Raymond Barre, who has died aged 83, was known to remark that he was an academic not a politician, and thankful for it. Nevertheless, he spent a quarter of a century occupying a central place in French political life as prime minister, presidential candidate and mayor of Lyon, one of France's three great cities. He also had some claim to being one of the remote forefathers of the single European currency.
He was a conservative, especially in economic matters, but showed an independence of thought and speech unusual in French politics, not hesitating to praise his political opponents when he thought they deserved it and often dismissive of those on the right who were his nominal allies.
Born on the Indian Ocean island of Réunion, since 1946 one of France's overseas departments, Barre had parents whose families had been established there for generations. He moved to Paris for his higher education, graduating in economics and political science at the Institut d'Études Politiques (1950), and after teaching in Tunis (1951-54) was appointed professor at the University of Caen (1954-63), later taking up appointments in Paris. An economics textbook he wrote in 1955 is still used.
His first taste of government came in 1959, when he joined the private office of the industry minister Jean-Marcel Jeanneny. He also worked for the French national plan. In 1967, President de Gaulle dispatched him for five years to Brussels as one of the French EEC commissioners. He was a vice-president responsible for economic affairs and author of the Barre plan for monetary stability, later incorporated into the Werner report, the first move towards European economic and monetary union. He is also credited with having helped persuade de Gaulle not to devalue the franc after the événements of May and June 1968.
In the spring of 1976, Barre was appointed foreign trade minister in the government headed by prime minister Jacques Chirac. That summer, Chirac resigned to pursue his presidential ambitions, and President Valéry Giscard d'Estaing replaced him with Barre, whom he described as "the best economist in France". Barre combined the job with that of economics and finance minister, and introduced a series of measures designed to cut inflation; among them, personal tax and social security increases, and wage and price freezes, the aim being to divert money into investment. Given the international inflation and economic turmoil of the 1970s, the results were initially as good as those in some other countries, but the Barre years saw the start of the steady rise in unemployment, which peaked at over 3 million in the 1990s.
In the spring of 1978, it seemed as if the left, after its success in local elections the year before, was at last about to win political power in the forthcoming general election. The outgoing government fought on the snappy slogan "Barre confiance" (Barre - confidence) and, slightly unexpectedly, won: the alliance between Chirac's RPR and the UDF, the loose alliance of small centre-right groupings, securing a clear majority. Much of the credit had to go to Barre, whose affably professorial manner and rotund form reassured an electorate unsure whether it was ready for François Mitterrand and George Marchais, respectively the socialist and communist leaders.
Barre won a safe seat in Lyon, which he retained in subsequent elections. But the 1978 election was the climax of his political career. In 1980, his famous gift for speaking his mind let him down when, after the bombing of a Paris synagogue, he denounced an attack "which was aimed at Israelites going to the synagogue and hit innocent French people". By 1981, his economic policies had failed to quell inflation, which had risen to more than 13%, he was establishing new records of unpopularity and the country was ready for change. He was sidelined during Giscard's unsuccessful campaign for reelection, and, when Mitterrand arrived at the Elysée palace and the left won the subsequent general election, his days as premier were over.
A more political animal than Barre might have seized the chance to create a new centre-right party, instilling some discipline into the quarrelsome and fissiparous groups that still make up the UDF, welding it into a real rival to the RPR. But Barre was not, by temperament or instinct, the man to do it. He returned to the academic world, while remaining a deputy in the national assembly.
Once he was out of government, his standing rose and he maintained his political contacts. When the socialists' economic policies ran into difficulties and an embarrassing reverse became necessary, Barre was listened to with renewed attention. People appreciated that he said what he thought and thought what he said. He found himself in demand as a speaker and launched a regular political newsletter. Networks of supporters were created.
In 1988, encouraged by favourable opinion poll results and convinced there was a role for a centrist candidate, he stood for the presidency as UDF candidate (though he was never an official member of any party) against the incumbent Mitterrand and Chirac. He might well have made a fine president, but as a candidate he was a conspicuous failure. His campaign was ill-organised and incoherent, his poll ratings collapsed and he was eliminated in the first round, scoring only 16.5% of the vote.
That might have been the end of his political career, but he kept his parliamentary seat and when, in 1995, the RPR mayor of Lyon was convicted of fraud and the political right in the city thrown into disarray, Barre found himself called on to lead the conservative forces in that year's municipal election.
The result was a hung council, but Barre was elected mayor - insisting he would serve one six-year term only - and contrived to run the city with bipartisan support. Chirac made him a handsome present by choosing Lyon to host the 1996 G7 meeting, concentrating international attention on the city, which Barre threw his considerable energies into promoting. His name regularly surfaced as a possible prime minister when there was talk of a government reshuffle, and there is some evidence that he contemplated a second presidential bid in 1995.
A practising Catholic, Barre fully appreciated the good things in life, including food, wine and his Côte d'Azur villa. He enjoyed travelling the world, often with his Hungarian-born wife Eve, for those meetings at which world figures no longer in power gather to discuss the affairs of the planet. He was an old-fashioned, courteous man - pompous, some found - with a formality of manner and speech and a fine line in irony. He despaired of the innate reluctance of the French to contemplate change and could be moved to fury by the privileges enjoyed - and, in his view, shamefully abused - by public sector workers. He was once described as a square man in a round body.
He is survived by Eve and sons Olivier and Nicholas.
· Raymond Barre, economist and politician, born April 12 1924; died August 25 2007