Economy of France: Wikis

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Economy of France
Ladefensepartienord.jpg
La Défense is a major business district in Paris
Currency 1 euro (€1) = 100 cent
Fiscal year Calendar year
Trade organisations EU, WTO and OECD
Statistics
GDP $2.113 trillion nominal : $2.635 trillion List of countries by GDP (nominal)
GDP growth -2.1% (2008) [2]
GDP per capita Nominal : $46,016 (2008) PPP : $32,800 (2009)
GDP by sector agriculture (2.1%), industry (19%), services (78.9%) (2009 est)
Inflation (CPI) 1.5% (2007) [3]
Population
below poverty line
6.2% (2004)
Labour force 27.88 million (2006)
Labour force
by occupation
services (71.8%), industry (24.3%), agriculture (3.8%) (2009)
Unemployment 10.1% (January 2010)[1]
Main industries machinery, chemicals, automobiles, metallurgy, aircraft, electronics; textiles, food processing; tourism
External
Exports $456.8 billion (2009)
Export goods machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, beverages, electronica
Main export partners Germany 14.7%, Spain 9.6, Italy 8.7%, United Kingdom 8.3%, United States 7.2%, Belgium 7.1% (2005)
Imports $532.2 billion (2009) [4]
Import goods machinery and equipment, vehicles, crude oil, aircraft, plastics, chemicals
Main import partners Germany 18.9%, Belgium 10.7%, Italy 8.2%, Spain 7%, Netherlands 6.5%, United Kingdom 5.9%, United States 5.1% (2005)
Public finances
Public debt $2.100 trillion (79.7% of the GDP) (2006)
Revenues $1.150 trillion (2006)
Expenses $1.211 trillion (2006)
Economic aid donor: ODA $10.1 billion (2006) [5]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars
This article addresses the current economic situation of France. For historical information, see Economic history of France.

The economy of France is a mixed economy which is the fifth largest in the world in nominal terms, behind the United States, Japan, China, and Germany,[2] and the seventh largest by purchasing power parity. It is the second largest economy in Europe behind Germany.[2] On May 15, 2009, the INSEE announced that France has officially entered a recession after its GDP decreased by 1.2% of Q1 in 2009.[3]

Contents

Rise and decline of dirigisme

France embarked on an ambitious and very successful programme of modernization under state impulse and coordination. This program of dirigisme, mostly implemented by left-wing governments, involved the state control of certain industries such as transportation, energy and telecommunication infrastructures as well as various incentives for private corporations to merge or engage in certain projects.

However, dirigisme came to be highly contested after 1982 when newly elected socialist president François Mitterrand called for increased governmental control in the economy, nationalising many industries and private banks. By 1983, the government decided to renounce dirigisme and start the era of rigueur ("rigour") or corporatization. As a result the government largely retreated from economic intervention; dirigisme has now essentially receded though some of its traits remain.

Despite significant liberalisation over the past 15 years, the government continues to play a significant role in the economy: government spending, at 53% of GDP in 2001, is the highest in the G-7. Labour conditions and wages are highly regulated. The government continues to own shares in corporations in a range of sectors, including banking, energy production and distribution, automobiles, transportation, and telecommunications which differs from countries like the U.S or U.K where most of these companies are privatised.

Sectors of the economy

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Industry

France, as with many modern industrialised nations, has a large and diverse industrial base. Leading industrial sectors in France are telecommunications (including communication satellites), aerospace and defense, ship building (naval and specialist ships), pharmaceuticals, construction and civil engineering, chemicals, and automobile production (3.5m units in 2005).

Research and development spending is also high in France at 2.3% of GDP, the third highest in the OECD.[4] yo mama

Energy

With no domestic oil production, France has relied heavily on the development of nuclear power, which now accounts for about 78% of the country's electricity production, up from only 8% in 1973, 24% in 1980, and 75% in 1990. Nuclear waste is stored on site at reprocessing facilities.

