Economy

The Economy
By its gross domestic product (GDP), France is the world’s sixth economic power. Its assets are varied: transport, telecommunications, agribusiness industries, medicinal products, but also banking insurance, tourism, not forgetting the traditional luxury items (leather work, ready-made clothes, perfumes, alcohol…).

Two generations of TGV,
in Gare de Lyon (Paris)

France, whose trade deficit rose to 25.8 billion Euros in 2006, is the fifth exporter of goods in the world (mainly capital equipment) in the world, the fourth with regard in the services sector and the third in the agriculture (particularly cereals and food processing). France remains the first producer and European agricultural exporter.

In addition, France carries out 66 % of its trades with its European Union partners (50 % with the euro zone).

France is located at the second world rank of the host country of the foreign direct investments. Indeed, the investors assess the quality of French labour, the high level of research, the control of the leading-edge technologies, and a good control of the production costs.

Gross domestic product - GDP (2006): 1, 744.2 billion Euros

GDP Growth rate (2006): 2 %

Inflation (2006): 1.6 %

Trade deficit (2006): 25.8 billion Euros

Sugar cane cultivation
(Island of the Meeting)

Farms: 545.000

Agricultural active population: 1 100.000

Agricultural surface used: 27,470,000 hectares, is 50.3 % of the metropolitan territory

Main French productions

> Cereals: 48.5 million tons, including 34.8 million tons of common wheat and 13.7 million tons of corn in grain, first producer of the EU, fifth world producer.

> Wine: 53.2 million hectolitres, second world and EU producer, after Italy.

> Milk: 22.6 billion liters, second rank of the EU after Germany and fifth world rank.

> Beet sugar: 26,1 million tons, first rank of the EU and first world rank.

> oleaginous Seeds: 5.7 million tons, first rank of the EU.

Animal population

> Bovine: 18.3 million heads

> Porcine: 14.4 million heads

> Ovine: 7.9 million heads

> Caprine: 1.2 million heads

Meat Production

> Bovine: 1.8 million (Ton-Equivalent-Carcass)

> Porcine: 2.3 million

> Ovine-caprine: 1.4 million

> Poultries: 1.9 million

Forests

The wooded lands occupy approximately 15 million hectares, i.e 29 % of the national territory.
Ranked second in the term of the surface within the EU, the French main forest have increased by 46 % since 1945 and increases each year by approximately 74.000 hectares. It mainly consists of leafy trees (2/3),with coniferous trees representing the remaining third.

The National office of forests (ONF) is responsible for the management of the national forests (1 750,000 hectares) as well as wood and forests belonging to the communities (2, 700,000 hectares).

The remaining 10,600.000 hectares belong to some 3,500,000 private owners. Biological and landscape richness, place of walk and relaxation, the French forest allows also an annual harvest of 53 million cubic meters of wood. Its thus plays a major role in rural development by supplying out of raw material several branches of activity which provide many employment.

Lastly, it contributes to the fight against climate change by storing atmospheric carbon. The additional annual storage of the French forest is evaluated to be10 million tons of carbon.

Energy

Rate of energy independence: 49,8 %
Consumption of primary energy: 275.3 million tons of oil equivalent (Mtoe).
Main companies of the sector: TOTAL, EDF, GDF

Distribution of energy consumption

33.4 % Oil

42.7 % Primary electricity

14.7 % Gas

4.5 % Coal

4.8 % Thermal renewable energies

Gross output of electricity: 575 billion kWh, including 78.6 % of nuclear origin.

Energy bill in 2006: 46 billion Euros.

Industry

The most important French industrial sectors are:

Construction industry

Annual turnover: 137 billion Euros.
Among the first European builders, are 3 French groups: Vinci, first world group of concessions, construction and associated services; Bouygues; Eiffage.
Manpower: 1,597.000 people

Agribusiness industries

Annual turnover: 139,7 billion Euros.
Manpower: 390.000 people.
Main sectors: meat, milk, grain, foodstuffs, drinks and alcohol industries. First exporter and second producer of the EU.
Trade surplus: 6.3 billion Euros.
Many companies of over 20 paid workers and more: 3180.
Independent groups: Group Danone, Nestlé France, Lactalis, Pernod-Ricard, Altadis and Bongrain.

Chemical industries

Annual turnover: 96.6 billion Euros.
Manpower: 231,400 people.
Main companies of the sector: Liquid air, Rhodia, Hutchinson.
Fashion and luxury industries

Annual turnover: 35 billion Euros.

This sector brings together the haute couture, the jewellery, the jewellery, the luxury leather works of perfumery, the cosmetics, crystal manufacture.

Independent groups of the sector:
LVMH, Chanel, Hermes international.
Manpower: 150.000 people.

