Country Risk Analysis

(France)

Submitted to:
Mr. Sanjay Gupta

Prepared By:

Swati agarwal (4811)

Amit Singh (4853)
 Table of contents

S. no Topic

1 Introduction-Economy of France

2 GDP growth rate

3 Sectors in the economy

4 Currency

5 External trade

6 Sociology

7 Geography

8 Political system

9 Demographics

10 Companies

11 Banking in France

12 Country risk analysis

Economic risk
Political risk
Financial system risk

13 Business with France

14 Indo French economic and trade relations

ECONOMY OF FRANCE

France is the world's fifth largest and wealthiest economy. It is the second largest economy in Europe in nominal
terms. France's economy entered the 2008-2009 recessions later and left it earlier than most comparable economies,
only enduring four quarters of contraction. As of September 2010, France's economy has been growing continuously
since the second quarter 2009.

France's economy combines extensive private enterprise (nearly

2.5 million companies registered) with substantial (though declining)
government intervention. The government retains considerable
influence over key segments of infrastructure sectors, with majority
ownership of railway, electricity, aircraft, and telecommunication
firms. It has been gradually relaxing its control over these sectors
since the early 1990s. The government is slowly selling off holdings
in France Telecom, Air France, as well as the insurance, banking, and defense industries.
A member of the G8 group of leading industrialized countries, it ranked as the sixth largest economy in the world in
2005, behind the United States, Japan, Germany, The People's Republic of China and the United Kingdom. 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, ranking behind Luxembourg (where foreign direct investment was essentially monetary
transfers to banks located in that country) but above the United States ($39.9 billion), the United Kingdom ($14.6
billion), Germany ($12.9 billion), or Japan ($6.3 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).[23] 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.[25] 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.
As many economists have stressed repeatedly over the years, the main issue with the French economy is not an
issue of productivity. In their opinion, it is an issue of structural reforms, in order to increase the size of the working

population in the overall population. Liberal and Keynesian economists have different answers to that issue. Lower
working hours and the reluctance to reform the labour market are mentioned as weak spots of the French economy in
the view of the right and lack of government policies fostering social justice by the left. Recent government attempts
at adjusting the youth labour market, to combat unemployment, have met with fierce resistance.
With over 75 million foreign tourists in 2003, France is ranked as the first tourist destination in the world, ahead of
Spain (52.5 million) and the United States (40.4 million). It features cities of high cultural interest (Paris being the
foremost), beaches and seaside resorts, ski resorts, and rural regions that many enjoy for their beauty and tranquillity
(green tourism). Aside of casual tourism France attracts a lot of religious pilgrims to Lourdes, a town the Hautes-
Pyrénées département that hosts a few million tourists a year.

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, which also makes France the smallest
producer of carbon dioxide among the seven most industrialised countries in the world. As a result of large
investment in nuclear technology, nearly nine tenths of the energy needs of the country are met by nuclear power
plants (86.9% in 2005).
Large tracts of fertile land, the application of modern technology, and EU subsidies have combined to make France
the leading agricultural producer and exporter in Europe. Wheat, poultry, dairy, beef, and pork, as well as an
internationally recognised foodstuff and wine industry are primary French agricultural exports. EU agriculture
subsidies to France total almost $14 billion.
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.
France GDP Growth Rate

The Gross Domestic Product (GDP) in France expanded at an annual rate of 0.70 percent in the last
reported quarter. From 1978 until 2010, France's average quarterly GDP Growth was 0.49 percent
reaching an historical high of 1.60 percent in June of 1978 and a record low of -1.60 percent in
December of 2008. France is the second largest economy and second trading nation in Europe. France,
as with many modern industrialized nations, has a large and diverse industrial base. Economic growth
rates in France have been steady for decades due to conservative planning of the economy which in
comparison to other western European countries is more centralized by the government in France.
SECTORS OF ECONOMY

Industry

Leading industrial sectors in France are telecommunications (including communication satellites), aerospace and

defense, ship building (naval and specialist ships), pharmaceuticals, construction and civil engineering, chemicals,
and automobile production (3.5m units in 2005).

