The Guardian from London, Greater London, England • 5

OVERSEAS NEWS I A Saturday February 8 1986 5 French giants swing to profit Gramm-Rudman law is ruled to be unconstitutional Budget chaos faces US after court decision From Paul Webster in Paris confidence in the financial community that this time the Reagan Administration really means business about the budget. Even with the first round of Gramm-Budman cuts, the US deficit in 19S6 was expected to reach some $202 billion. Russians 'rr: in rescue Iflif on ice The cliief author of the measure, Senator Phil Gramm (Republican, Texas) said that the US Senate would file its appeal directly to the Supreme Court. He argued, however, that although the decision outlawed the mandatory cuts required by the original legislation, it upheld the bulk of The six huge industrial groups which were taken over in 1982 by the Socialist Government have undergone a spectacular and uncontestable" recovery, according to' an independent analysis published yesterday. Only one of six groups, which employ about 600,000 people, was profitable in 1982 but now only one is still in the red after three years of state-controlled management.

The rightwing investment magazine Nouvel Economiste which published the detailed' analysis of the nationalisations said the Government would not miss the chance of stressing the recovery during the election campaign for the March voting. The groups had been designated the spearhead of the Socialist industrial modernisation programme. President Francois Mitterrand, who went to Lille yesterday to attend a rally of 20,000 people in the stronghold of the former prime minister, Mr Pierre Mauroy, was given an exceptional chance to point out where the credit was due. The takeovers were inspired and overseen by Mr Mauroy who appointed most of the company chairmen who have engineered the recovery. Coupled with an excellent series of economic results, including a low inflation rate and a downturn in unemployment, the Socialists have been given a new campaign theme to attack the right whose confidence in a victorv in March MOSCOW Thousands of fishermen were rescued by helicopters, ropes, and makeshift bridges when the ice they were oh broke loose and was sent adrift From Alex rummer, in Washington The United States last night budgetary and financial chaos afttv a federal court struck down the Gramm-Rudman-Hollings law designed to eliminate the American budget deficit by 1991.

Immediately after the decision in a Washington court, shares and bond prices plummeted on Wall Street and US interest rates moved upwards. The markets have been extraordinarily strong in recent weeks on the expectation that the balanced budget law would force the politicians to take the tough decisions they have avoided. The three-judge federal court ruled that the Gramm-Rudman measure, which became law shortly before Christmas, was unconstitutional in that it vested excessive power in the US Congress. The bill authorises Congress to make automatic across-the-board cuts in the US Government's spending if it cannot agree voluntarily on such steps. In proposing his 19S7 budget on Tuesday.

Mr Reagan called for some $38 billion of public spending cuts to meet' the Gramm-Rudman targets. The court said that the Gramm-Rudman bill flies in the face of the constitutionally mandated separation of powers. As a result of the decision some $11.7 billion of public spending cuts which were to become effective on March 1 the act." He noted tnat the decision- only appeared to apply to the comptroller-general who is empowered to make budget reductions in the case of a deadlock. However, the comptroller's role has been seen by some budget experts as essential to the process. Without the discipline of mandatory cuts Congress would have no real incentive to meet the staged targets for budget reduction ordered by the Gramm-Rudman law.

Mr Gramm. argued that a back-up provision would come into effect bypassing the comptroller. These legal niceties did not impress Wall Street where share prices, already down 8.5 points before the court deci at Sakhalin Island, a newspaper reported yesterday. Komsomolskaya Pravda, the paper of the party youth league, said that the near-disaster happened last Saturday, but that no lives were lost and there were no injuries. It said that an estimated 10,000 fishing enthusiasts were spread out over a several square-mile area when, in mid-afternoon, a channel several yards wide anpeared, separating many of them from the shore.

The people made makeshift bridges from' skis, sticks, whatever was at hand, and used ropes, and pieces of ice as boats to get across," it said. Three helicopters evacuated about 100 people in a two-hour shuttle rescue efforts, it said, but hundreds more made it across otherwise. has been damaged by leader- smp quarrels. None of the big erouns. ex cept a computer firm, received any government subsidies last year and were ordered to pay dividends out of their profits into the national budget.

