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Economy of France

With a GDP of $2.865 trillion, France is the world’s fifth-largest economy. It has substantial agricultural resources, a large industrial base, and a highly skilled work force. A dynamic services sector accounts for an increasingly large share of economic activity and is responsible for nearly all job creation in recent years. Real GDP increased 0.3% in 2008. Although the Organization for Economic Cooperation and Development (OECD), IMF and the European Commission project that GDP will decline by 2.1%-2.4% 3% in 2009 (October-November 2009 forecast), this obscures the fact that France became one of the first European countries to officially exit recession by posting a 1.2% growth (quarter on quarter annualized) in the second quarter of 2009, and then 1.2% growth (annualized) in the third.

Government economic policy aims to promote investment and domestic growth in a stable fiscal and monetary environment. Creating jobs and reducing the high unemployment rate has been a top priority. The unemployment rate in metropolitan France increased to 9.1% in the second quarter of 2009 up from 7.6% in fourth quarter of 2008. France joined 10 other European Union countries in adopting the euro as its currency in January 1999. Since then, monetary policy has been set by the European Central Bank in Frankfurt. On January 1, 2002, France, along with the other countries of the euro zone, dropped its national currency in favor of euro bills and coins.

Despite significant reform and privatization over the past 15 years, the government continues to control a large share of economic activity: Government spending, at 52.7% in 2008, is among the highest in the G-7. The government continues to own shares in corporations in a range of sectors, including banking, energy production and distribution, automobiles, transportation, and telecommunications.

In 2008, in a move to advance France's competitiveness, the National Assembly passed four bills introduced by the French government to modernize the economy and improve the labor market. In October 2007, under President Nicolas Sarkozy's impetus, overtime work beyond the 35-hour work week was exempted from income taxes and payroll taxes, a move to encourage work and to increase work time. In July 2009, meanwhile, the French Parliament approved a controversial bill allowing more businesses to stay open on Sundays. Membership in France's labor unions accounts for approximately 5% of the private sector work force and is concentrated in the manufacturing, transportation, and heavy industry sectors. Most unions are affiliated with one of the competing national federations, the largest and most powerful of which are the communist-dominated General Labor Confederation (CGT), the Workers' Force (FO), and the French Democratic Confederation of Labor (CFDT).

France has been very successful in developing dynamic telecommunications, aerospace, and weapons sectors. With virtually no domestic oil production, France has relied heavily on the development of nuclear power, which now accounts for about 80% of the country's electricity production.

Trade
France is the second-largest trading nation in Western Europe (after Germany). France ran a $81 billion trade deficit in goods (Customs basis) in 2008. Total trade in goods for 2008 amounted to $1.290 trillion, over 45% of GDP, 62% of which was with the other EU-26 countries. In 2008, U.S.-France trade in goods and services totaled $154 billion. U.S. industrial chemicals, aircraft and engines, electronic components, telecommunications, computer software, computers and peripherals, analytical and scientific instrumentation, medical instruments and supplies, broadcasting equipment, and programming and franchising are particularly attractive to French importers. Total French trade of goods and services was $1.533 trillion in 2008.

Principal French exports to the United States are aircraft and engines, beverages, electrical equipment, chemicals, cosmetics, and luxury products. France is the eighth-largest trading partner of the United States.

Agriculture
France is the European Union's leading agricultural exporter, accounting for about 17% of all agricultural land within the EU-27. The share of agriculture in GDP has shown a steady decline since the early 1980s, representing less than 2.0% of France's GDP in 2007. Agricultural production not including subsidies increased 3.9% to €66.7 billion ($98.1 billion) in 2008. Northern France is characterized by large grain farms. Dairy, pork, poultry, and apple production is concentrated in the western region. Beef production is located in central France, while the production of corn, fruits, vegetables, and wine ranges from central to southern France. France is expanding its forestry and fishery industries. France remains extremely cautious about the cultivation of genetically modified (GM) plants at the domestic and EU levels. France is a proponent of the European preference principle and is attentive to protecting its interests in further agricultural trade liberalization at the EU and World Trade Organization (WTO) levels.

