Economic Troubles Under Mitterand
Socialist François Mitterrand attained a stunning victory in the May 10, 1981, presidential election. The victors immediately move to carry out campaign pledges to nationalize major industries, halt nuclear testing, suspend nuclear powerplant construction, and impose new taxes on the rich. The Socialists' policies during Mitterrand's first two years created a 12% inflation rate, a huge trade deficit, and devaluations of the franc. In March 1986, a center-right coalition led by Jacques Chirac won a slim majority in legislative elections. Chirac became prime minister, initiating a period of “cohabitation” between him and the Socialist president, Mitterrand. Mitterrand's decisive reelection in 1988 led to Chirac being replaced as prime minister by Michel Rocard, a Socialist. Relations cooled with Rocard, however, and in May 1991 Edith Cresson—also a Socialist—became France's first female prime minister. But Cresson's unpopularity forced Mitterrand to replace her with a more well-liked Socialist, Pierre Bérégovoy, who eventually was embroiled in a scandal and committed suicide. During his tenure, Mitterrand succeeded in helping to draft the Maastricht Treaty and, after winning a slim victory in a referendum, confirmed close economic and security ties between France and the European Union (EU).