Tne timing of the economic magazine's flattering analysis sion, fell a further 10 points back well below the record 1600 level set on Thursday after the ruling. Last night's legal drama followed a court action brought by 12 members of Congress and a union of federal employees, worried that the Gramm-Rudman law would undermine their job-security and the pension rights of civil servants. will probably cause a further, revision of opposition pressure have been declared illegal. The court ruling said that these cuts from the current 1986 budget are hereby declared without legal force and effect." The smooth way in which the first Gramm-Rudman cuts were carried out had led to to denationalise only a matter of weeks after original proposals for large-scale privatisation was scaled down. RESCUE ON SAKHALIN ISLAND: Fishermen trapped on breaking ice make it to safety across an ice-bridge (top), while rescuers ('above) struggle to pull others to safety with ropes But the magazine points out that firms nationalised before 1982.

including Renault cars Financier offers No place East-West spy swap may and the railways, are still running at considerable losses and that steel, which was partly nationalised by former President Giscard d'Estaing, is still in the red although recovering. to go for to buy shuttle Climbdown over trial for Walesa By Michael Simmbn be big media event it is tne successful handling wife, Hana. Koecher, who worked as a contract translator But the deal won't be easy. Nasa has already heard similar of the complex industrial groups taken over, in 1982 from orivate; shareholders that From James Bernstein in Washington and consultant proposals irom Mr Rockwell in from February, 1973, to Ai 1975, is in custody await The Polish authorities have the Government will, stress, as well as the Jact that overall losses being made by all 23 state-owned industries have ing trial in New York on a decided there is no political count of conspiracy to commit capital to be gained form espionage for Czechoslovakia. been rduced by rigorous man putting Mr Lech Walesa on Two pro-government Johan- agement from 29 billion trial for slandering state officials.

He was due to appear francs (about 2.8 billion) to 9 billion francs. But the total oeiore a provincial court in deficit for all state-owned busi nesnurg newspapers saia. yesterday that it was doubtful that1 a former navy commander' convicted of spying for the Soviet Union would be part- of Gdansk next Tuesday. Duvalier! Eroni our own Corespondent in Paris AS the deposed President of Haiti, Mr Jean-Claude Duvalier, flew into Grenoble, in south-east France, last night in- an American air force plane, the French authorities were, preparing, restricted residence for him and his family somewhere in the Alpine part of the Haute Sa-voie department. Foreign Affairs officials insisted that the former dictator was "only in transit," until another country had accepted him for refuge, but there was no sign of any agreement.

Last night i'i was reported the Gabon, which was thought ready to give him refuse, had refused, West Berlin Preparations for a major East-West spy swap intensified in West Berlin yesterday, amid, diplomatic speculation that Us arid Soviet authorities could turn the handover into a dramatic media operation. A US official in charge of security, in West Berlin yesterday: visited the Glienicke the scene, of past secret handovers, and walked to its central line marking West Berlin from East Germany. He and three other US officials stood for about five minutes inspecting the frozen Havel waterway below and its West' Berlin bank. Western allied sources said they were also viewing other crossings to West Berlin from surrounding. Communist territory.

The inspection came as dozers of journalists and tele nesses reached; about 100 billion francs (nearly 10 billion) since 1982. The view being expressed publicly in Warsaw this week, and endorsed by Polish MPs Officials of the US Mission, which still holds sovereign powers in West Berlin, refused to confirm or deny press reports that the swap would take place on the bridge on Tuesday. Security fears were raised yesterday when an unidentified man carrying a bunch of flowers defied West Berlin police warnings and crossed the bridge's centre line on. to East German territory. He was led away by a Communist guard, and returned about half-an-hour later.

West Berlin police 'who interviewed him said he appeared confused and distressed. The US Government plans to give up an alleged Czech spy accused of penetrating the CIA as part of the swap, to gain the freedom of the Soviet dissident, Anatoly Shcharansky, Administration sources said yesterday. They said that the swap will include Karl Koecher and his tne spy swap. Tne -Citizen sain that intelligence sources were surprised at a report in Bild, a Tne most striking success who have visited London, is that the charges should never west German paper, that for have been brought, and that l84 ana from an economist, Mr Klaus Heiss, in 1982. The proposals were both rejected as Nasa has strict criteria for private investors to become involved in building a space shuttle.

