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Europeans, Markets Edgy About Looming French EuroVote

September 4, 1992

PARIS (AP) _ France’s upcoming referendum on the European unity treaty is causing jitters across the continent and in global financial markets.

Defeat in France would likely torpedo the Maastricht accord, named after the Dutch town where the 12 European Community leaders signed it last December. It calls for European economic and political union, and a single currency by 1999.

Supporters say the pact would foster a unified foreign and defense policy, and heighten Europe’s competitiveness with Japan and North America. Opponents charge that the treaty would create a faceless ″superstate″ in which Germany will gain influence at France’s expense.

Just over two weeks before the Sept. 20 vote, the race appeared close.

The latest French opinion poll indicated 37 percent of voters favored the treaty, 30 percent were against and 33 percent undecided or not answering.

No margin of error was given for the poll, conducted Friday by telephone by the CSA polling agency for the radio network France Inter and the daily newspaper Le Parisien.

Polls published earlier this week had indicated supporters of the treaty were gathering strength thanks to strong campaigns in favor of it by both Socialist and opposition political figures.

President Francois Mitterrand took part in a three-hour televised debate Thursday night to try to drum up support. European Community President Jacques Delors said he would resign if the treaty failed to pass in France, his home country.

Financial markets and big business are particularly eager that the treaty survive because it is seen as stabilizing EC economic and monetary policies. Wall Street is concerned that a French vote against the treaty could have an impact on the already weak dollar.

″Whereas traditionally the American concern with any French vote is roughly equivalent with its concern with major elections in Tahiti, at this stage there is focus on it because a potential ‘no’ vote in France could collapse the dollar and Maastricht,″ said Richard B. Hoey, chief economist at Dreyfus Corp. in New York.

Both the dollar and the British pound are at historic lows against the German mark.

″If the French decline to ratify Maastricht, not only will the treaty be dead but the ructions in the exchange markets are likely to be convulsive,″ Hugo Young, political columnist for The Guardian, said Tuesday.

Britain will scrap treaty ratification if France fails to muster majority support for it.

German Chancellor Helmut Kohl appeared live on French television Thursday to assure voters that an affirmative vote would not create a German-dominated federation.

Italy, too, is worried about potential economic fallout from a French rejection, which could force devaluation of the already-embattled lira. This is seen as potentially fatal to the struggling Italian economy, with its high inflation and interest rates and its huge public deficit.

Danes, who rejected the treaty in June - the only Europeans to do so - are closely following the debate in France. Opponents say a vote against the treaty would be helpful to Danes, giving them more leverage in negotiating a new dispensation.

Irish voters approved the pact in their own referendum in June.

Spain and Portugal stand to gain if the treaty passes, as their economies are weaker than other EC members. Spanish Prime Minister Felipe Gonzalez, calling himself a ″convinced Europist,″ this week pleaded for French approval of the referendum.

The referendum has taken on greater significance in France because of a tendency to use turn referenda into no-confidence votes on the president.

Mitterrand, president since 1981, has seen his popularity tumble amidst slow growth, a 10.3 percent unemployment rate and a series of political and health scandals.

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