BACK TO NORMAL: STARS, STARLETS AND <i> PAPARAZZI</i>

Topless days, tuxedo nights. Jaywalkers, dog walkers, pickpockets and pickups. Paparazzi elbowing for position, starlets getting into position. Movies, movies, movies.

With the threat of terrorism and the mist from Chernobyl vague memories, replaced by talk about the puniness of the American dollar, business was back to normal Thursday on the opening day of the 40th Cannes Film Festival. Although stage fright (read fear of losing) has once again kept the major Hollywood studios from offering their key films for competition, passionate European movie buffs will have plenty of Hollywood stars to look at.

None is likely to get more attention than Paul Newman, who will be here for the gala screening, and accompanying folderol, for “The Glass Menagerie.” Newman directed the film, which stars his wife Joanne Woodward, and is the only American director (he is not in the movie) with a film in competition for the festival’s grand prize, the Gold Palm.

The only other American films in competition, both produced by the financially troubled Cannon Films, were made by foreign directors. Russian emigre Andrei Konchalovsky directed “Shy People,” which stars Barbara Hershey and Jill Clayburgh. Germany’s Barbet Schroeder directed “Barfly,” starring Mickey Rourke and Faye Dunaway.

The stars from those films are all expected to be here, as is Bette Davis and Lillian Gish, whose “Whales of August” for director Lindsay Anderson will have its world premiere as a non-competitive special event at Cannes’ Festival Palace.

How time flies. When Cannes hosted its first international film festival in 1946 (some war years were skipped), Davis was 38 and Gish was 45 (or a few years older, depending on which reference book you use).

Diane Keaton, whose directorial debut, “Heaven,” was met with mostly derisive reviews at home, will try her luck with Europeans. “Heaven” was selected for the Director’s Fortnight, a secondary but prestigious competition reserved mostly for first-time or lesser-known independent directors.

Other American directors in the Fortnight competition are Laurie Anderson, with “Home of the Brave,” Ken Friedman, with “Made in the U.S.A.,” and Jerry Schatzberg, whose “Street Smart” already has been released in some American cities.

In recent years, the American presence in Cannes--aside from the buyers and sellers hustling and hawking in the market and in hotel suites--has diminished dramatically. Whether it’s true or just another modern-day Hollywood assumption (the euphemism is “research”), the studios feel they have nothing to gain by exposing virgin product in a competitive environment.

If the film wins the Gold Palm, so the thinking goes, the award cannot be marketed in the United States, a country where the only award of merit is the Oscar. If it loses, it comes home with its commercial tail between its legs.

It’s bad enough for a film to be deemed as having artistic pretentions, but to have artistic pretentions and to lose to something that will be lucky if it gets to the Beverly Center Cineplex?!

Americans have been spoiled in recent years. In 1985, the dollar was good for more than 10 francs during the festival. This year, the exchange rate (as of Thursday) was 5.8 francs per dollar. While the dollar was losing strength against the franc, French prices were actually increasing.

As a result, Americans here are paying from 60% to more than 100% more than they paid for the same hotel rooms, restaurant services and store-bought goods than they did two years ago.

“No question, the cost of doing business here has gotten crazy,” said William Shields, head of sales for New World Pictures. “But it (the weak dollar) won’t affect the amount of actual business we do here. In fact it may help.”

Shields’ seemingly contradictory optimism was reiterated by several others here who sell American films to foreign buyers. The universal monetary language in Cannes is the dollar, so American distributors simply adjust their asking price to reflect the changes and, because foreign buyers depend as much as ever on American films, the sellers will usually get their price.

It goes against Pecos Slim’s or somebody’s law to say that everyone wins in any game, but that seems to be the case in Cannes.

The merchants win because they have raised their prices in francs and Americans are spending more. The buyers are winning because the francs they are spending are worth more than they were last year (presuming they had been here then). And the American sellers are winning because foreign buyers are more aggressive, figuring that this may be their last chance to exploit the weak dollar.

“It sounds crazy, but that’s the way it works,” said Sidney Niekerk, whose Van Nuys-based Cal Vista International is here selling 500 X-rated film titles. “It breaks my heart to think what I’m paying for my hotel suite, but when we leave here, we’ll be ahead. Way ahead.”