In 2006 of electricity in France amounted to 548.8 TWh, of which:[5]

  • 428.7 TWh (78.1%) were produced by nuclear power generation
  • 60.9 TWh (11.1%) were produced by hydroelectric power generation
  • 52.4 TWh (9.5%) were produced by fossil fuel power generation
  • 6.9 TWh (1.3%) were produced by other types of power generation (essentially waste-to-energy and wind turbines))
    • The electricity produced by wind turbines increased from 0.596 TWh in 2004, to 0.963 TWh in 2005, and 2.15 TWh in 2006, but this still accounts only for 0.4% of the total production of electricity (as of 2006).

Privatisation of EDF

In November 2004, EDF (which stands for Electricité de France), the largest electricity provider in France, was floated on the French stock market, with the French State keeping more than 70% of the capital. EDF is not the only electricity provider in France. Other electricity providers include CNR (Compagnie nationale du Rhône) and Endesa (through SNET).

Agriculture

France is the European Union's leading agricultural producer, accounting for about one-third of all agricultural land within the EU. Northern France is characterized by large wheat farms. Dairy products, pork, poultry, and apple production are concentrated in the western region. Beef production is located in central France, while the production of fruits, vegetables, and wine ranges from central to southern France. France is a large producer of many agricultural products and is currently expanding its forestry and fishery industries. The implementation of the Common Agricultural Policy (CAP) and the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) have resulted in reforms in the agricultural sector of the economy.

France is the world's sixth-largest agricultural producer and the second-largest agricultural exporter, after the United States[citation needed]. However, the destination of 70% of its exports are other EU member states and many poor African countries (including its former colonies) which face serious food shortage. Wheat, beef, pork, poultry, and dairy products are the principal exports. The United States, although the second-largest exporter to France, faces stiff competition from domestic production, other EU member states, and third world countries. U.S. agricultural exports to France, totalling some $600 million annually, consist primarily of soybeans and products, feeds and fodders, seafood, and consumer oriented products, especially snack foods and nuts. French exports to the United States are mainly cheese, processed products and wine.

The French agricultural sector is heavily dependent upon subsidies from the European Union, which account for €11 billion. France is the main country in the EU that is against the reduction of subsidies. Subsidies have given France a competitive advantage which also demotes the concept of free trade. Specific government policies, such as the infamous reclassification of French wine as a 'health food' to avoid VAT, also goes a long way to create a thriving domestic sector.

Tourism

The Palace of Versailles is one of the most popular tourist destinations in France.

With 81.9 million foreign tourists in 2007,[6] France is ranked as the first tourist destination in the world, ahead of Spain (58.5 million in 2006) and the United States (51.1 million in 2006). This 81.9 million figure excludes people staying less than 24 hours in France, such as northern Europeans crossing France on their way to Spain or Italy during the summer. France features cities of high cultural interest (Paris being the foremost), beaches and seaside resorts, ski resorts, and rural regions that many enjoy for their beauty and tranquillity (green tourism). France also attracts many religious pilgrims to Lourdes, a town in the Hautes-Pyrénées département, that hosts a few million visitors a year.

Popular tourist sites include: (according to a 2003 ranking[7] visitors per year): Eiffel Tower (6.2 million), Louvre Museum (5.7 million), Palace of Versailles (2.8 million), Musée d'Orsay (2.1 million), Arc de Triomphe (1.2 million), Centre Pompidou (1.2 million), Mont-Saint-Michel (1 million), Château de Chambord (711,000), Sainte-Chapelle (683,000), Château du Haut-Kœnigsbourg (549,000), Puy de Dôme (500,000), Musée Picasso (441,000), Carcassonne (362,000).

Weapons industry

France is the fourth largest weapons supplier in the world. The French arms industry's main customer, for whom they mainly build warships, guns, nuclear weapons and equipment, is the French Government. Furthermore, record high defense expenditure (currently at €35 billion), which was considerably increased under the government of Prime Minister Jean-Pierre Raffarin, have contributed to the success of the French arms industries. In addition, external demand plays a big part in the growth of this sector: for example, France exports great quantities of weaponry to the United Arab Emirates, Brazil, Greece, India, Pakistan, Taiwan, Singapore and many others.