Research and development spending is also high in France at 2.26% of GDP, the fourth highest in the OECD.

Energy

France is the world-leading country in nuclear energy, home of global energy giants Areva ,EDF and GDF

Suez: nuclear power now accounts for about 78% of the country's electricityproduction, up from only 8% in 1973,
24% in 1980, and 75% in 1990. Nuclear waste is stored on site at reprocessing facilities. Due to its heavy
investment in nuclear power. France is the smallest emitter of carbon dioxide among the seven most industrialized
countries in the world

In 2006 of electricity in France amounted to 548.8 TWh, of which

 428.7 TWh (78.1%) were produced by nuclear power generation

 60.9 TWh (11.1%) were produced by hydroelectric power generation

 52.4 TWh (9.5%) were produced by fossil fuel power generation

 21.6 TWh (3.9%) by coal power

 20.9 TWh (1.1%) by natural gas power

 9.9 TWh (1.8%) by other fossil fuel generation (fuel oil and gases by-products of industry such
as blast furnace gases)

 6.9 TWh (1.3%) were produced by other types of power generation (essentially waste-to-energy and wind
turbines))

 The electricity produced by wind turbines increased from 0.596 TWh in 2004, to 0.963 TWh in
2005, and 2.15 TWh in 2006, but this still accounts only for 0.4% of the total production of electricity (as of
2006).

Inflation rate 2003 -1.80%, 2004 -2.10%, 2005- 2.30%, 2006- 1.70%, 2007- 1.50%, 2008- 1.50%, 2009-2.80%.

In November 2004, EDF (which stands for Electricité de France), the world's largest utility company and France's
largest electricity provider, was floated with huge success on the French stock market. Notwistanding, the French
State still keep 70% of the capital.

Other electricity providers include CNR (Compagnie nationale du Rhône) and Endesa (through SNET).
Agriculture

France is the world's second largest agricultural exporter, world's sixth-largest agricultural producer and European

Union's leading agricultural one, accounting for about one-third of all agricultural land within the EU.

Northern France is characterized by large wheat farms. Dairy products, pork, poultry, and apple production are
concentrated in the western region. Beef production is located in central France, while the production of fruits,
vegetables, and wine ranges from central to southern France. France is a large producer of many agricultural
products and is currently expanding its forestry and fishery industries. The implementation of the Common
Agricultural Policy (CAP) and the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) have
resulted in reforms in the agricultural sector of the economy.

The United States, although the second-largest exporter to France, faces stiff competition from domestic production,
other EU member states, and third world countries. U.S. agricultural exports to France, totaling some $600 million
annually, consist primarily of soybeans and products, feeds and fodders, seafood, and consumer oriented products,
especially snack foods and nuts.

Tourism

France is, by far, the world's first tourist destination with more than 81.9 million foreign tourists in 2007,[14], way ahead

of Spain (58.5 million in 2006) and the United States (51.1 million in 2006). This 81.9 million figure 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 features cities of high cultural interest (Paris being the foremost), beaches and seaside resorts, ski resorts,
and rural regions that many enjoy for their beauty and tranquility (green tourism). France also attracts many religious
pilgrims to Lourdes, a town in the Hautes-Pyrénées department that hosts a few million visitors a year.

Popular tourist sites include: (according to a 2003 ranking visitors per year): Eiffel Tower (6.2 million), Louvre
Museum (5.7 million), Palace of Versailles (2.8 million), Musée d'Orsay (2.1 million), Arc de Triomphe (1.2
million), Centre Pompidou (1.2 million), Mont-Saint-Michel (1 million), Château de Chambord (711,000), Sainte-
Chapelle (683,000), Château du Haut-Kœnigsbourg (549,000), Puy de Dôme (500,000), Musée
Picasso (441,000), Carcassonne(362,000).

Weapons industry

France is the fourth largest weapons supplier in the world. The French arms industry's main customer, for whom they

mainly build warships, guns, nuclear weapons and equipment, is the French Government. Furthermore, record high
defense expenditure (currently at €35 billion), which was considerably increased under the government of Prime
Minister Jean-Pierre Raffarin, have contributed to the success of the French arms industries. In addition, external
demand plays a big part in the growth of this sector: for example, France exports great quantities of weaponry to the
United Arab Emirates, Brazil, Greece, India, Pakistan, Taiwan, Singapore and many others.
CURRENCY

The currency of France is Euro. Euro, the official currency of the European Union is the single currency for more than
300 people in Europe. The currency sign of Euro is the symbol.