France is the world's second-largest agricultural producer, after the United States. The destination of 70% of its exports is other EU member states. Wine and beverages, wheat, meat, and dairy products are the principal exports. The United States, the sixth-largest exporter to France in recent data, faces stiff competition from domestic production, other EU member states, and third countries. U.S. agricultural exports to France-totaling $1.28 billion in 2008-consisted primarily of tree nuts, planting seeds, hides and skins, tobacco, red meats, seafood, hardwood lumber, and grapefruits. French agricultural exports to the United States amounted to $2.3 billion in 2008, half of it being wine and spirits.

GDP (2009): $2.66 trillion (preliminary) Avg. annual growth rate (2008): 0.3%, compared with 2.3% in 2007.
Per capita GDP at PPP (2008): $34,205 (preliminary)
Agriculture: Products--grains (wheat, barley, corn); wines and spirits; dairy products; sugar beets; oilseeds; meat and poultry; fruits and vegetables.
Industry: Types--aircraft, electronics, transportation, textiles, clothing, food processing, chemicals, machinery, steel.
Services: Types –Services to companies and individuals, financial and real estate activities, tourism and transportation
Trade: Exports (2008)--$604. billion (f.o.b.): automobiles, aircraft and aircraft components, pharmaceuticals, automobile equipment, iron and steel products, refined petroleum products, cosmetics, organic chemicals, electronic components, wine and champagne. Imports (2008)--$686 billion (f.o.b.): oil and natural gas, automobiles, aircraft and aircraft components, refined petroleum products, automobile equipment, pharmaceuticals, iron and steel products, and computers/computer-related products. Major trading partners--EU and U.S.
Exchange rate: U.S. $1=0.68 euro in 2008.

Geography of France

Area: 551,670 sq. km. (220,668 sq. mi.); largest west European country, about four-fifths the size of Texas.
Cities: Capital--Paris. Major cities--Marseille, Lyon, Toulouse, Strasbourg, Nice, Rennes, Lille, Bordeaux.
Terrain: Varied.
Climate: Temperate.

 

Government of France

The constitution of the Fifth Republic was approved by public referendum on September 28, 1958. It greatly strengthened the powers of the executive in relation to those of Parliament. Under this constitution, presidents were elected directly for a seven-year term since 1958. Beginning in 2002, the presidential term of office was reduced to five years and a constitutional reform passed on July 21, 2008 limits presidents to two consecutive terms in office. The president names the prime minister, presides over the cabinet, commands the armed forces, and concludes treaties. Traditionally, presidents under the Fifth Republic have tended to leave day-to-day policy-making to the prime minister and government; the five-year term of office is expected to make presidents more accountable for the results of domestic policies. Sarkozy, however, has been a hands-on manager and policymaker.

The president can submit questions to a national referendum and can dissolve the National Assembly. In certain emergency situations, with the approval of parliament, the president may assume dictatorial powers and rule by decree. The main components of France's executive branch are the president, the prime minister and government, and the permanent bureaucracies of the many ministries. Led by a prime minister, who is the head of government, the cabinet is composed of a varying number of ministers, ministers-delegate, and secretaries of state. Parliament meets for one nine-month session each year. Under special circumstances the president can call an additional session.

Under the constitution, the legislative branch has few checks on executive power; nevertheless, the National Assembly can still cause a government to fall if an absolute majority of the total Assembly membership votes to censure. The Parliament is bicameral with a National Assembly and a Senate. The National Assembly is the principal legislative body. Its deputies are directly elected to five-year terms, and all seats are voted on in each election. Senators are chosen by an electoral college and, under new rules passed in 2003 to shorten the term, serve for six years, with one-half of the Senate being renewed every three years. (As a transitional measure in 2004, 62 Senators were elected to nine-year terms, while 61 were elected to six-year terms; subsequently, all terms will be six years.) The Senate's legislative powers are limited; the National Assembly has the last word in the event of a disagreement between the two houses. The government has a strong influence in shaping the agenda of Parliament, although the constitutional reform passed on July 21, 2008 grants new authority to the Parliament to set its own agenda. The government also can declare a bill to be a question of confidence, thereby linking its continued existence to the passage of the legislative text; unless a motion of censure is introduced and voted, the text is considered adopted without a vote. The constitutional reform passed on July 21, 2008 has limited the process to the vote of the national budget, the financing of the social security, and to one bill per session of the Parliament. As of September 2009, impact assessment is mandatory for all draft laws going to the Council of State and the Parliament.