Mr Paul JMisbet, an analyst for a securities firm, was pessimistic about the idea. "The likelihood that anyone is willing to. cough up substantial risk money is a pipe-dream," he said. "The risk has increased. Several small companies have sought financing to offer launch services, and none has been successful." Thousands of dollars donated as a tribute to the seven astronauts who perished in.

the shuttle disaster will be earmarked for a special fund to help build a new spacecraft, according to a US senator. Senator Jake Gam said he expected Congress to increase the Reagan Administration's mer Commodore 1 Dieter has been the profit turnaround for the chemical company, Rhone Poulenc, which the magazine says is a 'triumph." After being the the trial could now be post poned indefinitely. Only a few weeks ago, the man of the chemical industry official view, was that Mr an tnrougn tne iuus, tne group made profits of nearly Gerhardt was one of the spies to.be involved. Gerhardt was convicted in December, 1983, of spying for the Soviet Union since 1962. The Citizen said that information of military and naval activity was far too up-to-date for it to be a good risk to permit his release in any exchange at this stage." Reuter 200 million last year.

Meanwhile the heavy indus Walesa could face two years' imprisonment and a heavy fine for. having issued turnout figures for last October's poll. The figures were much lower than the Government's own estimates. It remains to be seen whether this decision is a victory for Mr Walesa, but it vision crews gathered here with mobile, homes and telephone lines. try group, CGE, which alone employs 155,000 people, increased profits by about 25 per cent last year to about 100 million although 10,000 jobs adding to earlier rejections' from Morocco, Switzerland, Argentina and Greece.

While the French Foreign Minister, Mr Roland Dumas, continued to telephone foreign governments in the The 'retired chairman of one of the biggest aerospace and defence companies in the US is proposing to offer Nasa $1.5 billion to build a shuttle to replace Challenger. Mr Willard "Al" Rockwell Jnr said directors of Rockwell International Corporation would make the money available as Nasa would be unable to get to replace the orbiter without impinging on their budget, the space station or some of their scientific "This is an attempt to step in and be of assistance to Nasa and the Government," he added. Mr Rockwell said he planned to make a formal proposal to Nasa within a few weeks. Charity is not his sole motivation, however. Mr Rockwell, chairman of Astrotech International, a manufacturer of super-alloy metals and auxiliary equipment for computers would own the new shuttle and lease it to Nasa An Astrotech subsidiary, General Space Corporation, would perform marketing services for the new shuttle.

Astrotech. Mr Rockwell said, was negotiating with a brokerage firm to raise SI billion through a private offering of 100 million shares of the company. Industry officials say the cost of building a new shuttle would be about $2.5 billion. If Mr Rockwell's offer were approved by the space agency, some analysts estimate the deal could prove to be wortli several billion dollars to the executive, already one of the country's richest men. His father, Colonel Willard Rockwell, began the giant aerospace firm in California.

It is now the prime contractor on Nasa's shuttle programme. went as part of the Government's modernisation programme. Pravda puts Reagan on line does seem to represent a climbdown by the authorities. wnue reporting oik profits In London this week. Mr for some well established na tionalised firms like Air Mieczyslaw Rakowski, former deputy crime minister, learned that trial is also a major France and the aerospace industry, the magazine points out that the big losers include preoccupation among writisn MPs.

British Government; concern established state industries like Renault. It lost about 1 billion last year. tience in Moscow witli the slowness of any formal Western reaction to Mr Mikhail Gorbachev's proposals' for complete nuclear disarmament by the end of the century. Pravda warned yesterday that even though the Soviet unilateral ban on nuclear tests had been extended time was running out. The state oft he Union address did not even mention the Gorbachev proposals.

