLiminat3on of outdated ideas
and to look the future in the face.
- France's industr3el pollcy is also a policy in some ae~k sec~tors such Qs that
o#' sme?11- and medium-sized businesses that we should better equip for the er~ .
of int~rnationalization. I have alreacly mentioned this. Induatrial policy
i~ furthertnore a poli~y of innov~tion and a fundamentul point is involved here. -
Tnnovation in the field of products is the fact of essential specialization
among developed countries. Those who know how to plan n~w products, to develop
them on the mRrket, and then to export them will be those who Will become more
affluent in the future. It is thus necessary ta acquire in very short order
new product sectors and to ai ndon no le~s rapid~y sectors turning out products
ahich have become coummonplace or outdated. This implies making a special
selection of ineans of indu3trial research, removing those procesae~ which check
innovation, encouraging cr~dres and engineers to establish their own firms, and
setting up udequate mechanisms to this end. This is not one of the least
- important aspects of an industrial policy.
= Que~tion: For you this industrial policy--you have mentioned it more or les~
implicitlyr on seversl occe~sions--cannot occur without aome policy of social
progress. However, can the developments that you envision not be analyzed as
a return to capitalism, if not pure capitalism at least a very tou~h, inexor-
able variety for all the murginal busines3es?
_ Answer: Yes, definitely. But one should take care not to confuse things.
One could perceive in the model that I propose a socialism compatible with
frcedom of trade and of the market place, one which is still the essential
aource of not only our economic but e~lso our political and social Progress.
It entails effectively the elimination of deadwood. The government should
refuse to support businesses in trouble lest it stymie the process of ad~ust-
ment. By means of such support short�term gains are obviously achieved but a
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d~mper ie put on ~Ch~ re~~.].oc~?tion of re~ot.~rce~ and in tih~ 1~st ana~ly~is one :
be~omes ~.nvolved in ~hort ord~r in British "~top Qnd go"-type vicioua circ~.es.
~'he ~b~ndanm~nt of ~ectdr~ and bus3nesses wh3,ch are no ].ong~r eoatp~t3tive ~.s
tihe dir~ct consequ~nc~ of ~h~ in~r~~ged r~gpone~.bi~ity of ~'irms. 7~' you ~re -
responeib~e ~nd free y~ou ~r~ ~1~o r~gp~ng3.b~~ for paying fbr your fa3.lurea.
~
_ However, S believe that th~ introdu~t3on of' ~ certa3n degr~~ of a~lf- ,
management, that 3s, the Control. by work~rs of decieion making can he1.p ~
reduce these risks. Indeed, numerous failur~s have bad manag~m~n~ as their
cause. Naw, if cadreg or trade unions hed the3.r ~.nput in the m~nagement of ~
their firms, some m~asure~ would perhapa be adopted mor~ ea~ily. In n~y
opinion social policy doea not mean defending deadwood. Qu3.~p the con~rary,
guch protection const3tu~eg ~ 1.ong-~erm antisocial policy. What must be
social3.zed i~ ~he hum~n organization knawn as the f3rm through ref`orm of th~
ent~rprise rather than the econo~r through the pl~nning of 3nvestmentg. For
me p~anning meane strategy but this does not signify that th~ government must
itself effect the redeploym~nt. .
Question: Do these prospects make you optimiatic without reservat3ons about
the f'uture of the French econo~y?
Answer: A year ago the proapect of a victory of the Joint Program made me
pesaim3stic. Indeed, the left, as it was conatituted at the time, ~rould
have pursued a typically defensive pelicy. ~t would have stimulated con-
swnptinn, incr~ease~t soMal transfer payments, and supported loaing operationa.
Nationalizations would have obviatefl the closing of seme plants, Which inci-
- dentally constituted the unapoken goal of same of those favoring that measure.
Short-term economic reactivation would have made it possible to reduce unem-
ployment sameWhat, but the country xould very soon have witnessed a for~ign
trade deficit and a recesaionary spiral with al,l the political instability '
that that implies. One could say that, considering the difficulties of the
French econo~r and the degree af dissatisfaction, we eluded such a risk onl,y ~
through a miracle. But perhaps, top, there aas an awarenPas among the public
o~' ~hc true problems of real strategy that have to be faced despite the handi-
cap thQt th~ ma~ority party's 20 years in office constituted and despite the
new aspect which the left had then assumed. People still came to see that it
was neceasary to choose betr?een the perpetuation of a"stop and go"-type
proce~s and efforta at e.d~ustment, harah ones but which probably conatitute ~
sound long-term policy.
