Easing trade fears will top agenda: The new French government needs to balance the disparate groups in the ruling centre-right coalition to ensure success at home and abroad

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FOR the moment no one seriously expects a drastic reversal in France's policy towards the European Community, or a radical shift on trade and defence, despite the dominance of the tricolour-waving Gaullists in the new administration.

The Gaullists have brought with them all the old rhetorical baggage of restoring national independence and resisting American hegemony, while enhancing French initiative and influence on the world stage. But how seriously the hard right of the Gaullist party will seek to force its agenda remains in question.

During the election campaign, strident statements by Jacques Chirac about putting France's interests first and reversing Gatt and farm agreement with the United States gave the country's trading partners pause for thought. So exasperated were the Germans by the protectionist talk, that the Foreign Minister, Klaus Kinkel, said Paris had reached the end of its rope, putting into question the very survival of the Franco-German axis in Europe. Things have been somewhat quieter since then.

One of Edouard Balladur's priorities as Prime Minister will be quickly to patch up relations with Bonn after the battering of the election campaign and to reassure France's partners of his impeccable pro-European credentials. The promises of his political mentor, Mr Chirac, to put protectionism before free trade - even at the cost of wrecking the Gatt talks and precipitating a trade war with the US - will be dismissed as electioneering, diplomats predict.

More difficult will be Mr Balladur's task of keeping France's EC policy on an even keel while heading off the anti-Maastricht hotheads scattered throughout the fractious RPR party.

The legislative elections were but a warm-up for the battle to come, the 1995 presidential poll, when Jacques Delors, the President of the European Commission, is expected to be one of the main challengers to Mr Chirac in the post-Mitterrand era.

Finessing the newly emerging fault lines in French politics - pro and anti deeper European integration - should prove Mr Balladur's greatest challenge and provide the biggest headaches for the country's political and trading partners. With unemployment weighing heavily on the country and the recession proving tough to shake off, Mr Balladur needs some good economic news before the presidential elections, and that can only come with lower German interest rates or a politically unthinkable steep devaluation of the franc.

At some stage this summer, the Gaullist threats to block the Gatt agreements reached by the EC with Washington last autumn are going to run full force into Germany's rejection of any protectionist moves aimed at saving the hides of France's vocal farm lobby. By that time, Mr Balladur hopes, German interest rates will have fallen enough to give the French economy a sorely needed boost, while preserving the now near-sacred franc-mark exchange rate.

For all the posturing and anti-German feeling running through the right wing of his party, Mr Balladur is not one for confrontation. His instincts will be tomaintain the cosiness of the relationship, while hoping that Germany's economic requirements coincide with those of France.

Keeping Germany from dominating EC foreign policy and protecting France's permanent seat on the United Nations Security Council is a priority the new government shares with Britain. French public opinion increasingly blames Germany for the tragedy of Yugoslavia, by prematurely bouncing the EC into recognising Croatia, Bosnia and Slovenia and precipitating a crisis which France and Britain are trying to contain. Germany's ambition to be a permanent member of the Council touches a raw nerve in France, as in Britain.