A distinctive feature of the French judicial system is that the Constitutional Council protects basic rights when they might be potentially violated by new laws and the Council of State protects basic rights when they might be violated by actions of the state. The Constitutional Council examines legislation and decides whether it conforms to the constitution. Unlike the U.S. Supreme Court, it considers only legislation that is referred to it by Parliament, the prime minister, or the president. Moreover, it considers legislation before it is promulgated. The Council of State has a separate function from the Constitutional Council and provides recourse to individual citizens who have claims against the administration. The Ordinary Courts--including specialized bodies such as the police court, the criminal court, the correctional tribunal, the commercial court, and the industrial court--settle disputes that arise between citizens, as well as disputes that arise between citizens and corporations. The Court of Appeals reviews cases judged by the Ordinary Courts.

Traditionally, decision-making in France has been highly centralized, with each of France's departments headed by a prefect appointed by the central government. In 1982, the national government passed legislation to decentralize authority by giving a wide range of administrative and fiscal powers to local elected officials. In March 1986, regional councils were directly elected for the first time, and the process of decentralization continues, albeit at a slow pace.

Principal Government Officials
President--Nicolas Sarkozy
Prime Minister--Francois Fillon
Foreign Minister--Bernard Kouchner
Ambassador to the United States--Pierre Vimont
Ambassador to the United Nations--Gerard Araud

France maintains its embassy in the U.S. at 4101 Reservoir Rd. NW, Washington, DC 20007 (tel. 202-944-6000); it is its largest diplomatic mission in the world.

POLITICAL CONDITIONS
After his inauguration in May 2007 as France's sixth president under the Fifth Republic, Nicolas Sarkozy focused his first months in office on improving the performance of France's economy through liberalization of labor markets, higher education, and taxes. In the April 22, 2007 first round of presidential elections, Sarkozy, the leader of the center-right Union for a Popular Movement (UMP) party, placed first; Socialist candidate Segolene Royal placed second; centrist Francois Bayrou placed third; and extremist Jean-Marie Le Pen placed fourth out of a field of 12 candidates. Sarkozy prevailed in the May 6, 2007 second round, defeating Royal by a 53.06% to 46.94% margin. Royal's loss marked the third straight defeat for the Socialist candidate in presidential elections.

President Sarkozy assumed office on May 16, 2007, the last day of Jacques Chirac's official term. Sarkozy named Francois Fillon Prime Minister. Jean-Louis Borloo became the second-highest ranking figure in the government, presiding over an expanded Ministry of Environment, renamed the Ministry of Ecology and Sustainable Planning. Legislative elections held on June 10 and 17, 2007 gave the UMP a large parliamentary majority. The UMP reinforced its ascendance over the Socialists by winning the June 7, 2009 European Parliament election with 27.88% of the vote, an increase of more than 11 percentage points over 2004. The Socialists finished a distant second, in a virtual tie with Europe Ecology, the French Green party. TheThe UMP’s next test comes in spring 2010, when French voters will elect local leadership for the 22 regions of mainland France and four additional overseas regions.

In electing Nicolas Sarkozy, French voters endorsed the wide-ranging program of reforms--including market-oriented social and economic reforms--that were the focal point of his campaign, implicitly giving him the green light to try and implement these reforms quickly, and allowing a way forward for overcoming France's 2005 rejection of the EU constitutional treaty. By embracing a figure long tagged as "pro-American," French voters also expressed their desire to renew trust in the U.S.-France relationship. During the campaign Sarkozy often ended his stump speeches--evoking Martin Luther King--by calling for a "French dream" of social equality, social mobility, and equal opportunity, and his first speech as President-elect assured his "American friends" that they could rely on France's friendship.