I am therefore a little more optimistic today. While the economic policy
pursued by the government is sound policy, I would however repraach it xith
not doing enough in the social realm, namely, as far as the decentralization
of decision making is concerned. In contrast, it would be necessary to tackle
Social 3ecurity with courage~and an innovating spirit. But each thing can
come in its time. What is involved here is not something that can easily be
established. Progress has been realized: The liberalization of businesses,
_ the refLsal to support firms in trouble, opposition to stimulating the econo~r
(excessivelyJ, progress in reducing spreads in income (law xages), improved
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cor?c11i;3on of manua~ laborers, po~.ic3.~s that a~~ ~.~se favnr~b~e ta f'~rmer~
- r~nd merchants than in the past, and oth~r me~~ur~~. Obvidu~ly, muCh remains _
~o b~ don~: Taac reform, ~oCia1. Security r~~orm, t~ac on capita~ ga3.ns, and
~~prCial~.,y the econom~.c and poli~3ca~. flac~n~ralization of d~cis~on-m~kinp,.
but; p~rhapg a1.~ af th~.g c~n b~ accomp~.inhe on1.y wi~h th~ partiaip~tion of
the SoCia~3nt~ 3n the gc~vernm~nt--n ~acred ur?ity for ~h~ sak~ of ~h~ e~onomic
~truggl~, ag in i9i4 w~.~n ~anC~~g aonv~rs3.on to a w~r econo~y. Wh3.le r
bpliev~ th~t we h~ve tak~n the corr~ct p~th, I am no~ at al~ su~e o~ b~3ng
opti.mistic in th~ long term. Indeed, we are not done wi~h our difficu~ties,
notabty regional economic dif~3cul.ti~s, and w~ sha11. ulways have ~~~ct3ons _
coming up~ W3th a democr$tic syatem such aa that of' ~'ranc~, it must be some- _
thing of ~ miracl~ to be abl~ to pursue an unpopul~r policy in the long run.
gut on~ must place one's hope in ~rench d~mocrary to find the means of the
French 3ndustrial mode~. ~.d~us~ed to the realities o~' the ye~r 2000.
~OpYRI(~HT: Associ~tion Internationale kl~turibles ig79
2662 ~
cso : 3ioo
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CO[iNTRY 3~CTION ~gpp~, `
i-
~
i
BA~1tE LETTER 3TRE98ES NEED FOR FTSCA'~ RESTRATNT
Parie VALLURS ACTUELLES in Frenah 26 I~Iar 79 pp 16-~17 ;
- [Text] "Revise ~he direction in whiah the etate is going": thia word of !
~ order ceme From the preaident of the republ3c to the Council of Ministers ,
on 28 February. The eama day~ Mr Raymond Barre was addreaeing a pereonal
leCCer to each of the membere of the government. We publleh it in full. We
have emphaeised ite eeverity. _
"Sub~ect: Preparation of the 1980 Budget. ~
"The first budgetary labore for 1980 ahow that the pro~ected financial law for ~
1980 will preeent very eerioue Frobleme for the public financea. A eimple
restatement of the 1979 credite, combined with the rate of growth in volume ~
which it ie poseible to anticipaCe taday, ie imposeible becaue~ of the large ~
deficit that it would cause.
~
"That is why at thie moment when preparation of the budget ie beginning, I '
must pereonally call your attention to the necessity of mastering the diffi-
cultiea which state finencee are passing through. !
~
"In spite of the efforts n:ade in 1977 and in 1978 to limit the budget deficit
to a supportable amount for our economy and compatible with the defenee of '
our currency, the slowdown in economic expansion is severely reducing receipts , i
while the exp~enses of economicsl and social intervention continue to in- �
creaee~rapidly. ~
"State borrowing w~,ll hence~ozth be uaed to pay ~nterest on the state debt.
"This situation. which explains the di#~~,cult position that our couatry has ;
been living in eince 1974 cannot be tseated with indifferenee and muet be
~ progreseively put right. Ae the overall ~iacal pressure has today reached a
very high threahold. a zigoroue effort Por slowi.ng down public expenses must ~
be undertakea. This ob~ective is eeaential both on ~he political plane and
~ on the economic plane. ;
,
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"The budget mini~ter wi~,1 have sen~ to you ~he t~ecese~ry technical infor-
maCion fox ~he prepaxation p~ Cha propoaed �inance ],aw ~ox ~.980 in thia
sense.
"Ag of naw, x very e~peci~lly cs~.1 youx a~tention ~o ~he impor~ann~ ~h~t I
ettnch to ehe following guidelines:
"1. I hope that a budgetary body wi11 be constituted alonga3.de you. 1'hie
budgetary body ehould aesociate, under your direce authority, high publ3.c
employeea who will have responsibil3ties boCh to the cenrral administration
and Co the outeide eervices o~ your departmenC. I can see only advantages in
aseociating repreeenCatives of ehe Budget Minietry in ~his hody.
"This body wil1. have ae ite miesi.on ~o present to you proposale for economies~
for management change~ and ~ox redeployment of your resources, by engaging thE
adminiatraCions themselves in ~he effort o� making correctiona. ,
"2. In adminietratione ae a whole, the quest for greater productivity should
be eyatematic; the economic contexC in which we have been plgced imperatively
demande a change in our behavior. Reepect for financial conetrainta muat as
of now take Che first rank among the concerna of the adminiatra~tions placed
under your authority and it muet poatulate a permanent revision of enda ~nd
- meane. The redeployment of credits ia the only realiatic tech~ique for
revieing the servicee voted on which often ~uatly conaCitute one of the topics
of criticieme made of Parliament. In thie apirit, I consider that the present
- level of the effective public agents permita the adminiatration to ensure
their new mieaions; furthermore, suppreseion of ~obs correaponding to the
reduction of certain taeka must take place.
"3. No doubt you will believe it to be necessary or opportune to urdertake
- new actions. I am not hostile~ with a double condition: that they be among -
the prioritiea already defined by ~the government and that you propose real
economiea in order to eneure their financing. These economies taust be aig-
nificant both for their budgetary value and for their political impacC on
public opinion. I wi11 re�uee to examine any request which doea not anawer
those conditione.