"It is hard to find in the was also expressed in a meeting at the Foreign Office with the new Minister of State, Mr Timothy Benton. Mr Rakowski knows Mr proposed fiscal 1987 space programme budget of $7.7 billion, primarily because, of the $2 billion needed for' a new shuttle. Whatever was not appropriated for the shuttle by Congress would be supplemented by the public and private donations, he said. It has been reported in Washington that the White House has started an "accelerated search" for a permanent head of Nasa to replace indicted administrator Mr James Beggs. Officials said they were alarmed to learn after the disaster that Mr Beggs, though officially on indefinite leave, was still actively working at Nasa following his indictment in December on fraud charges unrelated, to the agency.

Newsday. Eleven justification for the course towards an unrestricted escalation of the arms race. The US intends to continue on the path which has already led mankind to an unprecedented arms race, a which leads to disaster." A personal attack of this kind on a head of state is unusual. Normally it is governments or particular figures within government that become lightning conductors for Soviet campaigns. The Defence Secretary, Mr Caspar has occupied this role in recent years.

The sharp and personal attack upon President Reagan, reflects the growing impa From Martin Walker in Moscow In the strongest personal attack on President Reagan since before the Geneva summit, a Pravda editorial yesterday condemned his State of the Union address as a1 manifestation of the rapacious, egotistical ideology of the most rightwing conservative groupings in America." The editorial claimed the speech returned to the discredited, bankrupt' ideas of a "crusade against socialism a tribute to the outdated modes of thinking of the cold war era. The President needed these false and groundless accusations against the Soviet "Union to provide a propaganda Walesa well and negotiated with him on numerous occasions during the time of Soli darity. He. says the Walesa prepare phenomenon has been over simplified in the West, but to sign tnat neither the party nor the Government had any wish to whole of his speech anything but the build-up of fear, hostility and hatred and the disguise of high-sounding and fanciful the editorial said, commenting sourly on President Reagan's "incanta-tory" style of speaking. put on a political trial.

upmion pous conducted Poland in recent weeks have shown nearly two out of three people questioned are still willing to admit their alle Mother in dingo case freed giance to Solidarity. The role of the union, and whether or not it deserves continued support, is still a mat Cuban visit 6 is on thfe Pope's agenda' hope of finding a refuge, officials said he was determined that Mr Duvalier should not be allowed to take up residence in Paris, where he has a fit in the Avenue Foch, nor is his recently bought eighteenth-century castle north of the capital. This is partly because the French Government is embarrassed, by the failure to find a hew home for the former; Emperor Bokassa, who has settled here with his wife and family in another castle near' Paris, despite constant attempts to persuade him to go elsewhere. The French decided, to give temporary residence to Mr Duvalier because of its colonial links 'with Haiti, which were' broken by independence in 1804 but which have been kept alive by the French language and economic iThe French Government will be about the safety of the former dictator, as there are 10,000 of his exiled countrymen here. Including many, former political prisoners who were tortured by.

his police. A permament heavy guard would have to be kept on him If he stayed. A Haitian exile spokesman, Mr Duly Brutus, said that he understood that the former French colony of Gabon was a possible, place of exile, but a spokesman: for the Gabo-ncse Omar. Bongo, said yesterday in Libreville that his country would not grant Duvalier political asylum. Western diplomatic sources said that President Mitterrand, facing crucial legislative elections in March, was anxious to play down his country's role in Duvaller's departure as much as possible, and a news blackout had been ordered oh his arrival.

Duvalier, who is 34, left Haiti after popular protests lagainst the regime founded by his father, "Papa Doc" Duvalier, whom he succeeded in 1971. ter tor argument in scnoois and colleges. Mr Rakowski, who returns to Warsaw this weekend, said last night he had been surprised From Derek Brown in Brussels Eleven of the 12 EEC countries are now firmly lined up to sign a Treaty of Rome reform package in Luxembourg on Monday week. The timing of the signing ceremony is fraught with significance for the Community. Ten days later, on February 27, there will be a referendum on the reform package in Denmark.

Latest opinion polls suggest that the Danes will vote for the reforms, which seek to bind the EEC countries in closer political and economic cooperation. A "no" vote could lead to Denmark's pulling out of the Community. The Danish minority of coalition, which backs the visit," said the editor, the Reverend Jan Palyga. "There is no date set vet. but I don't think it is going to oy tne less-tnan-tormai reception he: had been given by the Foreign Office and MPs.

oe tnis year. In a telephone interview the "The period of Poland's international isolation has ended," he said. editor said the Cuban diplomat hoped Cardinal Clemp, the Polish Primate, would support the idea and convey the proposal to the "Vatican. He said he did not know Cardinal Glemp's reaction to the proposal. He added that the point of such a 'visit would be to lessen the isolation of Cuba and also court battle.

