France

Kaylee Beckas

Overall Score: 62.5 World Rank: 73

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French/United States facts

  • Population:
    • 63.7 million/316.4 million
  • GDP (PPP):
    • $2.3 trillion/$16.8 trillion
    • 0.3% growth/1.9% growth
    • 0.2% 5-year compound annual growth/1.2% 5-year compound annual growth
    • $35,784 per capita/$53,101 per capita
  • Unemployment:
    • 10.5%/7.5%
  • Inflation (CPI):
    • 1.0%/1.5%
  • FDI Inflow:
    • $4.9 billion/$187.5 billion

Legal System

France has an independent judiciary, and the rule of law is firmly established. In 2014, however, former President Nicolas Sarkozy was detained for questioning about long-running accusations of corruption. Property rights and contract enforcement are secure, but complex and inefficient regulations help to make property in France among the most expensive in the world, despite weak demand and slowing construction activity.

Competitive Markets

France’s economic freedom score is 62.5, making its economy the 73rd freest in the 2015 Index. Its overall score has decreased by 1.0 point, with particularly large declines in labor freedom and the management of government spending. France is ranked 33rd out of 43 countries in the Europe region, and its overall score is higher than the world average but below the regional average.

Limits on Government Regulation

With no minimum capital requirement for launching a firm, business start-up is straightforward. Completing licensing requirements takes over three months on average. The rigid labor market lacks the capacity to generate more vibrant employment growth. Price controls affect many products and services, and state subsidies to increase renewable energy capacity threaten the competitiveness of the French power industry.

An Efficient Capital Market

EU members have a 1.0 percent average tariff rate. France protects its film industry from competition and imposes quotas on the broadcast of foreign television shows and music. The government screens foreign investment in some sectors. The competitive financial sector, dominated by banks, stable, and open to competition, offers a wide range of services. Foreign financial firms have gained considerable market share.

Monetary Stability

The French economy is diversified and modern. The entrepreneurial environment is generally facilitated by a sophisticated and relatively resilient financial sector. The government has pursued reform measures to increase the economy’s competitiveness and flexibility, but progress has been slow and patchy.

Low Tax Rates

France’s top individual income tax rate is 45 percent, and its top corporate tax rate is 34.3 percent. Other taxes include a value-added tax and a tax on inheritance. Overall tax revenue equals about 45.3 percent of domestic income, and government spending equals 57.0 percent of gross domestic product. Public debt is close to 94 percent of annual domestic output.

Free Trade

EU members have a 1.0 percent average tariff rate. France protects its film industry from competition and imposes quotas on the broadcast of foreign television shows and music. The government screens foreign investment in some sectors. The competitive financial sector, dominated by banks, stable, and open to competition, offers a wide range of services. Foreign financial firms have gained considerable market share.
Germany and France: An economic comparison | Made in Germany
This video compares many economic factors between two European countries: France and Germany. These factors include things like average pay, unemployment rate, and retirement age. This video also highlights several of France's economic errors. One is the off balanced import to export ratio. They import much more than they send out and this is not productive. Germany exports more than it imports and they are thriving much more.