_ "4. I obaerve finally that many pzoposa~.8 for �iscal exonexations or alle-
viations are regulaxly submitted to me. These axe oft�en txanslated into a
noticeable reduction of budget~~y rece~,pte, out of proportion to their
economic and eoc3dl intexeet. Such fiacal measurea do not constitute an
inatrument for interventi.on: on the one h~nd they are dif~icult to measure
before they axe put i,nto operation and they rarely reach the beneficiary
who is iaitially anticipated. In an inverae senae, the habit has been
acquired of preeenti,ng new meaeurea 'gauged' on new reaources: this method,
which would end up by diemantling the budget~ cannot be accepted.
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"I tiherefore hope that you wi~,], be wil~.ing tio make these guidelines complete~.y
respecCed ~,n the etx~,cteet way by the d~rectaxa ~nd ~exVi~e ch~.efa who are
placed under your authpxiCy.
"At ehie moment whan ~he enCexpx~.~ee~ w~,Ch the a~.d of the ex~te~ ~re carrying
out a deep dnd diPficu7,~ convere~.on in Chei,r eexuctuxea and in Cheir activitiee, ~
- public opinion would noe underetend Chat th~ governmene ie devoted to rev3eing
the way in which the etate operates.
"You mue~ pereonally watch over the dePinition of the renunciatione which
these cho3cee imply. A~ of now ~t ie neceseaxy tio abandon all ministerial
particul~riem for the eake of the nationnl interest.
"The etate budget ie not con~inuously created ~hroughout the year. Iee
execution ahould be carriad out with reepect to the initial appropr~,ationa
voted by Parlia~nant. It is not praper that I ahould be conatantly taken up '
during th~ year by requeaCs ~ending to overflow the budget and thus to work ;
outeide the neceeeary annual dietribution in order to master the evolution of ,
the public finances. I believe that it does not belong to the services of '
the different minietries nor to the members of the ministerial cabineta to
engage or to contract worke that o~ould lead to the unavailability of voted
credits.
"The budget of your department ie a part of the budget of the nation. Govern-
mental aolidarity ia therefore esaenCial for the proper execution of the state
budget.
"Raycnond Barre"
COPYRIGHT: 1979 "Valeura Actuelles"
12,116
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COUNTttY SECTION I~ALY
~
L~GITIMACY 0~ NAVY'3 SPECIAL FORCES' QU~5TION~D
PSI Accame'e Commente
Rome AVANTI in Itali~n 20 Feb 79 p 10
[Article by Fglco Accame, member of parliament reeponeible for the Uefenee
Section of the P5I leaderehip: "Many Questione Regarding the Armed
Forces' 3pecial Unite"~
[TextJ I~rom the ESPRESSO we have learned thet a epecial unit, made up of
Navy raiders~ received ordera to stand by to assault the hotel of pre-
aumed rad brig~de membera at 5alice Terme. T'hie has been confirmed by
the miniatere of defense end internal affaire in their reporta to the
- ~oint commiesione held in the Chamber of Deputies laet February 9. Frnm
IL CORRIER~ DELLA 3ERA~ dated Sunday the llth~ we no~ knowr that numeroue
special unita of the armed �orcEe spread throughout the land extet. ~rom -
IL GIORNALE NUOVO, deCed the 16th, we have learned fo the exiatence of a
"changing guard" among the special units (but We do not know aho the
noncommiaeioned officer-in-charge is!) Parliament also has learned of
- the exiatenae of theae epecial units from the newe media. Some call it
routine adminietration. For us, on the other hand, thie eignifiea grave
unknowna. Who ordered the makeup of the epecial unita? Who provided the
funde far the new equipment? In which budget do they gppear? What sort
of leg$1 training have these men received? If they are killed, ahat bene-
fits are provided? Are they volu~nteers or drafteea? Ie the uae of the
unite of the armed forces called for ahen replacing the epecial unite of
the Carabinieri and the police ev~n if the latter Were to be available?
