NO FRENCH REFLATION, SOURCES CLOSE TO BALLADUR SAY

  There is no question of stimulating
  consumption or relying on a systematic budget deficit or other
  reflationary policies to boost the French economy, sources
  close to finance minister Edouard Balladur said.
      Their comments followed remarks by prime minister Jacques
  Chirac's spokesman Denis Baudouin, who said on Monday ministers
  were agreed on the desirability of "relaunching" the economy.
      This sparked speculation the government was preparing for a
  reflationary U-turn, but the finance ministry immediately ruled
  out any such move.
      The sources today said the government's policy remained one
  of "recovery," or sound finances and greater efficiency.
      They said that while 8.6 billion of the 30 billion franc
  revenues expected for 1987 from a sweeping privatisation
  program will go to providing public companies with fresh
  capital, 21.4 billion francs, or two-thirds, will go toward
  paying off national debt.
      Any further privatisation revenue this year above the 30
  billion would be distributed between repayment of national
  internal debt and public companies in similar proportions, they
  added.
      The sources said it was absurd to talk of reflation when
  the country's internal debt, expected to grow by 10 pct this
  year from 1,300 billion francs in 1986 was growing twice as
  fast as gross domestic product.
      Nominal GDP is expected to grow by roughly five pct this
  year from 5,000 billion francs last year, broadly in line with
  earlier forecasts. Real GDP will grow by up to 2.5 pct.
      The sources said that with France's economic targets for
  1987 roughly in line with its main trading partners, the
  government had no intention of pushing the economy to grow at
  an artificial pace out of step with neighbouring economies.
  

