Mitterrand Names Conservative Prime Minister : France: Edouard Balladur, praised as a polished bureaucrat, pledges not to interfere in president’s role.

After the crushing defeat of his Socialist Party in parliamentary elections, President Francois Mitterrand on Monday named former Finance Minister Edouard Balladur, member of the victorious moderate right-wing alliance, to head a new conservative government.

But the 76-year-old Mitterrand shook off pressures to resign after his party’s humiliating defeat and said he will remain president to direct foreign and national defense policy until his term expires in March, 1995.

“By electing a very large new majority,” Mitterrand said in a four-minute televised address to the French people Monday night, “you have marked your wish for a new policy. Your wish will be scrupulously followed.”

Mitterrand praised Balladur, 63, a polished French bureaucrat who served as chief of staff to the late President Georges Pompidou, as a man of quality and “competence.”

“As for me,” a calm, pale Mitterrand announced with a hint of a smile, “I will observe the duties and responsibilities that the constitution grants me. I’ll see to the continuation of our foreign and defense policies.”

In the face of an overwhelming conservative majority that claimed 484 of the 577 seats in the National Assembly at the end of the final round of voting Sunday, the conciliatory tone set by Mitterrand appeared to be aimed at avoiding a direct confrontation between the executive and legislative branches of the French state.

Under the 1958 constitution of the Fifth Republic, designed for the late Charles de Gaulle, the president enjoys wide powers as chief of state, but the prime minister is responsible for forming a government and directing domestic policy. The sometimes fuzzy division of powers creates occasional periods of “cohabitation” in which the president and government represent opposite, often hostile, political strains.

The jowly, heavyset Balladur, depicted in the popular nightly satirical television puppet show “Babette” as a pelican, has stressed that he would not interfere in Mitterrand’s role as president.

Faced with a sagging economy and an unemployed work force of over 3 million, a new government would have enough problems on its hands without creating a constitutional crisis, Balladur has repeatedly said in speeches.

Known for his impeccable manners and precise French diction, Balladur is acceptable to the two political pillars of the right, Paris Mayor Jacques Chirac and former President Valery Giscard d’Estaing, because he claims to have no presidential ambitions that would make him a rival.

In his brief address Monday night, Mitterrand urged Balladur to move quickly to form a new government. The new council of ministers is expected to be evenly balanced between members of Chirac’s Rally for the Republic and Giscard d’Estaing’s French Democratic Union parties that were the two main partners in the victorious conservative alliance.

With Balladur, a member of Chirac’s party, as premier, a member of Giscard d’Estaing’s party, possibly Giscard d’Estaing himself, is expected to be named president of the National Assembly, the French lower house of Parliament.

Under consideration for foreign minister, a delicate position in a cohabitation government, are Rally for the Republic party secretary Alain Juppe and former Minister of Culture Francois Leotard, leader of the conservative Republican Party, which was also a member of the winning alliance.

For minister of European affairs, an important position during the current period of conflict between the United States and Europe on trade matters, the leading candidate is Bernard Bosson, mayor of Annecy and close ally of Giscard d’Estaing in the Democratic Union. In position to serve as minister of defense is Charles Pasqua, outspoken leader of the nationalist wing of the Rally for the Republic.

The new prime minister, Balladur, was born in the city of Smyrna, now called Izmir, to a French middle-class trading family. His family immigrated to France in the aftermath of the fall of the old Ottoman Empire.

In 1968, he was called by newly elected President Pompidou to serve on his staff along with Jacques Chirac.

After the narrow defeat of Socialist candidates in 1986, creating the first Mitterrand cohabitation government, Balladur was called by the new prime minister, Chirac, to serve in the key position of minister of finance.

As finance minister, Balladur supervised the privatization of several state-owned businesses. As the new prime minister, many expect him to continue the privatization program in order to stimulate the economy and rid the state of costly, money-losing businesses.