Have the apecial unite of the armed forces been set up becauee thase of
the Carabinieri and the policy are not sufficiently reliable? Hna une
bothered to find out if a particular ideology ia exhibited in common within
these apecial groupa? The miniater, in the Defense Commiesion, in his 9
February reply etated,'accord~ng to the cotmniesionere' bulletin, tihat:
"The law at preaent in force contains nwaerous norms which call for the
poaeibility of use of the armed forcea with regard to the maintenance of
public order if the normal forcee of public aecurity in an emergency are
incapable of carrying out their taek, provided the court has iasued such
a request." Now, with regard to the planned raid at Salice Terme~ it
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cannor be ~aid ~hee that wae ~ ce~~ in whiCh th~ "~p~cial unitg" of th~
- Carabini~ri or tha pollce could not be ca11~d on. A1so, it c~nnoC be
eCgC~d Ch~e Ch~ uee o~ the unit wge ord~r~d by tihe cdure, in vi~w of Che
fact that it w~~ k~pC totally in th~ dgrk abaue eh~ whole epi~~d~; this
hae been confirmed by Che minise~r~ thetns~lv~s. Ther~fore, w~g eh~ ~ase of
the bold raidere ~t Salice T~rme legititngt~? According to ue it wa~ not~
gnd furth~rmc~re, it raieeg very grgv~ qu~~eion~, gmong othere, to why
rhe Carabinieri ~nd the po1~c~ wer~ Cot~liy left out. Thp police, rhrough
the~r union repreaenCativee, h~v~ expr~~~ed d~ep conc~rn dv~r what ha~ oc-
curred. But, ae wg~ ~tated, abov~, rh~ probiem ig even graver gnd deals
with eh~ criteria ahich are to be u~ed regarding th~ uee of militgry
forcea. During ihe diecueeione of L~w 382, NORMS ANfl PRINCIPLES 0~
MIL~~AftY DISCIPLINE~ the propoeer of the bi11 him~eif, S~gni, forcefully
m~de known hie ~rorrieg regarding the u~e of armed forc~e not clearly ~p~lled
out in the con~titution. A poseible ~ndirect pgrticipa~ion of the armed
forc~e~ as happened when Che att~mpt against ToglietCi Cnnk plece or on
_ the occgeion of Moro's murder, hae be~n ~uetifi~d by the government with
the claim that in tho~e circumetancee all of the police in Italy were
cammirted and that a requeat for the aremd force~ to cooperate d~rectly
with the public order forcee wae made. In the case of Salice Terme, thie
certainly wae not the case. Furthermore~ the conetruction epecifieg that
the use of the armed forcee ie essentially one directed abroad and not
inside the cnuntry. With regard Co what the Italian conatitution requirea
of the armed forces~ it ie worthwhile to recall what conetitutionaliet
_ Giorgio L,ombardi wrote on the eub~ect in hig work, "Contribution to the
5tudy of Coaetitutional Dutieg~" edited by Guiffre, page 442: here the
authnr cleerly mentiona "the unconetitutionality of any legiel~tive
meaeure whateoever which, in a~cordence ~ith Atticle 78, introducea neW
_ limits to ob~ective aituatione and modifies, even temporarily, the com-
petence of the conetitu~tional eystem excepting internal defense causes."
Lorobardi goes on to eay that this Would refer to "a more widespread and
penetrating concept of public order, in no wy relatable to factual situa-
tions Which oae their origin in evente of a foreign nature linked to the
duty of defanae." According to the GIORNALE NUOVO columnist, the armed
forces must ect unhindered, be it in peace or in war, directed abroad or
to the interior. We 8ay no to this theais. It may be true that in eome
countries of Latin America, Argentina for example, the armed forces
are the guarantora of the constieution: but we do not accept the
Argentinian modelt Nor do we agree aith those who aut an eye at this
model.
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Cnnm~andoe~ SCaCioned in La Spez~a
M11nn COitRiE~E D~LLA S~RA in Itallen 11 Feb 79 p 2
- (Article by ~abrizio Cartes "Antiterrorit~r. Cortnnandos Operate Throughout
~ealy"~
(T~xt] it~lian public opinion, because of Che recent eventg of ehe Moro
cese, hae~ with g gre~t de~l of cur3oeity~ become ineereeted in a epecial
unit of the navy (with ite Craditione~ ite 50-year exper3ence~ iee ex-
ceptionel prep~ration acquired during yeare of hard work) which hae been
chosen for very rieky actione and thue for oparatione againet ~pecific
acte of terroriem.
- We wi11 not diecues WhaCher thie choice ie wise or noC~ certain in our
conviction as we ara thgt tha etate muet defend iteelf with the beet it
has at ite di~po~al againet any attack~ be it from within or from outside
the country.
The "bold raidere" of the navy are not a unit thrown together in a short
period of time; this unit ig made up of inen who have placed their whole
at the dieposal of the etate~ including their livee. And the etate hae -
the duty, if it hae nothing better. to uee their hlep~ be it in time of
war, ae hae happened, or in time of peace.
Por this reeeon we do not agree wiCh a n~mber of parliament of the Dafanee
Commiesion, who hae eome doubte regarding tha opportunity of ueing thia
unit due to the fact that there already exiet 160~000 caen betaean _
Carabinieri and public eacurity forcae.
The reason behind thie diseant ie very eimple. The cauee of the diecuasion
ie terrorism~ in all ite forme~ including its moet eavage and aeneelees.
Terroriem i~ fought by prevention, by continuoue aAd eilent work (above
all~ without the deaire to be famous and make the headlinee) vhich ie
being carYied out by SISMI and by SIyDB and finally by a capillary net of
men and equipmenC ae poaees~ed by tha Carabiniari and the police.
When something is needed ia~nediately, one~ for many reasone, muet not and
cannot ignore half a ceatury of axperieacea and decadea of training of
. men and equipmant. One muet uee that ahich is the beat and nearest at
han~d .
