The European Crisis: Elysee talks add to air of crisis pervading EC

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THE atmosphere of EC crisis was heightened yesterday when Francois Mitterrand and Helmut Kohl, meeting for the first time since Sunday's French referendum approved ratification of the Maastricht treaty, refused to comment on their talks.

After speaking for one hour and 50 minutes at the Elysee Palace, Mr Kohl left without talking to some 100 correspondents waiting on the steps of the presidency. Elysee officials had told journalists that a briefing would be held, but this was cancelled without explanation. Later Mr Kohl spoke briefly to German television.

President Mitterrand, who is recovering from a prostate operation carried out on 11 September, accompanied the German Chancellor to the steps. Both men, who pride themselves on their friendship and frequent consultation, looked stern as they said goodbye.

Their meeting, clearly originally planned as a post-referendum reaffirmation of French-German co-operation, came after a day in which the Bank of France had to intervene to shore up a franc which was under attack in the European Monetary System.

The French government, which had promised that interest rates should fall if the French voted for ratification last Sunday, instead raised short-term rates yesterday by one and a half points to 11.5 per cent. On Friday, the Bank of France intervened to hold the franc at 3.42 marks, only to see the mark rise on Monday to 3.4305.

With the refusal by the French and German leaders to make any joint comment suggesting that they had seriously disagreed, some diplomats suggested that Germany might be putting pressure on France to devalue its currency within the European Monetary System after the successive devaluations of sterling, the peseta and the lira last week.

Speculation over what might have been their disagreement adds to a desultory air of crisis in France in particular and in Europe in general. Over the past few days, this has been heightened on the continent by anger with British reactions both to the monetary crisis and to what John Major called France's 'wafer-thin' 51.5 per cent approval of Maastricht on Sunday together with British calls for Maastricht renegotiation.

Lawyers and politicians have pointed out that any majority was sufficient to pass the treaty into law, but the French political establishment does appear shaken by the large number of people who voted 'no'. The pressure on the franc demonstrated that the 'yes' vote had not brought the restoration of confidence that could have been expected.

Some sources have said that Pierre Beregovoy, the Prime Minister, has been asking Mr Mitterrand to consider bringing forward parliamentary elections scheduled for next March rather than hold the poll after a winter which could bring the almost traditional strikes and economic gloom. It is more likely, however, that Mr Mitterrand will agree to a small-scale government reshuffle.

Another new element this week has been a French government announcement to delay by one week the discussion of the draft national budget for next year, suggesting that economic uncertainties make the review premature. It had been on the agenda for today's weekly cabinet meeting but has now been postponed until next Wednesday.

The situation has been made more tense by speculation about Mr Mitterrand's immediate future. Doctors found cancerous tissue during his prostate operation but insist that the condition is not advanced and can be easily treated. Certainly, the physical appearance of the President, who will be 76 next month, seemed good during his few minutes on the Elysee steps yesterday. Shortly afterwards, however, officials said he was cancelling all minor engagements for the next three weeks, but would still keep important appointments. Doctors said this was quite consistent with convalescence from surgery for a man of his age.

But, with an outstanding promise to commence the necessary constitutional changes to reduce the length of the presidency from seven to five years by the end of 1992, analysts had been expecting some sort of post-referendum announcement which would give a clue to Mr Mitterrand's own intentions. His presidential term runs to May 1995 but many, supporters and opponents, suggest that the referendum result would provide him with a victory on which to make an elegant exit. So far, nothing in his behaviour has suggested that this is his intention.

(Photograph omitted)