A Political and Economic Dictionary of Western Europe, First Edition
France is a large state in the centre of Western Europe and includes four overseas territories known as départements d’outre-mer (DOM): Guyane (French Guiana) in South America; Guadeloupe and Martinique in the Caribbean Sea; and Reunion in the Indian Ocean. It was first constituted as a republic in 1792. During the Second World War most of France was occupied by Nazi German military forces. A southern sector was governed by the Vichy regime in 1940–44. After liberation the Fourth Republic was founded in 1946. This was an unstable political system characterized by a large number of polarized political parties and a high turnover of governments, beset, from 1954, by the growing cost of war in Algeria. In 1958, at the height of the Algerian crisis, Gen. Charles de Gaulle agreed to serve as Prime Minister of the Fourth Republic (and, later, as President of the Fifth Republic) if a new constitution was drafted to strengthen the role of the President. De Gaulle’s aim for the Fifth Republic was to unite the nation by transcending the traditional divisions between left and right, offering strong national leadership through the office of President, and pursuing an independent role for France in international affairs; France is, for example, a political but not a military member of the North Atlantic Treaty Organization. These principles formed the core of Gaullism.
Area: 552,000sq km; capital: Paris; population: 59m. (2001).
The state form of the Fifth Republic (1958) is unique in Western Europe, and has been referred to as French exceptionalism. The Fifth Republic is a semi-presidential political system in which executive power normally lies with the President rather than with the Prime Minister. The President has—since 1962—been directly elected for a seven-year term; though it was decided in a referendum in 2000 that the term of the French presidency would be reduced to five years from 2002. Although the President has executive power, he is, as a rule, obliged to appoint the Prime Minister and his cabinet from the ranks of the largest party in the Assemblée Nationale. Legislative power is shared between the weak institutions of the Assemblée Nationale and the Sénat. France is traditionally a centralized state with power overwhelmingly concentrated in Paris. It is also characterized by a weak civil society.
Since 1945 French politics have been shaped by the German question. France had fought three wars with its neighbour since 1870. The country’s response to this was to develop co-operative alliances with Germany and a strong Franco-German partnership which has shaped western European politics. As well as signing the Elysée Treaty of Friendship with Germany in 1963, France was a founder member of the European Coal and Steel Community and together with Germany has been at the forefront of the project to further European integration. Mainstream French parties and the French population are largely in favour of European integration. In September 1992 President François Mitterrand held a constitutionally unnecessary referendum to endorse the Treaty on European Union which resulted in a slim majority in favour (yes 51.05%).
In parallel to support for European integration there has been a concern to maintain the political features of French exceptionalism by seeking to transfer them to the European level. In contrast, the process of Europeanization has significantly altered the contours of France’s centralized state and dirigiste political economy, and the state has been stripped of many of its functions as these have been passed up to European institutions. The centralized nature of the French state has also been altered by a domestic process of decentralization which since 1982 has passed power down to France’s 22 regional councils and 96 departments. Most recently a constitutional reform of March 2003 consecrated the principle of decentralization.
The institution of the presidency remains strong though its power has been trimmed by three periods of cohabitation—power-sharing with a Prime Minister from an opposition party. During cohabitation domestic policy is determined by the head of government and the President leads foreign policy, though he does not have complete autonomy. In addition, the power and willingness of the Conseil Constitutionnel to intervene in the policy-making and legislative process has increased since 1971.
The institutional design of the Fifth Republic, which sought to represent and unite the French nation, is weakening. This is reflected in declining popular support for institutions of the Fifth Republic. There is a high rate of abstentions and spoiling of ballot papers in elections; turn-out in the first rounds of the 2002 presidential and legislative elections was only 69.18% and 64.41% respectively. At the same time, there has been a rise in social movements highlighting issues such as unemployment, racism and HIV/AIDS which use protests, direct action or the media as a means of promoting their cause. In the 1990s and early 2000s France also experienced a wave of strikes among public-sector workers who opposed austerity measures undertaken to meet the convergence criteria for participation in Economic and Monetary Union and reforms of state pension schemes. Furthermore, the issues of immigration and the assimilation of France’s immigrant population have deeply divided the nation. Immigration and issues of law and order are now—after the economy—the second most important electoral issue.
The Gaullists, who sought to unify the French nation, and other non-Gaullist right-wing parties dominated politics in the early years of the Fifth Republic. The Gaullists and their allies in government regularly won more than 50% of the vote in the first round of elections during the first two decades of the Fifth Republic. Between 1958 and 1981 the right also provided all Presidents (Charles de Gaulle 1959–69, Georges Pompidou 1969–74, Valéry Giscard d’Estaing 1974–81) and governments. During the 1970s the left re-established itself: the Socialist Party (PS) was founded in 1969 and co-operated with the Communist Party of France (PCF) to win the presidency and a majority in the Assemblée Nationale in 1981.