Obvious security reaacros do not permit the revealing of eecrete of theee -
unite; we can oaly aay that theq have no reasoa to be envious of the beet
in the world (euch ae the SAS commandoe from the United Kingdom or the
GSG 9 from ~last Germ`ny~ the famoua laatherheads). Thaee chosen man con-
tinue the tradiEioa of thoea who vere able to dieabla the aorid'e mightiest
and beet armad fleat, at Gibraltaz, Alexandria~ Sudn~ Malta, etc~ irith
claseical actione involving extremely bold raide~ whoee succaee neceesitated -
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!
i
Che prior neutralizaCion of'the world's most capable intelligence arm, ~
ae the Intelligence Service. Al1 of this cannot and muat noti be ~
for$ntr~n. ~
Todrry the men who make up thie unit have only one 1ogl.eCical or adminie-
trative base at La Spezia, but they are active througltiouC the whole ~
penineula~ in the training grounds which range from the Alpa to the ocean
floor. They are al1 yuung~ expert mountain climbere, frogmen, and para- '
troppere. Their unit ie of abc+ut battalion size, and moat of them are ~
raiders originally from the "San Marco." They are screened as to phyaical ~
atatue by Navy docCore, given health teste every 90 days and every 3 -
months they undertake very strenuoue teata euch ae survival courses, '
elone~ at sea or in the mountaine.
i
Their pay is the same as those of the same rank in the army and training ~
takes place in the most diverse localities, both in the North and the ;
South. They are able to go into action immediately, anywhere in Italy,
in a maCter of houre. All Che reet is "top eecret." ~
COPYRIGHT: 1979 Editoriale del "Corriere della Sera" S.A.S. ,
~
Military Discipline Law
Rome IL GIOR'NALE NUOVO in Italian 16 Feb 79 p 5 -
[Article by Guido Azzolini: "The Raidera Against the Red Brigadea"] '
(TextJ Rome, 15 Feb--The most recent developments of eventa linked to the ~
. murder of Aldo Moro and hia bodyguards hae also brought the navy raiders '
into the limelight. It should be remembered that according to the
article in the weekly making reference to the preaumedly repentant Red _
Brigade member, the navy's bold raiders ahould have surpriaed and cap-
tured the heada of the Red Brigades meeting at a villa in Salice Terme. -
- This fact appeared unueual, and would have been passed over as an imaginary i
fabircation had it not been confirmed by miniatera Rognoni and Ruffini,
when last Friday they reaponded to a series of parliamentary queriea
heatedly preeented to them on the occasion of the joint sesgion of the :
Internal Affiare and Defenee commiasiona. Actually, the speciAl unit ~
had been placed on alert; its deployment and use would have b.:en perfectly ~
legitimate--it was explained--becauae the uae of the armed forcea for the -
maintenance~of public order is~called for by sCate law, upon request by "
civilian authoritiea i+ith responeibility asaumed by officera of the ;
� . Judicial Police.
One doea aot have to go too far back to remember that on the very occasion
of Moro'e kidnaping, military pereonnel were widely ueed under these pro- ~
visions and conducted searches and manned checkpoints without a dissenting .
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~ voice being raised. 'rhe possibillty thar ehe navy raidera could b~ uaed
= againat the Red Brigadea, however, ~olted in particular soci~llst parlia-
mentary members Mancini and~ as was Co be expected, Accame. Acct~me~
amonR orhera~ not entisfied with ehe anewer he got on Friday, the oCher dAy -
r~yubmirCed a query in which, after indignnnely c~111ng ineo question Che
presumed political preferences of the rg~dcr,~, ~sked "how ia tihe 1ife~of
the young career milieary men taken care of, men who certainly do not
want to see ehemselvea as Carabinieri or police subetiCueeg whn, by the
way, are given economic and legal guarantees in cg~e of accident."
Also~ not to menCion the fact that the raidders, (they do not number over
100) have been ueed at length and at aerious risk of their lives very re-
cenCly in the Punta Raisi body-recovery operation without Accame's deigning -
to ahow,concern over their health. To that should be added the fact ehat
thar the socialiat depuCy is conaidered the nu~~or force behind the "Norms
of Principle on Military Discipline" (Law No 382, dated 11 July 1978) of _
which Article 1 etatea that: "The task of the army, navy, and air force
is Co assure, in con~~liance with the oath taken and obeying given ordera,
the defense of the country and take part in the safeguarding of those
free institutions and the common national we11-being in case of public 4
dieastera."
The same concepta, more or less, are reiterated in Article 2 where the new
oath is spelled out, which binda military peraonnel to "carry out, with
discipline and honor" all the duties of one'w own state "for the defenae
of the country and the safekeeping of free institutions." Now, that
the Red Brigadea are a public calamity is affirmed by many; many also
hold that they are at war with the state. There is, however, no one who
denies that they want to subvert free institutions. If one cannot use
the military for doing what they solemly swore they would do, why should
one pretend that they pledge their oattis in the first place?
Not to raise polemics with the aforementioned deputy (who is very well
aware of these mattera, having been a naval officer and former head of the
Defense Commiesion), but rather by wAy of information to our readers:
the use of navy raidera in antisabotage and antiterrorist operations and
against sir piracy was forecast some time ago, more or lesa at the time
of the blitz of the "leatherheads" at Mogadiscio. The very Lufthansa
aircraft which was so brilliantly recaptured by the German aupercops in
So~malia had landed for some hours at Fiumicino airport.
We did nothing to try to detain it, despite a apecific request from
Bonn. Officially, it was eaid that there had been a misunderstanding. Ac-
cording to aemiofficial sourcea the DC-9 was let go to avoid any diffi- '
culties and also perhaps because of a sensing that the Germans were plan-
ning their coup de main. ,
The explanation provided by other qualified sources, however, ie that
Italy did not posess men who could bring about a surprise attack on their
own, thua avoiding a loss of face by the government.