During his first year and a half in office, Sarkozy eliminated income taxes on overtime hours, lengthened the contribution period for retirees to receive full pensions, and established a "minimum service" requirement on strike days, among other reforms. He also completed a major revision of the French constitution, which gave parliament more oversight responsibility, particularly with respect to approval of long-term French military deployments abroad. French and EU analysts stress that longer-term reform measures must focus on reducing the future burden of ballooning public pension and health care budgets, as well as reducing labor-related taxes. Against a backdrop of gloomy economic news starting in late 2008, Sarkozy appears to have placed his reform agenda on a temporary hiatus. Despite low public approval ratings, however, President Sarkozy is governing at a time when the main opposition, the Socialist Party (PS), is fragmented and in the minority in both houses of parliament.

Type: Republic.
Constitution: September 28, 1958.
Branches: Executive--president (chief of state); prime minister (head of government). Legislative--bicameral Parliament (577-member National Assembly, 319-member Senate). Judicial--Court of Cassation (civil and criminal law), Council of State (administrative court), Constitutional Council (constitutional law). Subdivisions: 22 administrative regions containing 96 departments (metropolitan France). Thirteen territories outside metropolitan France: four overseas departments which are also regions (French abbreviation is DOM-ROM)--Guadeloupe, Martinique, French Guiana, and Reunion; six overseas collectivities ("Collectivités d'Outre-mer" or COM)--French Polynesia, Wallis and Futuna Islands, Saint-Pierre and Miquelon, Saint-Martin and Saint-Barthelemy Island, and Mayotte, which in March 2009 voted to become a full overseas department, and is likely to be recognized as such in 2011; one overseas country of France ("Pays d'Outre-mer" or POM)--New Caledonia; and the French Southern and Antarctic Territories and the atoll of Clipperton.
Political parties: Union for a Popular Movement (UMP--a synthesis of center-right Gaullist/nationalist and free-market parties); Socialist Party; New Center (former UDF centrists now affiliated with the UMP); Democratic Movement (former UDF centrists loyal to MoDem President Francois Bayrou); Communist Party; extreme right National Front; Greens; various minor parties.
Suffrage: Universal at 18.

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History of France

France was one of the earliest countries to progress from feudalism to the nation-state. Its monarchs surrounded themselves with capable ministers, and French armies were among the most innovative, disciplined, and professional of their day. During the reign of Louis XIV (1643-1715), France was the dominant power in Europe. But overly ambitious projects and military campaigns of Louis and his successors led to chronic financial problems in the 18th Century. Deteriorating economic conditions and popular resentment against the complicated system of privileges granted the nobility and clerics were among the principal causes of the French Revolution (1789-94). Although the revolutionaries advocated republican and egalitarian principles of government, France reverted to forms of absolute rule or constitutional monarchy four times--the Empire of Napoleon, the Restoration of Louis XVIII, the reign of Louis-Philippe, and the Second Empire of Napoleon III. After the Franco-Prussian War (1870), the Third Republic was established and lasted until the military defeat of 1940. World War I (1914-18) brought great losses of troops and materiel. In the 1920s, France established an elaborate system of border defenses (the Maginot Line) and alliances to offset resurgent German strength. France was defeated early in World War II, however, and was occupied in June 1940. In July, the country was divided into two: one section being ruled directly by the Germans, and a second controlled by the French ("Vichy" France) and which the Germans did not occupy. German and Italian forces occupied all of France, including the "Vichy" zone, following the Allied invasion of North Africa in November 1942. The "Vichy" government largely acquiesced to German plans, namely in the plunder of French resources and the forceful deportations of tens of thousands of French Jews living in France to concentration camps across Europe, and was even more completely under German control following the German military occupation of November 1942. Economically, a full one-half of France's public sector revenue was appropriated by Germany. After 4 years of occupation and strife, Allied forces liberated France in 1944. France emerged from World War II to face a series of new problems. After a short period of provisional government initially led by Gen. Charles de Gaulle, the Fourth Republic was set up by a new constitution and established as a parliamentary form of government controlled by a series of coalitions. The mixed nature of the coalitions and a consequent lack of agreement on measures for dealing with Indochina and Algeria caused successive cabinet crises and changes of government. Finally, on May 13, 1958, the government structure collapsed as a result of the tremendous opposing pressures generated by four years of war with Algeria. A threatened coup led the Parliament to call on General de Gaulle to head the government and prevent civil war. Marking the beginning of the Fifth Republic, he became prime minister in June 1958 and was elected president in December of that year. Also resulting from the Algerian conflict, were decades of increased immigration from the Maghreb states, which functioned to change the composition of French society. Seven years later, for the first time in the 20th Century, the people of France went to the polls to elect a president by direct ballot. De Gaulle won re-election with a 55% share of the vote, defeating François Mitterrand. In April 1969, President de Gaulle's government conducted a national referendum on the creation of 21 regions with limited political powers. The government's proposals were defeated, and de Gaulle subsequently resigned. Succeeding him as president of France have been Gaullist Georges Pompidou (1969-74), Independent Republican Valery Giscard d'Estaing (1974-81), Socialist François Mitterrand (1981-95), neo-Gaullist Jacques Chirac (1995-2007), and Nicolas Sarkozy (2007-present). While France continues to revere its rich history and independence, French leaders are increasingly tying the future of France to the continued development of the European Union. France was integral in establishing the European Coal and Steel Community in 1951 and was among the EU's six founding states. During his tenure, President Mitterrand stressed the importance of European integration and advocated the ratification of the Maastricht Treaty on European economic and political union, which France's electorate narrowly approved in September 1992. The center of domestic attention soon shifted, however, to the economic reform and belt-tightening measures required for France to meet the criteria for Economic and Monetary Union (EMU) laid out by the Maastricht Treaty. Since the September 11, 2001 attacks in the U.S., France has played a central role in the war on terrorism. French forces participate in Operation Enduring Freedom and in the International Security Assistance Force (ISAF) for Afghanistan. France did not, however, join the coalition that liberated Iraq in 2003. In October and November 2005, three weeks of violent unrest in the largely immigrant suburbs focused French attention further on their minority communities. Also in 2005 French voters disapproved the EU constitution in a national referendum. In the spring of 2006, students protested widely over restrictive employment legislation. In May 2007, Nicolas Sarkozy was elected as France's sixth president under the Fifth Republic, signaling French approval of widespread economic and social reforms, as well as closer cooperation with the United States.

