What seemed at the outset to be a well-meaning, if probably unrealistic, suggestion by the outgoing President has seriously rebounded on France and threatens to bring Algeria back on to the French political agenda just when Paris least wants it there.
The Algerian military-backed government is angry on several counts. It considers that France acted high-handedly in proposing such a conference without consulting or informing Algiers and noted in a Foreign Ministry statement that: "Algeria will not accept any interference in its internal affairs."
Algiers also see the proposal for a European conference as an unwelcome sign that France may be reviewing its support for the military government. This fear is based on Mr Mitterrand's statement that he had been inspired by the "different ideas" voiced recently, "including [those] at the conferences of the Algerian opposition in Rome".
The Rome conference, which took place three weeks ago, involved representatives of Islamic fundamentalist groups, and drafted proposals for a settlement of the civil war. These were welcomed by most European countries, but rejected outright by the Algerian government. Over the past two years France has continued to support the government in Algiers even though it was holding on to power by force, having lost an election to the fundamentalists. The French view was that the fundamentalists had to be kept out of power at all costs.
Although Mr Mitterrand couched his proposal in very tentative terms, describing it as a "hope", not an initiative, it clearly caught his own government unawares. On Sunday night the Interior Minister, Charles Pasqua - the man who oversaw the commando operation that ended the Air France hijacking by Algerian terrorists at Christmas, and a noted hardliner on internal security - said, weighing his words, that the government had "probably" not been informed. Yesterday an official at the French Foreign Ministry was quoted as regretting the lack of consultation. "We still don't know what is in the President's initiative," the official added.
In "normal" times, perhaps, this lack of consultation would not have been particularly embarrassing to the government. Foreign policy is traditionally regarded as the President's prerogative and the fact that a Socialist President had not mentioned his initiative to a conservative government might have been no cause for surprise.
These, however, are not normal times. Mr Mitterrand's presidency is near its end. His power and influence are already minimal. The right has a large majority in parliament and is confidently expected to provide the next President. What is more, the government of Mr Balladur has been increasingly active in foreign policy on its own account, and one of its apparent priorities has been to preserve the fragile status quo in Algeria and prevent it from becoming an election issue - for two good reasons.
First, the government is itself divided on the subject and any public discussion would make those divisions even clearer. On one side is Mr Pasqua, who wants no compromise with terrorism; on the other, are the Defence Minister, Francois Leotard, who said in a recent Figaro article that it was time to consider talking to the Algerian opposition, and the Foreign Minister, Alain Juppe. Mr Balladur, as Prime Minister, has kept quiet on the subject, apparently hoping to keep the peace in his government.
The other reason why the government is so keen to preserve the status quo in Algeria is the fear that any escalation of the violence there or precipitate change of regime could start a huge influx of refugees into France. This would, it is predicted, massively increase support for the far right party of Jean-Marie Le Pen. Mr Balladur and his main rival on the right, Jacques Chirac, want to prevent any possible upset in the coming presidential elections.