Drug company

Annual turnover: 40,6 billion Euros.
Manpower: 100.000 people.
First producer of the European Union and third world exporter.
Main companies:
Sanofi-Aventis, Pierre Fabre, Servier.

Car industry Annual turnover: 109 billion Euros.

France is the fourth world exporter of private cars.
In 2005, the trade balance in the sector showed a surplus of 8.6 billion Euros.
PSA (Peugeot-Citroen) and Renault are the two independent groups of automobile industry. The production in 2005 rose to 5,955.600 vehicles.
Manpower: 320,000 people.

Processing of the materials (steel, aluminium, glass, plastics, rubber)

Annual turnover: 65,1 billion Euros.
Main companies: the group Arcelor-Mittal (processing of steel), Saint-Gobain, first producer of glass and second world exporter. Plastic Omnium and Diagrid Al are the two French leaders in the processing of plastics and Michelin the first world producer of tires.

Communication and information telecommunications and technologies

Annual turnover: 45 billion Euros.
Telephone market: 38.2 million lines.

France Telecom account for 48,2 % of the market, Cegetel-SFR 34,2 % and Bouygues Telecom 17.6 %.

Mobile telephony is making important great strides with 52 million subscribers (March 2007).

In the sector of telecommunications, Alcatel-Lucent is the fourth manufacturer of telecommunication equipment, it occupies the first place in the sector of transmission systems and he is world leader in underwater cable networks.

Digital television is represented by Thomson Multimédia, manufacturer of digital television decoders.

In 2006, the e-business represented 9 billion Euros of turnover.

Aircraft and space industry

Turnover 2006: 32.1 billion Euros.
Manpower: 132,000 people.
Main companies:
EADS (Airbus, Eurocopter, Astrium, MBDA,…), Dassault Aviation, Snecma, Arianespace.

Establishment of poles of competitiveness

In an increasingly competitive worldwide economy, France launched in 2004 a new industrial policy which mobilizes the key factors of competitiveness, in the first rank of which feature innovation capacity.

A pole of competitiveness brings together, within the same territory, companies, training centres and research units, engaged in joint projects with an innovative character, and the size necessary to ensure international visibility.

One distinguishes from the poles to dominant technological where the R & D are preeminent, and of the poles to dominant industrial more structured by the density of productive fabric and the network of marketing.

The poles of competitiveness mark the birth of a new tool of industrial policy to reinforce the competitiveness of French industry.

67 poles of competitiveness had been retained on July 12, 2005 by the Inter-ministerial committee on the installation and development of the territory (CIADT). After the reception of new candidatures and the merger of already labellized poles, the poles of competitiveness have been 71 since July 5, 2007.

More: http://www.competitivite.gouv.fr/

Research and development

In 2006, the national expenditure on research and development rose to 37.99 billion Euros, i.e 2.26 % of the GDP.

It is financed to the tune of 52.5 % by the public sector which carries out the operation (in particular maintenance of buildings, payment of staff salaries and pension of laboratories equipment to the major national research centres (CNRS - all disciplines, INSERM - medicine, INRA - agronomy…).

Research financed by companies (47.5 %) focuses on branches with technological density such as aeronautical and space engineering, pharmacy, automobile engineering, communication equipment and the precision instruments.

France is ranked fourth rank in the OECD countries in the field of research, after Japan, the United States and Germany.

Transport

Highway network

Densest and longest in the world and in the European Union with 1,079,072 km (communal roads, departmental roads, trunk roads and motorways), including 10,492 km of motorways (second in European ranking).

Thus in 2006 road accounted for 82 % of goods transport as total , combined transport highly increased.

Railway network

31.000 km of railways (January 1, 2006). France holds the speed record (574.8 km/h) with the TGV (light speed train), which moves on a special network of 1,876 km authorizing a speed equal or higher than 270 km/h.

Annual traffic in 2006: 329 million travellers on the main network, 83 million on network TGV, 572 million on the Ile-de-France network and 121 million tons of freight transported.

Air transport

Nearly 160 million passengers a year and 4.8 billion km freight a year. 904 aircraft (planes and helicopters) fly under the French space.

Airports of Paris:

In 2006,764, 000 travels by commercial aircraft, 82.8 million passengers and 2.1 million tons of freight and station (first in European ranking).

Merchant fleet

212 ships, carrying roughly 4.7 million barrels transport annually 340 million tons of goods. The French fleet is ranked twenty-eighth in the terms of world rank tonnage.
Marseilles, a leading French and Mediterranean port, is placed at the fourth in European ranking with a goods traffic established to be at 95.5 million tons.

Tertiary sector

Financial and banking sector

The Paris Stock Exchange, renamed Euronext Paris, is the official shares market in France. Since the year 2000, Euronext has been replaced, following the amalgamating, the Paris Stock market with those of Amsterdam and Brussels.