People of France

Since prehistoric times, France has been a crossroads of trade, travel, and invasion. Three basic European ethnic stocks--Celtic, Latin, and Teutonic (Frankish)--have blended over the centuries to make up its present population. France's birth rate was among the highest in Europe from 1945 until the late 1960s. Since then, its birth rate has fallen but remains higher than that of most other west European countries. Traditionally, France has had a high level of immigration. More than 1 million Muslims immigrated in the 1960s and early 1970s from North Africa, especially Algeria. About 85% of the population is Roman Catholic, 10% Muslim, less than 2% Protestant, and about 1% Jewish. However, the government does not keep statistics on religious affiliation, and according to a January 2007 poll, 51% of respondents describe themselves as Catholic, and another 31% describe themselves as having no religious affiliation. In 2004, there were over 6 million Muslims, largely of North African descent, living in France. France is home to both the largest Muslim and Jewish populations in Europe. Education is free, beginning at age 2, and mandatory between ages 6 and 16. The public education system is highly centralized. Private education is primarily Roman Catholic. Higher education in France began with the founding of the University of Paris in 1150. It now consists of 91 public universities and 175 professional schools, including the post-graduate Grandes Ecoles. Private, college-level institutions focusing on business and management with curriculums structured on the American system of credits and semesters have been growing in recent years. The French language derives from the vernacular Latin spoken by the Romans in Gaul, although it includes many Celtic and Germanic words. Historically, French has been used as the international language of diplomacy and commerce. Today it remains one of six official languages at the United Nations and has been a unifying factor in Africa, Asia, the Pacific, and the Caribbean. Nationality: Adjective--French. Population (January 1, 2009 est.): 64.3 million (including overseas territories); 62.9 million (metropolitan). Annual growth rate (2008 est.): 0.6%. Ethnic groups: Celtic and Latin with Teutonic, Slavic, North African, Sub-Saharan African, Indochinese, and Basque minorities. Religion: Roman Catholic 85% (est.), Muslim 10% (est.), Protestant 2%, Jewish 1%. Language: French. Education: Years compulsory--10. Literacy--99%. Health: Infant mortality rate (2008)--3.36/1,000. Work force (2008): 28 million (preliminary): Services--74.7%; industry and commerce--22.0%; agriculture--3.2%.
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