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Wn seid ChaC men trained for that very epecial Cask were not available,
but that ie not exacG. The pereonnel wae there, but it was not readily
at hand. NoC only were there Che navy raidera but at the staee's service
weYe oCher eimilar groupe, compoaed toCally of volunteers, in the para-
troopera, the Lrigunari, the San Marco Battalion, the Carabinieri and in ~
the Public Securitiy forces.
Each of theae groups, with iCs training and equipment could have been very
well uaed in special and exceptiona~ operationa. It was thus necessary to
coordinate their use becauae quantitatively the various units were at
ChaC time noC numerous. The creation of other apecial, unique groupa
- composed only o� supertrained Carabinieri and policemen would have led to
a proliferation of aimilar uniCs, namely, to a uaelesa and considerable
increase in expenditures, keeping in mind the very high cost of training � ~
plus Che difficulty in procuring very highly qualified personnel to be
used in that kind o� work, in and of itself exceptional (here used with ,
the meaning of "unforeseen" and "irregular"). ~ ~
Turning back to the navy raiders and thue Salice Terme. They really were -
ready to take action: the alert aystem which had been set up to appoint
~ turns for the atate's aremd forces indicated that they "were up." (Na- -
turally how this permanent revolving guard is regulated is not known.)
They would have carried out their mission, without the "ands" or "buts" ~
brought up by Accame. Article 52 of the constitution states that "the -
~ defense of the country is holy duty of the citizen." In peace and in -
war: it is not neceseary to make distinctionq, especially in cases of -
emergency. ~ '
1
9209 '
CSO: 3104 ~ ~
. i
;
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~Utt n~F~CIAL U~~ ONLY
COUN'TRY S~CT IdN g~~b~p
~ NUCLEAit ~IRM MUST F'IND NEW ORbLRS 300N TO SUItVIN~
Stockh~lm VECKANS AF~AREit in Swedieh 1 M~r 79 p 1~-19
(Text~ Asea'e (Swedieh General Electric CorporationJ nuclear power pro~r~m
ie abouC ro end up in Che eame deadend ae Segb-Scgnia's Viggen. The domes-
tic market ie almost eaturaCed, and exporCe are being confronted with polit-
ical a~?d financial obetacles. "But in the long run we are on the right
course. It is a matter of hibernating unCil thinge right themaelvee,"
Torsten Lindetrrnn, the m~naging director, saye. The quesCion ie still if
Asea can afford to hibernate. Yf not, what is the alternative2
In two yeare Aeea's profit hae decreaeed to only a third of what it Wae
during the 1976 boom. Behind this decline ie not only the busineas cycle
~ut also the impact of significantly more serioue etructural problems.
De;~elopmenta in the energy field have taken turna which na lor,ger coincide
with Che course ASEA elected. The etrenuous efforte of the firm during the
1960'e and 1970's in energy technology ie on the way to becoming a sort of
Viggen problem for Asea.
"Marketing conditions have changed ia the laet years eo that at present
we are too heavily engaged in our power side," Asea'8 managing director,
Toraten Lindstram, says. "We are on the right course for Che long run.
It is ~uat a matCer of aurviving until thinga are back to normal."
Both Torsten Lindstraa and hie board chairman and predecesaor as managing
director, Curt Nicolin, are convinced that thie will occ~r. '"The energy
- situation in ~ne world, togeth~er with the recession, has reduced investment
in energy equipment. A higher rate of imeetment, especiallq in SWeden,
and a better coat picture will give better reaulta for u8, since then we
will expand to our capacity," eaye Curt Nicolin.
For Aaea to be able to reach ite capacity in the eaergy field, not only
better bueiness conditione are needed but aleo a significant increaee in
inveeting in electricity-baseil energq equipment, a field in which there is
today global over-production, caused not leaet by the elow-dam which hae
occurred in the nuclear energy programs of many cbuntriea. "Here an im- .
provement ie inevitable when it is realized that the dependence upon oil
must be reduced--benefiting electrical energy," Torsten Lindstrom eays.
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~dEt d~~ICIAI, US~ ONLY ,
It i~ lik~ly th~e Toreten LindeCrom ie correct in hts ~~dg~menC, buC do~g
A~eg h~ve the eime ~nd r~eourcee tin eurvive untii Chia "r~~urgenc~" occura?
In th~ 1~~C ti~n yearg the A~~g CO1i1p~EX I1~8 conc~nergted gtrongly on ehp
~nergy ~~ctor ~o far gs r~eegrch ~nd dc~v~lnpm~~C ~nd manufacturing c~paCiCy
i~ con~~rned. ~h~ energy e~ctor h~e rapidly incr~a~ed itg ehare of the
firm'g s~les. In 1973 energ~ conetitut~d 23 p~rcent, nf which nunlegr
power wae 10 percent. A~e~-ACom, hglf-o~n~d by the eCgCe~ has been ehe
gpe~rhead. A~ea-Atom accepta nucle~r power ordere and then eubcontrgce~
the deliveriea primarily to firme Cied to Aspa.