External trade

French exports in 2006

France is the second-largest trading nation in Europe (after Germany).[8] Its foreign trade balance for goods had been in surplus from 1992 until 2001, reaching $25.4 billion (25.4 G$) in 1998; however, the French balance of trade was hit by the economic downturn, and went into the red in 2000, reaching US$15bn in deficit in 2003. Total trade for 1998 amounted to $730 billion, or 50% of GDP—imports plus exports of goods and services. Trade with European Union countries accounts for 60% of French trade.

In 1998, U.S.-France trade totalled about $47 billion—goods only. According to French trade data, U.S. exports accounted for 8.7%--about $25 billion—of France's total imports. 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.

The principal French exports to the United States are aircraft and engines, beverages, electrical equipment, chemicals, cosmetics, luxury products and perfume. France is the ninth-largest trading partner of the U.S.

Regions economy

The economic disparity between French regions is not as high as that in other European countries such as Spain, Italy or Germany.

The most important regions are Ile-de-France (4th agglomerations for her economy in the world), Rhônes-Alpes (6th economic european region thanks to its services, high-technologies, chimical industries, wines, tourism), Provence-Alpes-Côtes d'Azur (services, industry, tourism and wines), Nord-Pas-de-Calais (industries) and Pays de la Loire.

Regions like Alsace, which has a rich past in industry (machine tool), are relatively wealthy without ranking very high in absolute term.

The rurals area are mainly in Auvergne, Limousin, and Centre, and wines productions account for a significant amount of the economy in Aquitaine (Bordeaux region), and champagne for Champagne-Ardennes.

List of French regions ranked by GDP total and per capita.

Rank Region GDP
(in millions euros, 2005)
GDP per capita
(euros, 2005)
1 Île-de-France 480 870 42 712
2 Rhône-Alpes 165 034 28 131
3 Provence-Alpes-Côte d'Azur 120 365 25 693
4 Nord-Pas de Calais 86 747 21 555
5 Pays de la Loire 84 990 25 401
6 Aquitaine 76 895 25 374
7 Bretagne 73 511 24 443
8 Midi-Pyrénées 67 486 25 140
9 Centre 61 968 25 005
10 Languedoc-Roussillon 53 197 21 752
11 Lorraine 53 013 22 769
12 Alsace 46 870 26 196
13 Haute-Normandie 44 864 24 923
14 Picardie 41 276 22 022
15 Poitou-Charentes 39 286 23 311
16 Bourgogne 38 733 23 880
17 Champagne-Ardenne 33 550 25 093
18 Basse-Normandie 33 253 23 099
19 Auvergne 30 632 23 127
20 Franche-Comté 27 016 23 782
21 Régions d'outre-mer (2002) 22 891 13 375
22 Limousin 16 326 22 664
23 Corsica 5 846 21 508

Source : INSEE.

Departements economy and cities

Some Departements in France are very rich compared to others. Paris, Hauts-de-Seine (GDP per capita : €67 000 in 2000) and Rhône, for example, concentrate a lot of company headquarters. The Yvelines is the second richest département in France according to the income of inhabitants. In Hauts-de-Seine the wages are on average €28 000 per capita, in Yvelines €27 900, and in Paris €25 000 against €15 000 in France (data 2004 INSEE).

Finally, in France like in other countries, a lot of cities are extremely rich in much of Regions, so the richest is Marnes-la-Coquette in Hauts-de-Seine with €81 750 per household (according to INSEE, data 2004)

A quarterly report prepared by the Economist Intelligence Unit on behalf of Barclays Wealth in 2007 estimated that there were 3,000,000 dollar millionaires in France. (page 7)

Notes and references

See also

External links


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