In 2002, this new European stock market repurchased the British market of derivative products LIFFE (London International Financial Futures and Exchange options) and supports the Lisbon Stock Market.

2007 saw the merger of the European stock market with the New York Stock Market. With a market of 21.500 billion Euros, NYSE Euronext is the world’s first stock market.

The main French banks are:

BNP Paribas, Agricultural credit, Societe Generale and LCL.

Insurance companies

The French insurance sector is placed fifth in world ranking with a turnover of 198.4 billion Euros.

Axa, second European insurance company, CNP and AGF are the three main French insurance companies. Personal insurance (life and health) continued its development (+ 16,1 %). Third party insurances (goods and responsibility) is growing by 2,2 %. The insurance sector employs some 200.000 people.

Tourism

With 76 million foreign tourists in 2006, France is the most visited country in the world.

In this regards, France has:

18,284 hotels,
8,138 campsites,
914 vacation villages,
177 youth hotels,
69,700 rural and communal accommodation,
34.848 rooms .

France comes third in world ranking, in the tourist trade after the United States and Spain with an amount of 66 billion Euros.

The trade surplus in this sector rose by more than 8,9 billion Euros.

Foreign trade

France is ranked second in the world ranking, in the for the export of services and agricultural produce, and fourth world rank in goods (mainly equipment).

The trade deficit in 2006 rose to 25.8 billion Euros. French exports reached an amount of 481.2 billion Euros. As for the imports, they rose to 507.0 billion Euros.

Germany, Italy, the United Kingdom, Belgium, Luxembourg, Spain and the United States are the main clients of France.
The single currency
The euro is the legal tender used by more than 300 million people who live in the 13 Member States of the European Union. The symbol of the euro is €.
On January 1, 2002, the euro became the single currency of 300 million Europeans spread over 12 countries of the European Union (the euro zone). It is the result of a long process of reflexion, and preparation of the nation’s economies and then of transition to the euro.

1969: at the “The Hague Summit”, the six Member States of the European Economic community (the EEC) set as their objective the economic and monetary Union (Plane Bars).

1971: the Werner plan proposed a convergence of the European nation’s economies in order to equip the EEC with a single currency. The instability of the European currencies affected the project heavily.

1972: Control of the fluctuations in the European currencies was founded with the establishment of the European Currency (SNAKE), then in 1979 with the European Monetary System (EMS).

1986: the Single act registers in the Treaty of Rome the objective of gradual establishment of an economic and monetary Union (UEM).

1990: first stage of the Union with the free flow of capital.

1992: the Treaty of Maastricht defines the criteria of convergence between the economies of the participating countries, preliminary stage to the single currency.

May 2, 1998: the European Council adopts the list of present countries: Germany, Austria, Belgium, Spain, Finland, France, Ireland, Italy, Luxembourg, Netherlands and Portugal. Greece came in 2001.

June 1, 1998: establishment of the European Central bank (ECB), pursuant to the European monetary policy.

January 1, 1999: the euro becomes the single currency. The convertion rate is fixed irrevocably between the euro and the national currencies (1 Euros = 6,55957 FF). Transactions on the capital markets of are done in Euros.

January 1, 2002: coming into effect of the euro in the 12 participating countries.

February 17, 2002: the franc disappears.

January 1, 2007: Slovenia joins the euro zone.

what is the use of the single currency? The European economy forms a major single European market. European Union Member carry out the bulk of their trade inside Europe.

The single currency helps to overcome problems of exchange, and contributes to European construction by equipping Europe with an international currency by facilitating trade and investments, the Euro zone States were also seeking to generate more employment in Europe.

The coins. In order to symbolize the union and the diversity of Europe, the coins comprise a face common to the thirteen countries of the euro area (recognizable with the 12 stars symbolic systems), and a national face.

In France, 3 symbols decorate the national face of the coins: Marianne (appearing the Republic and freedom), the tree (symbol of life) and the Sower (allegory of fruitfulness). Whatever their national face, the coins can circulate in the entire euro zone.

The euro is also used in Monaco, San Marino and the Vatican (which have their own parts in euro), in Andorra, in Kosovo and Montenegro, in Western Balkans, like in the Azores, in the Canaries, in the Guadeloupe, in French Guyana, in Madeira, in Martinique, in Mayotte, the Meeting and with Saint-Pierre-and Miquelon, all of which belong from Convention country using the euro.

Tickets. The tickets in Euros are the same as in all countries. Three elements are printed there: gates and windows with the recto, and bridges with the back. These elements use as a starting point seven architectural styles having marked the European culture: the traditional one, the novel, Gothic, rebirth, baroque and rococo, the architecture of iron and glass, and finally modern architecture.

The official rate of conversion to the franc: 1 = 6.55957 FF

Dernière modification : 15/07/2011

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