(FORTUNE Magazine) – The new conservative government of France, hemmed in by a widening deficit, doesn't have much room to maneuver. But at the same time, Prime Minister Edouard Balladur wants to set forth boldly on a different course from that set by Pierre Beregovoy, his socialist predecessor. Balladur's solution? Privatize the country's large state sector as fast as possible. The first sale could come as early as June. Most likely candidates include Rhone-Poulenc, a chemical and pharmaceuticals company, of which the government owns about 61%, and Elf-Aquitaine, an oil and gas giant (51%). Automaker Renault (75%) is another possibility. On its own, the French bourse could not raise the money the sales are likely to command -- the government's chunk of Elf alone is probably worth $10 billion -- and members of the new government say they will let foreigners buy in. Outlanders should look out for potentially unfair competition, however. During the country's big privatization in the 1980s, French institutional investors got discounted prices. The privatization candidates think their global business will pick up once the government bows out. Says Michel de Rosen, a Rhone-Poulenc director: ''When we talk to a capitalist in America's Midwest about a deal and he asks, 'Who is your biggest shareholder?' it's not so great to answer, 'The French state.' ''