When François Mitterrand won the presidential elections over Giscard in 1981, he embodied all the hopes of a generation of Socialists who had never seen their party in power. Headed by Pierre Mauroy as prime minister and including four Communist ministers, the Socialists ' first government after 23 years in opposition started off bright, popular and optimistic. It was committed to an increase in state control over industry, high taxation for the rich, more power to local government, a public spending programme to raise the living standards of the least well-off and support for liberation struggles around the world. For Mitterrand, European integration was of great importance - France was after all, one of the founder members of the EEC - but was a primarily political rather than economic project, to ensure peace and security and to create a counterweight to American hegemony. By 1984, however, the flight of capital, inflation and budget deficits had forced a complete volte-face. The new prime minister, Laurent Fabius , presided over a cabinet of centrist to conservative "socialist" ministers, clinging desperately to power. Their 1986 election slogan was "Help - the Right is coming back", a bizarrely self-fulfilling message.

The Socialist government had lifted the ban on immigrants forming their own organizations, given a ten-year automatic renewal of permits and even promised voting rights. Able to organize for the first time, immigrant workers staged protests at the racist basis of lay-offs in the major industries. The Front National responded with the age-old bogey of foreigners taking jobs from the French; the Gaullists joined in with the spectre of falling birth rates (a French obsession since 1945); and both benefited in the 1986 elections. With a clear right-wing majority in parliament, Mitterrand appointed Jacques Chirac as prime minister, so beginning cohabitation - the head of state and head of government belonging to opposite sides of the political fence.

Although throughout 1987 the chances of Mitterrand's winning the presidential election in 1988 seemed very slim, Chirac's economic policies of privatization and monetary control failed to deliver the goods. He not only reversed the preceding socialist nationalizations, but also sold off banks and industries that de Gaulle had taken into the public sector after 1945. Unemployment rose steadily, and Chirac made the fatal mistake of flirting with the extreme Right.

As prime minister, Chirac instituted a series of anti-immigration laws that were jointly condemned by the Archbishop of Lyon and the head of the Muslim Institute in Paris. Several leading politicians in the government's coalition partners, including Simone Weil , a concentration-camp survivor, denounced Chirac's concessions to Le Pen and human rights groups. Churches and trade unions joined immigrants' groups in saying that France was on its way to becoming a police state. Mitterrand, the grand old man of politics, with decades of experience, played off all the groupings of the Right in an all-but-flawless campaign and won another mandate.

Mitterrand's party, however, failed to win an absolute majority in the parliamentary elections soon afterwards. The austerity measures of his new prime minister, Michel Rocard , upset traditional Socialist supporters in the public-service sector. He ruled out renationalization and allowed partial privatizations. Subsidies to large state-owned firms continued, but there was no coherent industrial strategy. Though Chirac's programs were halted, they were not reversed. Strikes failed to halt lay-offs in the mines, shipyards, transport and the denationalized industries.

On returning to power, the Socialists also played electoral games with the immigration issue, reneged on the vote promise and failed to tackle the social and economic deprivation of France's immigrant ghettos. Polls showed over two-thirds of the adult French population to be in favour of deporting legal immigrants for any criminal offence or for being unemployed for over a year. Le Pen's proposals that immigrants should have second-class citizenship, segregated education and separate social security also received widespread support.

The 1980s ended with the most absurd blow-out of public funds ever - the bicentennial celebrations of the French Revolution . They symbolized a culture industry spinning mindlessly around the vacuum at the centre of the French vision for the future. And they highlighted the contrast between the unemployed and homeless begging on the streets and the limitless cash available for prestige projects.

In 1991, Mitterrand sacked Michel Rocard and appointed Édith Cresson as France's first woman prime minister. Her brand of left-wing nationalist rhetoric combined with centrist pragmatism made her highly unpopular at home and abroad. Furthermore, she jumped on the rampant racism bandwagon and said that special planes should be chartered to deport illegal immigrants. Kofi Yamgname, the minister for integration and only black member of the Socialist cabinet, suggested that immigrants who maintained traditional habits should go home. In 1992 the International Federation of Human Rights published a highly critical report on racism in the French police force and said France "was not the home of human rights".

Ironically, throughout the postwar years, France has maintained an independent and nationalist-oriented foreign policy , presenting its stance as a combination of French prestige and promotion of liberté, égalité and fraternité . In major conflicts France always tries to play a key role (and, as one of the five permanent members of the UN Security Council, it gets a say). However, high-profile diplomacy has given way to unprestigious military action, as in the Gulf War when the small French force was under American command. Mitterrand's visit, under gunfire, to Sarajevo in July 1992 was universally applauded, yet at the same time the French were reluctant to commit troops for UN actions in former Yugoslavia .