In 1981 the socialist François Mitterrand was elected as President, a post which he held following re-election in 1988 until 1995. The neo-Gaullist Jacques Chirac was elected as President in 1995 and was re-elected in 2002. The same period has been characterized by alternation of majorities in the Assemblée Nationale—and thus governments—between the right- and left-wing political families. Until 1986 the French electorate elected a party alliance into the Assemblée Nationale that supported the President’s political stance. Since 1981 no party of the left or right has managed to secure two consecutive terms in office, meaning that until 2002 neither Mitterrand nor Chirac had been able to complete a seven-year term with a parliamentary majority in his favour. Since 1981 governments of the left have been in office in 1981–86, 1988–93 and 1997–2002 while the right has governed in 1986–88, 1993–97 and since 2002.
In 1995–97 the right dominated French politics, holding the presidency, four-fifths of the Assemblée Nationale, two-thirds of the Sénat, 20 of 22 regional councils, 80% of department councils, and one-half of the large French towns. However, the right’s popularity fell at national level on account of unmet electoral promises and budget cuts and, in 1997, Chirac took the unprecedented (and risky) decision of calling early parliamentary elections. The right lost control of the Assemblée Nationale and a ‘pluralist’ left-wing government made up of the PS, the PCF, the Greens and the Mouvement des Citoyens entered into office. At the same time, the right experienced a crisis and reorganized. The non-Gaullist alliance, the Union pour la Démocratie Française (UDF), split in 1998 following regional elections in which some of its constituent parties (Démocratie Libérale) entered into electoral pacts with the extreme right-wing National Front (FN) in order to prevent the left from coming to power. The neo-liberal Démocratie Libérale left the UDF, and the Alliance pour la France was founded in 1998 in an attempt to bring together both camps of the right. The RPR and Démocratie Libérale came together but the reconstituted UDF remained outside.
The wavering fortunes of the divided moderate right, periods of right-left cohabitation, and concern about unemployment and corruption have coincided with the steady rise of Jean-Marie Le Pen’s extreme right-wing FN. Since the 1980s the FN has experienced increasing electoral success at European, national, regional and municipal levels. It has also succeeded in shaping the political agendas of both the mainstream right and the left in France, especially on issues of immigration and law and order. The presence of the FN in French politics reached its peak during the presidential elections held in April 2002. In the first round of voting Jean-Marie Le Pen won 16.86% of the vote and came second to Jacques Chirac who polled 18.88% (the poorest ever first-round performance by an incumbent president). A second FN politician, Bruno Mégret, won a further 2.34%. The socialist candidate, incumbent Prime Minister Lionel Jospin, achieved third place with 16.18% of the vote, and was thus eliminated from the second round. In the next round of balloting, Chirac rallied support from the moderate right and left and gained 82.21% of the vote (the highest ever percentage in a second round) against Le Pen’s 17.79%. In the parliamentary elections held in May 2002 Chirac’s newly formed moderate right-wing Union pour une Majorité Presidentielle (now the Popular Movement) won a majority in the Assemblée Nationale so that he was no longer required to cohabit with the left. The FN won 11.12% of the vote in the first round of the parliamentary elections but no seats in the first or second ballot. Since 2002 the Gaullist right has again held the presidency and dominated the Assemblée Nationale, as was intended for the Fifth Republic.
Economy: France’s economy is large and based predominantly on manufacturing. Characterized traditionally by a lack of capital and savings necessary for industrial investment, France’s relatively late industrialization was led and financed by the state. As a consequence, a unique model of state-led or dirigiste capitalism developed. In the post-war period the state drew up five-year economic plans and nationalized industry and financial institutions. It also controlled finance, investment and monetary policy through the Treasury (Trésor) and the Ministry of Finance. The state selected strong firms and promoted these as national champions which should contribute to the development of ‘grand projets’ such as the TGV high-speed train, the Airbus and Concorde. Economic planning and management was conducted by an élite set of civil servants educated at the Ecole nationale d’administration or the Ecole polytechnique. In the state-led model of capitalism social partners played a minor role in economic policy-making, but they have demonstrated their influence through strikes and direct action protests.
GNP: US $1,380,700m. (2001); GNP per caput: $22,730 (2001); GNP at PPP: $1,425,000m. (2001); GNP per caput at PPP: $24,080 (2001); GDP: $1,309,807m. (2001); exports: $371,795m. (2001); imports: $351,033m. (2001); currency: euro; unemployment: 8.9% (2002).
