France: Economic and Political Outline

Economic Overview

The international financial crisis of 2009 led France into a recession, the French economy shrinking by 2.5%. The country has nonetheless resisted this development better than the eurozone average, thanks to a more diversified economy a more solid banking system, as well as a massive stimulus plan. The GDP improved in 2010-2011, mostly driven by the resumption of international trade, however the eurozone sovereign debt crisis put an end to this brief upturn. The economy is now again in a slowdown and the growth foreseen for 2012 is only 0.5%.

With public debt approaching 90% of GDP and a high bank exposure to the struggling eurozone countries, France remains particularly vulnerable. In light of the upcoming presidential elections, the economic policy pursued by the Sarkozy government is trying to reclaim a disgruntled electorate. The German model is put forward as a solution to resume growth and increase employment. Priority is also given to restoring public finances through a policy of fiscal restraint. The government announced its intention to introduce a social VAT to finance a reduction in the employers' social contributions and a tax on financial transactions (Tobin tax), as well as to release funds for partial unemployment and for training the unemployed.

Due to the crisis, the unemployment rate, estimated at 9.8% in 2011, has reached its highest level in 12 years and should continue to worsen in 2012.

Main Sectors of Industry

France is the biggest agricultural power in the European Union, accounting for a quarter of its total agricultural production, and the second agricultural power in the world after the United States. Nevertheless, the agricultural sector only represents a very small part of the country's GDP. It receives significant subsidies, especially from the European Union. Wheat, corn, meat and wine are France's main agricultural products.

France's manufacturing industry is varied, however, the country is in the middle of undergoing a de-industrialization process which translates into numerous relocations. The key industrial sectors in France are telecommunications, electronics, cars, aerospace and weapons.

The tertiary sector represents about three-fourths of the French GDP and employs almost 75% of the active workforce. France is the leading-tourist destination in the world with more than 75 million foreign tourists every year.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

64.6/100

Position:

Moderately free

World Rank:

60/179

Regional Rank:

28/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

Ministry of the Economy, Finance and Industry
Ministry of agriculture and fisheries
Ministry of small and medium enterprises, commerce, the craft industry and liberal professions

Statistical Office

French Institute of Statistics (INSEE)

Central Bank

The European Central Bank
The Bank of France

Stock Exchange

Euronext

Other Useful Resources

Documentation center for Economy-Finance

Main Online Newspapers

Le Monde (only in French)
Le Figaro (only in French)
Challenges (in French and English)
Libération (only in French)
Les Echos (only in French)
La Tribune (only in French)

Political Outline

Type of State

Republic, parliamentary democracy combined with presidential power.

Executive Power

The President of the Republic is the Head of State. He is elected by direct universal suffrage for 5 years. He appoints the Prime Minister and his government at the suggestion of the Prime Minister. The Prime Minister sets the amount of the State's expenses and revenue, and prepares some bills.

Legislative Power

The parliament is composed of the Senate and the National Assembly. Senators are elected by indirect universal suffrage for 9 years renewable by a one-third majority vote every 3 years. The deputies (MPs) are elected by direct universal suffrage. They examine bills and private bills successively, vote laws and monitor the government.

Main Political Parties

The French Right is made up of the Union for a Popular Movement (UMP), the majority party, the Union for French Democracy (New UDF) and the Democratic Movement (MoDem) situated more to the Center and the National Front (FN) which is on the extreme right.
The Left brings together the Socialist Party (PS), the Greens (Ecologists), the French Communist Party (PCF) and various extreme left parties.

Current Political Leaders

President : Nicolas Sarkozy (since May 2007) - UMP
Prime Minister : François Fillon (since May 2007) - UMP

Next Election Dates

Presidential and Parliamentary elections: 2012

Indicator of Freedom of the Press

World Rank:

38/179

Evolution:

6 places up compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).