Mrs Chamberlain was found guilty of murdering Azaria in October, 1982. An appeal was rejected and, although there. were several subsequent attempts the latest in November to have her freed because of the doubts surrounding prosecution evidence, she stayed in Darwin's Berrimah Prison-Neither Azaria nor a murder weapon were ever found. The change of heart was prompted by discov-. ery at Ayers Rock, of a baby's jacket in bizarre circumstances.

It was found-close to the body of a Briton who died after falling off the rock. Police, fearing a plant, were initially sceptical about the find, claiming that the area had been closely searched' at the time of Azaria's disappearance. The authorities decided on her release after the territory's police chief rilled that the jacket's discovery was a significant new element in the case. visers to prepare for the inquiry." The territory's Attorney-General, Mr Marshall Perron, said that Mrs Chamberlain's sentence had been remitted, and that regardless of the outcome of the new inquiry, she would not return to gaol. Mrs Chamberlain, who has three other eluded journalists "and went into hiding.

But her husband Michael, a Seventh Day Ad-ventist preacher, said in a brief statement he was thrilled and delighted. The mystery has gripped the Australian imagination and defied solution since Azaria disappeared on August 17, 1980. A first inquest accepted Mrs Chamberlain's story and cleared the couple but, following the discovery of fresh evidence, this was and a second inquest committed the couple fqr trial. Mrs Chamberlain and her hhsband, who recieved an 18-month suspended sentence, had maintained their innocence during a marathon AUSTRALIA'S longest running whodunnit yesterday took a new and dramatic turn as authorities freed Lindy Chamberlain, who was for three years ago for murdering her baby daughter, Azaria, at Ayers Rock in Australia's most sensational criminal case. Mrs Chamberlain, aged 37, was, freed after Northern Territory authorities announced a new inquiry.

Her release follows the discovery this week of a baby's tattered; jacket near Ayers Rock; in arid central Australia, where she always claimed the child was taken and killed toy a dingo wild dog during a camping holiday. Wr Perron said that Mrs Chamberlain's identification in gaol that the jacket was Azaria's was a irucial factor in her release. But he said the release did not recognise her innocence. Mrs Chamberlain's release at this time was done in order that she might properly have access to legal ad reforms, originally asked the other EEC governments to go ahead with the signing, to demonstrate to their own voters that the rest of the Community had determined on reform. Warsaw A senior official in the Roman Catholic Church here has said the Pope is planning a visit to Cuba.

Archbishop Bronislaw Pabrowski. the secretary of the Polish Catholic episcopate, made his remarks about a papal trip to Cuba in a speech to Warsaw nriests. according to Przeglad Katolicki. the official newspaper of the Warsaw archdiocese. The newspaper did not say when the Pope would travel to Cuba, his first trip there; or disclose further details about the archbishop's remarks.

Archbishop Dabrowski's secretary said in a telephone interview that he was ill and unbailable, for comment. The editor of a Polish Catholic magazine has said he was approached four months ago by a Cuban diploma in Warsaw who claimed the Cuban leader, Dr Fidel Castro, was interested in inviting the Pope to Cuba. "It seems the Cubans are doing all they can and they are very interested in the change the opinion about Dr In recent davs. however, sec tions of the Copenhagen Government had had second uastro ana aoout tneir unris-tianity that they are more open to different values than they seem to be in the opinion of others." Dr Castro had recently tried to imnrove his image among Catholics by granting an extensive interview about his views thoughts, and argued that the signing, oy toreign minister, could smack of the Community "ganging up" on the Danish electorate. on religion to a Brazilian They pushed for the signing monk, ho said.

to be postponed from February An official at the Cuban embassy in Warsaw refused to 17 to the next scheduled meet comment. The Vatican has not Mieczyslaw Rakowski told of British' concern ing of foreign ministers on March 10. confirmed any reports..