France’s state-led model of capitalism underwrote 30 years of growth in the post-war era—the so-called Trente Glorieuse—during which time the economy expanded at an annual rate of some 5.2%. In parallel to this economic success, France constructed a generous corporatist welfare state based on the principle of occupational solidarity. The welfare state was organized around the insurance principle: employees and employers contributed to distinct occupational social security schemes which until 1995 were managed by social partners, and have since been managed by the state. Social benefits in cases of unemployment, sickness and old age offered generous replacement rates which were calculated according to the claimant’s previous income. An exception to the corporatist principle was the family allowance scheme which pays—more typically of social democratic welfare states—universal benefits to all families with two or more children. France has, in contrast to other corporatist states such as Germany, a relatively high female participation rate in the labour market.
The economic success of the Trente Glorieuse has also been attributed to France’s inclusion from the start in the project of European integration. A founder member of the European Coal and Steel Community, the French economy benefited from peaceful and co-operative relations with its larger neighbour, and former enemy, Germany. In the early years France was able to influence the project of European integration to its advantage, especially in the agricultural sector. From the mid-1980s onwards, the process of Europeanization started to shape the contours of the dirigiste French political economy. France was particularly affected in the 1980s by the project to complete the Single European Market (SEM) by 1992 and the effort in the 1990s to achieve Economic and Monetary Union (EMU). These projects altered state-market relations, macroeconomic performance and the welfare state.
From 1973 economic growth in France began to stall, averaging about half the annual rate achieved during the Trente Glorieuse, and unemployment began to rise. When the first socialist government of the Fifth Republic was elected in 1981, President François Mitterrand embarked on a Keynesian strategy to boost the economy: French firms, banks and insurance institutions were nationalized; public investment and wages were increased. In response to soaring inflation government policy changed direction two years later and from 1983 onwards a policy of sound money was pursued instead, the franc being linked to the Deutsche Mark (DM). It sought to tackle unemployment by reducing the working week to 39 hours and introducing early-retirement schemes. To address the problems of social exclusion, unemployment among the young and the long-term unemployed, who are often uninsured, in 1988 the government introduced a minimum income scheme, the Revenu Minimum d’Insertion. This marked the start of a gradual shift from insurance- to tax-based welfare.
Since the mid-1980s the French economy has undergone two waves of privatization. In 1986–88 the right-wing government pursued the policy of selling state-owned firms out of ideological conviction and the need to meet the criteria for the SEM project. In 1993–97 the right-wing government embarked on a second wave of privatization and this was continued by the ‘pluralist’ left-wing administration in 1997–2002. This second wave was less ideologically-driven and conducted more out of concern to reduce the budget deficit in order to meet the convergence criteria for participation in EMU by 1999 and then to try to adhere to the rules of the stability and growth pact.
In the early 1990s the French economy was severely affected by its policy of the franc fort which linked the national currency to the DM. This policy was important in the sense that it demonstrated France’s commitment to the project of European integration and helped to keep the country’s inflation rate in check. However, when the German Bundesbank adjusted its policy in response to German unification, France’s interest rates soared, economic growth stalled and there were further increases in unemployment and public debt. Between 1990–95 the rate of unemployment rose from 9% to 12.5% of the workforce and public debt increased from less than 2% to 6% of gross domestic product (GDP). By 1995 the state spent 55% of GDR
In the early 1990s France committed itself to participate in EMU as laid down in the Treaty on European Union. To qualify for participation, France was required to meet the convergence criteria; most significantly, it had to cut its budget deficit from 6% to 3% of GDP by 1999. The right-wing government of 1993–97 pledged to increase employment and to repair France’s ‘social fracture’, but later changed course and sought to introduce tax increases and social security cuts. The government’s plans to harmonize benefit entitlements between separate occupational schemes led to a massive wave of strikes in 1995–96, and it was eventually forced to back down. The pluralist left-wing government of 1997–2002 attempted to tackle unemployment by introducing the 35-hour working week and also introduced a public jobs scheme for the young unemployed.
France successfully met the convergence criteria and has participated in the final stage of EMU since 1999. However, it has (with Germany) struggled to adhere to the rules of the stability and growth pact. Its public debt levels have risen again to more than 3% of GDP and it has been threatened with sanctions and fines by the European Commission. Since 2002 the right-wing government has made a concerted effort to reform public spending and implement unpopular measures such as reform of pension entitlements for public-sector workers. No party in France is in favour of harsh welfare retrenchment.
The French state-led economy has been transformed in the last two decades by the processes of Europeanization and has become more open and present in the international economy. There is some evidence that it is transforming into both a German-style Rhineland economy and a liberal market economy like that of the United Kingdom. At the same time, in this process, the state has managed to retain influence in a wide range of areas: it directed the distribution of shares during the process of privatization, keeping control through core ownership (noyaux durs) and arranging a complex network of cross-holdings; and graduates of the élite civil servant schools (Enarques) dominate the management in the new privately-owned firms. Also, the state took over the management of social insurance funds in 1995 and remains the employer of some 2m. civil servants.
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