Indeed, France was forced to pursue economic policies quite contrary to those that Washington hoped to see: state trading through the French Supply Missions abroad, periodic devaluations, and extensive government control of capital movements and trade. Until the problem of France's trade deficits could be solved which, as a prerequisite, meant increased production and stepped-up exports France could not support the kinds of multilateral policies that the United States demanded. But increased production could only come about through expansionary, and inevitably inflationary, government policies and through increased imports, both of which aggravated the trade deficit. This infernal cycle endangered the entire plan for French reconstruction.
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Another threat to the French reconstruction plan that had to be resolved through diplomatic channels was the shortage of coal in Europe. France habitually imported between 30 and 45 percent of its coal needs in the interwar period. Although by the middle of 1946 domestic coal production had achieved its 1938 level, imports lagged woefully, largely because German coal resources were as yet limited, and because American coal was so expensive that imports from the United States aggravated an already desperate balance-of-payments situation. By the end of 1946, French observers were reporting that German coal production was recovering and that France ought to press its claims for access to this increased supply. With German coal costing only $ 14 per ton, as against American coal at $ 22 per ton, the French clearly had a strong financial interest in greater imports of German coal, in addition to their politicoeconomic goal of slowing German recovery in favor of France's own.
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The need for German coal was all the more acute in light of the alarming report of Philip to the CEI in early March showing that because of a falloff in foreign labor and the repatriation of the German POWs working in French mines, the 55.5 million tons of domestic coal production that the Monnet Plan had envisaged for 1947 could not be met. As a consequence, the production levels of iron, steel, electricity, and gas would not meet their projected increases either. Ultimately, the coal shortage might lead to cutbacks in expenditures for the merchant marine, public works, building construction, shipbuilding, and the military.
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Not surprisingly, the Ministry of National Economy now believed that ''the entire economic outlook is dominated by the coal problem." Alphand at the Quai went even further: "substantial and regular deliveries of German coal are an indispensable element in the return of France to her industrial strength, and by consequence, to her political influence." Coal was vital to domestic and international recovery.
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