Up to ttow AeQa-Atom has been a poor bueinese. Up unCil 1977 r~sultn befor~ _
profit~ h~ve been n~gative, gnd through 1977 the ghar~holders h~v~ inveetpd
209 million 3w. kronar in gdditional capital over and above the 100 million
Kr. which were inveeted in the initial capiC~l ehar~e. The future af ASEA ~
is not brighC. 'There have been no new nuclegt power ordere eince 1976.
According to Asea-Atom's manag~ng director, Lare Halle, an erder is needed
~very 2 or 3 yeare to meintain t~chnicgl competence, and in principle one
ord~r per year for a reasonable profit.
One Year's Grace I
"We need a neW ordar within 1 to 1 and 1/Z yeare in order to keep going,"
Lars Halle aaya. The company is working hard to get en export order and
has good proepecte for one from Turkey. In the meantime we are seeking to
reduce our dependence upon nuclear power deliveries by making offere for
conventional oil and coal fired power plents.
Until the energy sector improves, Asea is dependent upon developments in
ite other two branches: the induetrial and transportation sectore. These ,
together with the energy sector conatitute the backbone of Aeea's activity.
The three legs are, hoWever, eupported by a atrong maintenance eector,
consieting of three divieione: Standard Products, Semi-Fabricatiou and
Other. The Standard Products' Division mekes component: for motora, cables, -
etc., parts which the three main canponente uae in their production and
which therefore need not be purchased eleewhere.
The Semi-Fabrication Divieion primarily suppliee steel to the firm's manu-
facturing units, while the divieion Other involves installation, wholesale
and aervice activities.
The three-legged organization wae created in the beginning of the 1960's
in conjunction with Curt Nicolin's becoming managing director. During his
tenure ae managing director Aaea invested large aums in building up ita own
nuclear energy technology with the goal of Aaea's msatering every atep and
being able to deliver complete unita (including the transfer of the produced
energy to the ultimate consumer).
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~
~UEt d~~tCIAL USL dNLY
The eoncern'~ r~~~greh ~nd d~velnpm~nt cn~C~ ~ump~~ up Co 10 p~rc~nt df
th~ firm'~ y~~rly eUrnav~r, s~ver~l p~rcentigg~ pnine~ more Ch~n int~rng-
Cion~i ~omp~titorg. ~or m~ny year~ As~n h~,~ ~rcdunr~d fdr ~boue lU p~r~ene
nf ~11 r~~earch in Sw~d~n.
Mark~ting Negl~et~d
~ ~h~ etrnng effort in r~~e~rch hgg 1ed tn A~~a'~ b~ing on~ of the few fi~m~
in the world which can d~liv~r it~ own nucl~~r pnw~r pl~ne and mngC~rs th~
gl,liad C~chnology. Ae the game eime Aa~~ negl.~cted--~r w~e unabl~--eo
, d~velop the etl1E+8 orgenization which could capitali~~ nn eh~ reeult~ of the
firm'e exCeneive rese~rch. In 1968 foreign sal~e accnunt~d for 45 percpne
of rh~ turnover. Today it ie a few perccneage pointe over 50~ which, com-
pared with the intern~Cional activity of ~Ch~r larg~ Swedish firms, ie lo~r.
The ~hgr~ will~ naverthelege, increase more rapidiy in th~ next few yegrs,
gince orders are now 60-70 percent from abroad.
"Our atill low export eh~re aCeme aleo from commercial resGrictions nn our
producta," Curt Nicolin explgina. "In m~ny countries ordere for energy
equipment xre made on the basie of national preference. Countries auch as -
England and France are in practice close~i mgrkets; and the United Statee,
which conetitutes herhepe 40 percent of th~ market for energy equipm~nt,
excluding the eaetern countries, importa ~uat as little as Sweden," Tor~ten
Lindstrom explaine.
"Aeea's international efforts will be strengthened through a continued
d~velopment of the marketing apparatue and by direct investmente in local
' production ae a meana to break into otherwiee closed countriea," Torsten
Lindstom eays. Apparently Gaea's management hae undereatimated the diffi-
cv.lty of breaking into chese neW markets. The large induatrial countriea
have favored domeatic manufacturers and at the best allow only a limited
purchase of parts ab.road. The underdeveloped countries, on the other hand,
have preferred companiea with P:perience in complete plante, and up to now
As~a has been lagging internati~~nally.
Rays of Light
What can now improve Ae~a's situation is an increase in ordere in the indus-
trial and tr~naportation eectors. Here the aituation ae~ms to be signifi- -
cuntly brighter than only a year ago.
"The greateet change during the fall wae that we achieved a better utilisa-
- � tion of our capacity, which was also increased by auccessive reducCiona in
personnel. We calculate that juat during the first half year under-utilized
capacity coet ue about 200 million Kr.," Curt Nicolin says. The gross in-
come for the firet half of last year was only 274 million Kr., but as a
consequence of better utilization during the second half year, it increased
to 460 million Kr. for the laet aix montha of the year.
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,
~
~dEt d~~ICIAt, U~~ ONI,Y
Of th~ ewa divi~ione it ia p~Yticul~rly th~ indugerigl ~p~tor dn which A~ag '
ie plnci,ng it~ hop~a~. "ie ie her~ we ar~ gning ro mgk~ our greaC~~ti ~ffnrt
in connecCion witih th~ m~chine indu~ery'~ n~ed for ~ep~rin~, coarroi ~nd :
indu~trial electronice," ~orsten Lindetre~m saye.
