France: country overview08 June 2012
by Ina Dimireva -- last modified 12 February 2013
France was transitioning from an economy that has featured extensive government ownership and intervention to one that relies more on market mechanisms but is in the midst of a euro-zone crisis
Year of EU entry: Founding member (1952)
Member of Schengen area: Yes
Political system: Republic
Capital city: Paris
Total area: 550 000 km²
Population: 64.3 million
Listen to the official EU language: French
France is the largest country in the EU, stretching from the North Sea to the Mediterranean. The landscape is diverse, with mountains in the east and south, including the Alpine peak of Mont Blanc (4 810 m) which is western Europe's highest point. Lowland France consists of four river basins, the Seine in the north, the Loire and the Garonne flowing westwards and the Rhône, which flows from Lake Geneva to the Mediterranean Sea.
The president of the Republic has an important political role. He chairs the meetings of the Council of Ministers (cabinet), and retains overall responsibility in key areas of foreign affairs and defence. The day-to-day running of the country is in the hands of the prime minister. The president is elected by direct popular vote for a period of five years. The parliament consists of a National Assembly, directly elected every five years, and a Senate whose members are chosen by an electoral college.
France has an advanced industrial economy and an efficient farm sector. Main activities include automobile manufacture, aerospace, information technology, electronics, chemicals and pharmaceuticals and fashion.
France has produced some of the continent's most influential writers and thinkers from Descartes and Pascal in the 17th century, to Rousseau and Voltaire in the 18th, Balzac, Baudelaire and Flaubert in the 19th and Sartre and Camus in the 20th. In the last two centuries it has given the art world the works of Renoir, Monet, Cezanne, Gauguin, Matisse and Braque, to name but a few.
French cuisine is one of the finest in Europe; cooking and eating are part of French culture and lifestyle.
The French economy is diversified across all sectors. The government has partially or fully privatized many large companies, including Air France, France Telecom, Renault, and Thales. However, the government maintains a strong presence in some sectors, particularly power, public transport, and defense industries. With at least 79 million foreign tourists per year, France is the most visited country in the world and maintains the third largest income in the world from tourism. France's leaders remain committed to a capitalism in which they maintain social equity by means of laws, tax policies, and social spending that reduce income disparity and the impact of free markets on public health and welfare. France's real GDP contracted 2.6% in 2009, but recovered somewhat in 2010 and 2011, before stagnating in 2012. The unemployment rate increased from 7.4% in 2008 and has remained above 9% per year since then. Lower-than-expected growth and increased unemployment have strained France's public finances. The budget deficit rose sharply from 3.4% of GDP in 2008 to 7.5% of GDP in 2009 before improving to 4.5% of GDP in 2012, while France's public debt rose from 68% of GDP to 89% over the same period. Under President SARKOZY, Paris implemented some austerity measures to bring the budget deficit under the 3% euro-zone ceiling by 2013 and to highlight France's commitment to fiscal discipline at a time of intense financial market scrutiny of euro-zone debt. Socialist Party candidate Francois HOLLANDE won the May 2012 presidential election, after advocating pro-growth economic policies, the separation of banks' traditional deposit taking and lending activities from more speculative businesses, increasing the top corporate and personal tax rates, and hiring an additional 60,000 teachers during his five-year term. France ratified the EU fiscal stability treaty in October 2012 and HOLLANDE's government has maintained France's commitment to meeting the budget deficit target of 3% of GDP during 2013 even amid signs that economic growth will be lower than the government's forecast of 0.8%. Despite stagnant growth and fiscal challenges, France's borrowing costs declined during the second half of 2012 to euro-era lows.
Source: Europa, CIA World Factbook