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. About 90% of the people are Roman Catholic, 7% Muslim, less than 2% Protestant, and about 1% Jewish. More than 1 million Muslims immigrated in the 1960s and early 1970s from North Africa, especially Algeria. In mid-2002, there were between 4 and 6 million persons of Arab descent living in France.

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, such as the post-graduate Grandes Ecoles.

The French language derives from the vernacular Latin spoken by the Romans in Gaul, although it includes many Celtic and Germanic words. French has been an international language for centuries and is a common second language throughout the world. It is one of five official languages at the United Nations. In Africa, Asia, the Pacific, and the West Indies, French has been a unifying factor, particularly in those countries where it serves as the only common language among a variety of indigenous languages and dialects.

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 occupied in June 1940. The German victory left the French groping for a new policy and new leadership suited to the circumstances. On July 10, 1940, the Vichy government was established. Its senior leaders acquiesced in the plunder of French resources, as well as the sending of French forced labor to Germany; in doing so, they claimed they hoped to preserve at least some small amount of French sovereignty.

The German occupation proved quite costly, however, as 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. A bitter legacy carries over to the present day.

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 in the divisive Algerian issue. A threatened coup led the Parliament to call on General de Gaulle to head the government and prevent civil war. He became prime minister in June 1958 (at the beginning of the Fifth Republic) and was elected president in December of that year.

Seven years later, in an occasion marking the first time in the 20th century that 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 Fran�ois 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 Fran�ois Mitterrand (1981-95), and neo-Gaullist Jacques Chirac (first elected in spring 1995 and reelected in 2002.

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. During President Mitterrand's tenure, he 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. President Jacques Chirac assumed office May 17, 1995, after a campaign focused on the need to combat France's stubbornly high unemployment rate.

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. In late 1995, France experienced its worst labor unrest in at least a decade, as employees protested government cutbacks. On the foreign and security policy front, Chirac took a more assertive approach to protecting French peacekeepers in the former Yugoslavia and helped promote the peace accords negotiated in Dayton and signed in Paris in December 1995. The French have been one of the strongest supporters of NATO and EU policy in Kosovo and the Balkans. In the aftermath of the September 11 attacks in the U.S., France played a central role in the war on terrorism. French forces, including the Charles de Gaulle carrier battle group, participated in Operation Enduring Freedom. French troops also took part in the International Security Assistance Force (ISAF) for Afghanistan. See Political Conditions for most recent election.

With a GDP of $1.3 trillion, France is the fourth-largest Western industrialized 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 (72% in 1997) and is responsible for nearly all job creation in recent years. GDP growth was 1.8% in 2001, after 3 years at 3% or above.

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 Government of France successfully reduced an unemployment rate of 12% to 9%, recently. France joined 10 other European Union countries in adopting the euro as its currency in January 1999. 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. Henceforth, monetary policy will be set by the European Central Bank in Frankfurt.

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% of GDP in 2001, is among the highest in the G-7. Regulation of labor and product markets is pervasive. The government continues to own shares in corporations in a range of sectors, including banking, energy production and distribution, automobiles, transportation, and telecommunications.

Legislation passed in 1998 shortened the legal work week from 39 to 35 hours for most employees effective January 1, 2000. A key objective of the legislation was to encourage job creation, for which significant new subsidies were made available. It is difficult to assess the impact of work week reduction on growth and jobs since many of the key economic parameters, such as the impact on labor costs and a company's ability to reorganize work schedules, depend on the outcome of labor-management negotiations that are ongoing.

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. Nuclear waste is stored on site at reprocessing facilities.

Membership in France's labor unions accounts for less than 10% 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).

Trade
France is the second-largest trading nation in western Europe (after Germany). After experiencing a modest deficit in its foreign trade balance in 2000, France enjoyed a $3.54 billion surplus in 2001. Total trade for 2001 amounted to $695.44 billion, or nearly 50% of GDP. Trade with EU countries accounts for 60% of French trade.

In 2000, U.S.-France trade in goods and services totaled almost $75 billion. 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.

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

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 expanding its forestry and fishery industries. The implementation of the Common Agricultural Policy (CAP) and the Uruguay Round of the GATT Agreement resulted in reforms in the agricultural sector of the economy. Continued revision of the CAP and potential reforms under a still to-be-negotiated Doha round of WTO may further change French agriculture.

France is the world's second-largest agricultural producer, after the United States. However, the destination of 70% of its exports is other EU member states. 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 countries. U.S. agricultural exports to France, totaling some $600 million annually, consist primarily of soybeans and products, feeds and fodders, seafood, and consumer oriented products, especially snack foods and nuts. French agricultural exports to the United States are mainly cheese, processed products, and wine. They amount to more than $900 million annually.