Th~~~ are ~r~ge in ahich Agea ae e buain~e~ hae great eYp~ripnce. Aee~ ie- '
~~lf ug~e euch eyeteme to increg~~ Che profiCabiltty nf ie~ own production.
This ipd ro ite at~rting ~~v~ral ye~rg ~gd its own produceion or robots ~nd
gteering r~l~y~. "Our robot and relay buein~se had had ~ fine incr~gge of
about 25 percent yegrly gnd ~ good prc~fit~bility. H~r~ we e~e ~ gre~t pat~n-
tial and hence will concentr~te on there s~ctore in th~ fuCurQ," says Curt
Nicolin.
W~nte To 3e11 3tee1
One ~~ctor wh~re neither Curt Nicolin or ~oreten Lindetrom eee ~ny po~gi-
bility for fueure groweh i8 gt~el in the S~mi-~gbrication Division. The
cnncern's two ~Ceel mills are Surahannmr and Kohlsaa. Both are doing bgdly.
In 1977 Surahananar loat 124 million Kr. gnd in 1978 it ie gbout the game. .
_ "I don't eee any future potenCial for these two entitiee," gaye Curt Nicolin, ,
who would like to eee them incorporated aomewhere else in the eteel i~duatry.
"Our unite are too emall to compete. The probiem is aleo that they are go
apecialized in their range that they do noC fix directly into any other
eteel producer," Toraten Lind~trom seys. At the mom~nC Chere are no die-
cusaions going on with anyene regarding Surahammar and Kholswa.
While the 3emi-Pabrication Division ie the firm'e only real big looser,
the other two "eupport divisions" 3tandard and Other, are the concern's two
moet profiCeble unite. Standard Producte ig very profitable in boom Cime~ ,
because foreign eales then increase greatly. The Other Divieion has profit-
able energy operation in the Voxnan Group. -
A big problem for the firm's management is inflation. Many of the ordere,
particularly in the ~nergy field but aleo in txansportation, can only be
definitely calculated a couple of yeare after signing the order. "We are
not able to put index claueea in our contracte but must in the original ~
' price calculate for inflation. If we figure incorrectly, it affecte our
margin. Leat year our coet calculation vas more favorable than anticipated,
and this had a positive affect on Che reeult. This year it Will probably
be the oppoeite," saye Curt Nicolin. It ie againat this background that he
believes thBt the improvement in profits in 1979 will be modeet deapite
orderg and the fact that the utilization of capacity continues to improve.
Additional ealt in the wound ie the fact that the l~trge order for trana-
formera for. Iran in 1977 wili be poatponed. A future ahich doea not look
too bright for Aeea if inveetment in energy does not pick up in Saeden and
abroad.
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,
t~~d?s t~~'CICtAL IIyL nNt.Y
~t' ~ _ . _ ..w._.._
.
t1 t00 ~
A~s or+drntoalc ~ 1 ~
uoN , .
_ , uia (x}~.
~
. C3'
t ~oo . . .
I ' _
~ ~r,~ ,
. , .
ri ~ ~ ~ ! nn tne
K~y: ~ -
1. Asea'e bucking nf ordere 2. total 3. of which nuclear power
l~-k01"t 14sAS (1 .
U~ ua t~na~ts v~rku~mMtN~M h~r ~p:: ~
Oniylywq, Aqv nqnlsict vNlt svaa ~r fOr A~wlcpne~~:.~.
(2 ) R~sultaat hu mMtkat nNd tvA b~d~Mir
9 t~e s e~~ oa~ .aw+e~t och Ib+..enh.e .;r.w�a ,
1~ kaplul Iw ookN /~Wt. D~ w VA vl~
taNn f8r wlMiat ooh avM~se~ ir M~rr
~n d~ w Aa~a b~rMcnad~. ~~~y M,
dMc~ bw~knin/IpsluOioM._ N ~~r;~
lund~ A~ Nn ~oMNt~t dl nirfll~w
Woc~rt odL+ wk~sb~ M"~Ap~~A:
ji
R~~~ ~ ~ ~O
1l77�
. .4~�~,
~ ~ p~ I~iWt~k~
Moant ~
(3) `4)
~t ~5~
~o~ to,+ ~ -
5,1
k5 4
211
. ~
Key:
1. 'Phe lust three years of ar_tivity have been poor for Asea economic-
nlly. Profita have decreASed by two-thirds, and "solvency'r
~aaliditet) nnd earninga on working capital have also fallen.
"Veckans Affarer's" for "solvency" and returns are lower than
those calculuted by Aaes. This results from using different
- (Kcy continued on following page]
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I
i
~Olt O~~ICIAL US~ ONLY
~CCOUntiing principl~s. Thu~, Aee~ give~ iCa golvency ~e clo~e eo
30 parcent ~nd returne on "earning-demgnding aapieal' at ~uee 10 ~
percent for 1977.
2. Salea in Milli,ons o~ Kr.
3. Earninge in Millione of Kr. ~
4. "Solvency" [soliditet], peroenti '
5. lteturn on Tota1 Capital, percent '
COPYttiGHT: Ahlene & Akerlunds eryckerier, Seockholm 1979 !
6893 ~
CSO: 3109 ~
END ~
~
~
~
~
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