ECONOMY

Economy
France has the fourth-largest economy in the world, after the USA, Japan and Germany, and has an annual per capita income of US$23,000. It has a wide industrial and commercial base, covering everything from agriculture to light and heavy industrial concerns, the most advanced technology and a burgeoning service sector. France is also Western Europe’s leading agricultural nation with over half of the country’s land area devoted to farming. Wheat is the most important crop; maize, sugar beet and barley are also produced in large quantities. The country is self-sufficient in these (which are produced in sufficient surplus for major exports) and the majority of other common crops. The livestock industry is also expanding rapidly. France is famously one of the world’s leading wine producers. Despite the widespread belief in some quarters (not least the UK) that French agriculture is inefficient, the sector has regularly turned in good profit margins and a sound export performance. French companies are prominent in many industries, particularly steel, motor vehicles, aircraft, mechanical and electrical engineering, textiles, chemicals and food processing. In advanced industrial sectors, France has one of the world’s largest nuclear power industries, which meets nearly three-quarters of the country’s energy requirements (coal mining, once important, is in terminal decline), and is a world leader in computing and telecommunications. The service sector is dominated by tourism, which has long been a major foreign currency earner, although financial services have grown rapidly since the early 1990s.
Recent economic policy has been characterized by a gradual relinquishing of state holdings in ‘strategic’ industries and a steady reduction in government spending. Economic growth has been sluggish for the last two-and-a-half years, and is still below 1 per cent. France also suffers from a relatively high unemployment rate of 10 per cent, which is climbing again after several years of decline. France was a founder member of the European Community and has benefited greatly from its participation. It was also a founder member of the European Monetary Union and adopted the euro upon its inception. The EU – especially Germany, Belgium, Italy, Spain and the UK – accounts for the bulk of French trade. Outside the EU, the USA and Japan are its principal trading partners.