France’s economy combines extensive private enterprise (nearly 2.5 million companies registered) with substantial (though declining) government intervention (see dirigisme). The government retains considerable influence over key segments of infrastructure sectors, with majority ownership of railway, electricity, aircraft, and telecommunications firms. It has been gradually relaxing its control over these sectors since the early 1990s. The government is slowly selling off holdings in France Télécom, Air France, as well as the insurance, banking, and defence industries.
A member of the G8 group of leading industrialized countries, it is ranked as the fifth or sixth largest economy by nominal GDP depending on source. France joined 11 other EU members to launch the Euro on January 1, 1999, with euro coins and banknotes completely replacing the French franc in early 2002.
According to the OECD, in 2004 France was the world’s fifth-largest exporter and the fourth-largest importer of manufactured goods. In 2003, France was the 2nd-largest recipient of foreign direct investment among OECD countries at $47 billion in the same year, French companies invested $57.3 billion outside of France, ranking France as the second most important outward direct investor in the OECD, behind the United States ($173.8 billion) , and ahead of the United Kingdom ($55.3 billion) , Japan ($28.8 billion) and Germany ($2.6 billion).
In the 2005 edition of OECD in Figures, the OECD also noted that France leads the G7 countries in terms of productivity (measured as GDP per hour worked). In 2004, the GDP per hour worked in France was $47.7, ranking France above the United States ($46.3), Germany ($42.1), the United Kingdom ($39.6), or Japan ($32.5).
La Défense, Paris is the heart of the French economy. Despite figures showing a higher productivity per hour worked than in the US, France’s GDP per capita is significantly lower than the US GDP per capita, being in fact comparable to the GDP per capita of the other European countries, which is on average 30% below the US level. The reason for this is that a much smaller percentage of the French population is working compared to the US, which lowers the GDP per capita of France, despite its higher productivity. In fact, France has one of the lowest percentages of its population aged 15-64 years at work among the OECD countries. In 2004, 68.8% of the French population aged 15-64 years was in employment, compared to 80.0% in Japan, 78.9% in the UK, 77.2% in the US, and 71.0% in Germany. This phenomenon is the result of almost thirty years of massive unemployment in France, which has led to three consequences reducing the size of the working population: about 9% of the active population is without a job; students delay as long as possible their entry into labour market; and finally, the French government gives various incentives to workers to retire in their early 50s, though these are now receding.
With 79.1 million foreign tourists in 2006, France is ranked as the first tourist destination in the world, ahead of Spain (55.6 million in 2005) and the United States (49.4 million in 2005). This figure 79.1 million 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 has an important aerospace industry led by the European consortium Airbus, and is the only European power (excluding Russia) to have its own national spaceport (Centre Spatial Guyanais). France is also the most energy independent Western country due to heavy investment in nuclear power. Large tracts of fertile land, the application of modern technology, and EU subsidies have combined to make. France is the leading agricultural producer and exporter in Europe. Wheat, poultry, dairy, beef, and pork, as well as an internationally recognized foodstuff and wine industry are primary French agricultural exports. EU agriculture subsidies to France total almost $14 billion.
The first completed Airbus A380 at the "A380 Reveal" event in Toulouse on 18 January 2005. Airbus is a symbol of the globalization of the French and European economy.
| Air France - source |
Since the end of the Second World War the government made efforts to integrate more and more with Germany, both economically and politically. Today the two countries form what is often referred to as the "core" countries in favour of greater integration of the European Union.