G-20 nation profile: France
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WHO IS THE LEADER FROM FRANCE ATTENDING THE G-20 SUMMIT IN PITTSBURGH?
President Nicolas Sarkozy will lead the delegation from France, which includes Christine Lagarde, the French finance minister. Mr. Sarkozy may be best known for his well-publicized romance and then marriage to the Italian-born French former model and singer Carla Bruni. But, in economic and political circles, the "hyper-president" has worn many hats: critic of illegal immigration, champion of stronger regulation of global finance, supporter of French industry (his government has poured bailout money into the French industrial giant Alstom); Mr. Sarkozy has also pressed French automakers to put jobs, not profits, first). Ms. Lagarde, meanwhile, is one of the most successful and powerful women on the global financial stage.
WHAT ARE THE CURRENT ECONOMIC CONDITIONS IN FRANCE?
The French economy grew by 0.3 percent in the second quarter even though it had been expected to shrink in April, May and June. The rise in France was due in part to "buoyant consumer consumption and strong exports," Ms. Lagarde's office said in a statement. The national statistics office, INSEE, said exports grew by 1.0 percent and household consumption by 0.4 percent, while imports shrunk by 2.3 percent. Ms. Lagarde has said she is optimistic that the country is "stabilizing" after months of recession and that she expects some recovery from the crisis by the middle of 2010.
WHAT IS THE GENERAL MAKE-UP OF THE FRENCH ECONOMY?
With a GDP of $2.8 trillion, France is the world's fifth-largest economy, according to the International Monetary Fund. In recent decades the country has transitioned from heavy government regulation and state ownership of key industries to a more privately focused economy. It hasn't been easy: Widespread opposition to labor reform has slowed the government's ability to revitalize the economy. Services make up nearly 80 percent of GDP, with manufacturing and agriculture providing the rest of economic activity. Some 15 percent of France's high-value exports go to Germany, with about 6 percent heading to the United States.
WHAT IS MR. SARKOZY HOPING TO GET OUT OF THE G-20 SUMMIT?
Look for Mr. Sarkozy to take the lead in pushing for tougher banking regulations to curb big banker payouts. Ms. Lagarde, who has called for reining in a system that rewards excessive risk-taking and the kind of behavior that led to the financial crisis in the first place, will attempt to convince other finance ministers to follow France's lead. Mr. Sarkozy caused a stir at the London G-20 summit in April when he threatened to walk out of those meetings if concrete commitments on ways to mitigate the crisis by better regulating the industry weren't reached.
WHAT ELSE SHOULD WE KNOW ABOUT FRANCE'S CURRENT POLITICAL AND ECONOMIC SITUATION?
As of July 1, the government reduced the value added tax on restaurant items from 19.6 to 5.5 percent in a move that was meant to encourage people to eat out more. The hope was that restaurants would pass on the savings to their customers by lowering prices; the lower cost of menu items would draw more business which would allow more restaurants to invest in hiring more staff, thereby stimulating one of the country's biggest employment sectors. Another measure meant to boost the sluggish economy was the government's decision to allow shops in special tourist zones to stay open on Sundays. The proposed measure has caused some consternation among those who want Sundays to remain a day of rest. On the other side of the debate are those who share Mr. Sarkozy's vision of 21st-century France as a place where one can "work more to earn more," to borrow from his presidential campaign slogan.
First Published September 7, 2009 12:00 am
