‘The French Are Never Happy’ : Down or Up, the Dollar Draws Gallic Grumbling
In October, 1978, when the exchange rate for the dollar dipped below the four-franc level, the daily newspaper Le Matin ran a front-page headline that said, “America Is for Sale.”
The left-leaning newspaper denounced the “ravages of the dollar” and complained about the explosion of cheap American exports flooding France and Europe.
Now, almost 6 1/2 years later, the dollar is shattering all records against the franc, but the French are still not satisfied.
Leading economists and businessmen agree that the strong dollar should help rather than hurt France. With French products comparatively cheaper in the United States, the booming dollar will encourage French businessmen to push their products in America, increasing sales.
But on Feb. 13, the day after the dollar rose above the 10-franc level, Le Matin, which sells for four francs, printed an enlarged dollar-bill across its front and back pages. A small headline announced: “With the dollar at 10 francs, we offer you a special gift--a dollar for the modest sum of four francs.”
“The French are never happy,” Corinne Lhaik, an economics writer for Le Matin, said in an interview. “When the dollar is strong, the French protest. And when it is weak, they complain. That’s just the way they are.”
Of course, not every Frenchman decries the strong dollar, which on Feb. 26 set an all-time record of 10.61 francs before dropping back to its current level of 10.23. Exporters and businessmen who cater to American tourists, for example, are prospering from the dollar’s rise and the franc’s decline.
But elsewhere, in taxicabs and restaurants, in bars and boutiques, many French grumble that a strong dollar is not good for France.
In some instances, the muttering reflects resentment; in others, envy. Often the complaints are based on real inconvenience--American products are expensive here, and travel to the United States is nearly prohibitively so. On occasion, there is no explanation for the grumbling--a 10-franc dollar is harmful, just because.
Cashier’s Opinion
“I don’t know much about economic affairs,” said a middle-aged woman at the cash register in a Left Bank stationery store, “but if you want my opinion, a powerful dollar is a bad thing because it makes the franc weaker. Right?”
When an American traveler complained about the exchange rate offered at a local bank, an angry teller erupted: “You Americans! You think you own the world with your powerful money. You come to France to play, while we suffer. It’s not right.”
For a young woman planning her honeymoon trip, the weaker franc has shattered a dream of traveling to the United States.
“Americans are lucky now because they can go anywhere and buy anything,” she said. “For us, it’s different. My fiance and I can’t afford a trip to America with the dollar so high. Even with two incomes, it would be too expensive.”
Inconvenience aside, the dollar’s rise--more than 74% against the franc since 1982--has left many French businessmen, like Philippe De Visscher, in an economic bind. De Visscher, who organizes concert tours and books musicians for the popular jazz club New Morning, said that “with contracts fixed in dollars months in advance, it is becoming more and more costly to bring American musicians to France.”
Higher Franc Costs
“It’s a problem of importation,” he said. “If you want to buy an American car, it costs more francs today. And if you want to buy an American musician, well, you know the rest.”
Despite the frequent complaints, there are still those who see a positive side to the dollar’s rise, especially exporters and firms that deal frequently with American tourists.
Georges Jolles, chairman of the textile firm of Bidermann, said his company increased its sales in the United States last year by 35%. “I hope the dollar stays this way,” he said. “But a business can’t base a three-to-five-year strategy on such a high dollar.”
At Nina Ricci, the chic high-fashion and perfume house, sales have increased significantly with the rise of the dollar, according to spokesman Sybille de Laforcade. “Americans are returning to high fashion,” she said. “It’s been a while since they have bought this much.”
Jean Bergeron, delegate general of the prestigious Colbert Committee, a trade association made up of more than 60 houses of high fashion, perfume, jewelry and champagne, said that in the past few years, as the dollar has grown stronger, Americans have invaded France, buying “everything in sight.”
Luxury Exports Up
Although worldwide exports of French luxury goods increased by 26% from 1983 to 1984, Bergeron said he is surprised that the growth has not been greater.
“Americans, I presume, are coming here to buy clothing and perfume, rather than staying in the United States to do their shopping,” he said. “That’s what happens when the dollar flies high.”
An American economist in Paris said, “There’s no doubt whatsoever that this is a net gain situation for the French. They increased their exports to the United States by 50% last year, and that’s only going to get bigger with the dollar at 10 francs.”
On the other hand, economists and businessmen concede that a powerful dollar could fuel inflation and make for higher energy prices for the French, adversely affecting consumers and businessmen alike.
Air France, for instance, would normally be ecstatic about the strong dollar, for more Americans are expected to travel to France this year because prices are lower. But the airline must buy oil and spare parts in a market where prices are quoted in dollars. According to Penton Spring, an Air France spokesman, an increase of 10 centimes in the value of the dollar means an added cost of 50 million francs a year in higher fuel bills.
Oil Goes Up
Economists say that higher energy prices encourage reduced consumption, but the net effect of a strong dollar is still an increase in the French oil bill. In 1980, for example, France imported 110 million tons of crude oil. With a barrel of oil selling at $34 and with the dollar at 4.22 francs at mid-year, the French oil bill was 112 billion francs. Four years later, the price of oil had dropped substantially and France imported considerably less crude--77 million tons. But the stronger dollar, at 9.70 francs, resulted in a higher bill, 146 billion francs.
If the French do not agree on whether the dollar’s rise will prove a boon or a bust, there seems to be at least some measure of consensus on the streets of Paris.
“With the dollar at 10 francs, it’s much easier for American tourists,” a cab driver said on a recent trip in from the airport. “No, I don’t mean that things just cost less. It’s easier for Americans to figure out how much things cost. Divide by 10, and add a tip.
“The tip is extremely important. After all, in these days, every franc counts.”