The important Maastricht referendum, held in 1992, split the Right and widened the gulf between the Socialists and Communists. Only the extreme end of the political spectrum, the Communists and the Front National remained determinedly anti-Europe. The voters divided along the lines of the poorer rural areas voting "No" and the rich urbanites voting "Yes". The very narrow margin in favour was a considerable disappointment to Mitterrand, but all the parties suffered.

Scandals over cover-ups and corruption that had erupted under Fabius continued to dog the Socialists, and in 1992 Cresson was replaced with Pierre Bérégovoy . He survived a wave of strikes by farmers, dockers, car workers and nurses, but then news broke of a private loan from a friend of Mitterrand accused of insider dealing. Mitterrand distanced himself from his prime minister, the Socialists were routed in the 1993 parliamentary elections, and Bérégovoy shot himself two months later, on May Day, leaving no note of explanation.

The new prime minister, Edouard Balladur , a fresh and fatherly face from the Right, soon lost the respect of his natural supporters after a series of U-turns following demonstrations by Air France workers, teachers, farmers, fishermen and school pupils, and the state's rescue of the Crédit Lyonnais bank after spectacular losses. Now popularly known as the Débit Lyonnais, the bank had to be bailed out to the tune of 100 billion FF (or £1000 per taxpayer), having run up colossal debts through dodgy speculative investments. Blame could also be laid at the Socialist administration's door - for failing to appoint competent management at Crédit Lyonnais.

The change in government in 1993 heralded a new privatization programme and ever greater reliance on market forces . The central French Bank was made independent in 1993; many now say it takes instructions straight from the Bundesbank. As in Britain, French banks, whether private or public, prefer short-term speculation in money and property markets rather than long-term investment in industry.

Mitterrand tottered on to the end of his presidential term, looking less and less like the nation's favorite uncle. Two months after Bérégovoy's suicide, Réné Bousquet, head of police in the Vichy government and responsible for the rounding up of Jews in 1942, was murdered. A personal friend of Mitterrand's, he was thought to have carried shady secrets about the president to his grave. On the twentieth anniversary of President Pompidou's death in April 1994, there was a wave of nostalgia for a time when "things were right and proper". Allegations of corruption against mayors, members of parliament, ministers and leading figures in industry were becoming an almost weekly occurrence. In 1994 a member of parliament leading a crusade against drugs and corruption on the Côte d'Azur was assassinated. Instead of increasing democracy, decentralization appeared to have licensed fraud and nepotism on an alarming scale. Several mayors ended up in jail, but it seemed as if the Paris establishment was above the law.

Meanwhile, France continued to stay outside NATO and sustain its own nuclear arsenal , for which there has long been cross-party consensus, and indeed national pride. In 1994 both sides in parliament approved huge increases in defense spending.

In 1994 a group of intellectuals, including the philosophers Bernard-Henri Lévy and André Glucksmann, ran a "Sarajevo" campaign to put Bosnia at the centre of the European debate, and received considerable support. By 1995 France was annoying its allies by taking unilateral action and accusing Britain and the US of Munich-style appeasement. In 1994, France sent troops into Rwanda , whose previous murderous government they had supported and armed. French troops were accused of giving protection to French-speaking Hutus responsible for the genocide, and of acting too late to save any of the English-speaking Tutsis. The policy backfired with the new regime in Rwanda taking an anti-French line and the unresolved conflicts spreading to the neighbouring former French colony, Zaire.

The fragmentation of the parties in the 1994 European elections saw the RPR/UDF lose votes to the anti-Europeans whilst the maverick left-wing crook Bernard Tapie took votes from the PS, which seemed to be in terminal decline.

In 1995, with Mitterrand dying from cancer but refusing to step down before the end of his term, revelations surfaced about his war record as an official in the Vichy regime before he joined the Resistance. A biography of Mitterrand, Le Grand Secret , detailing a whole host of scandals, was banned in France but avidly read on the Internet.

The Socialist Party was desperate for the popular Jacques Delors , who, as chair of the European Commission, saw Europe as having a strong social dimension, tackling unemployment, raising living standards, regulating the free play of global market forces and strengthening human rights, to stand as their presidential candidate and do the same on a national level. Instead they had to make do with Lionel Jospin , the rather uncharismatic former education minister, who performed remarkably well, topping the poll in the first round in which right-wing votes were split between Balladur, Chirac, the extremist Le Pen (who scored 15.5 percent) and the anti-European Philippe de Villiers. Chirac stole the Left's clothes by placing unemployment and social exclusion at the centre of his manifesto, and heaped promises of better times on every section of the electorate. He won, by a small margin, and was inaugurated as the new president of France in May 1995.

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