The banking code is EUR. Euro was introduced in the world financial markets as a non-cash monetary unit in 1999.
The currency and coins appeared in participating countries in 2002. The currency originated in the Maastricht Treaty
(1991). This treaty was an agreement among 12 member countries of the European Community.
The Euro is managed and administered by the Frankfurt-based European Central Bank (ECB) and the European
System of Central Banks (ESBC).
Apart from France, it is the sole currency of the European Union member states namely Austria, Belgium, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. These twelve countries
are collectively referred to as the Eurozone.
Euro is also a legal currency in the Eurozone overseas territories of French Guiana, Reunion, Guadeloupe,
Martinique, Mayotte and Saint-Pierre et Miquelon.

The Euro exchange rate (EURUSD) depreciated 5.24 percent during the last 12 months. From 1975 until 2010 the
EURUSD exchange averaged 1.18 reaching an historical high of 1.60 in April of 2008 and a record low of 0.64 in
February of 1985. The Euro spot exchange rate specifies how much one currency, the EUR, is currently worth in
terms of the other, the USD. While the Euro spot exchange rate is quoted and exchanged in the same day, the Euro
forward rate is quoted today but for delivery and payment on a specific future date.

EXTERNAL TRADE

France is the second-largest trading nation in Europe (after Germany). Its foreign trade balance for goods had been
in surplus from 1992 until 2001, reaching $25.4 billion (25.4 G$) in 1998; however, the French balance of trade was
hit by the economic downturn, and went into the red in 2000, reaching US$15bn in deficit in 2003. Total trade for
1998 amounted to $730 billion, or 50% of GDP—imports plus exports of goods and services. Trade with European
Union countries accounts for 60% of French trade.

In 1998, U.S.-France trade totaled about $47 billion—goods only. According to French trade data, U.S. exports
accounted for 8.7%--about $25 billion—of France's total imports. U.S. industrial chemicals, aircraft and engines,
electronic components, telecommunications, computer software, computers and peripherals, analytical and scientific
instrumentation, medical instruments and supplies, broadcasting equipment, and programming and franchising are
particularly attractive to French importers.

The principal French exports to the United States are aircraft and engines, beverages, electrical equipment,
chemicals, cosmetics, luxury products and perfume. France is the ninth-largest trading partner of the U.S.
SOCIOLOGY

LANGUAGE

There are a number of languages of France. French is the sole officiallanguage and is by far the most widely

spoken, but several regionallanguages are also spoken to varying degrees. Owing to immigration, a number of non-
indigenous tongues are now also spoken in parts of the country. The map to the right displays the historical areas in
which regional languages have been spoken. Some of these languages have also been spoken in neighboring
countries; this is true in the case of Walloon (wallon), a majority of whose speakers reside in Belgium

CULTURE

The culture of France and of the Frenchpeople has been shaped by geography, by profound historicalevents, and

by foreign and internal forces and groups. France, and in particular Paris, has played an important role as a center
of highculture and of arts since the seventeenth century, first in Europe, and from the nineteenth century on,
worldwide. From the late nineteenth century, France has also played an important role
in modernart, cinema, fashion and cuisine. The importance of French culture has waned and waxed over the
centuries, depending on its economic, political and military importance. French culture today is marked both by great
regional and socioeconomic differences and by strong unifying tendencies.

Whether in France, Europe or in general, consists of beliefs and values learned through the socialization process as
well as material artifacts. Culture guides the social interactions between members of society and influences the
personal beliefs and values that shape a person's perception of their environment: "Culture is the learned set of
beliefs, values, norms and material goods shared by group members. Culture consists of everything we learn in
groups during the life course-from infancy to old age."

The conception of "French" culture however poses certain difficulties and presupposes a series of assumptions about
what precisely the expression "French" means. Whereas Americanculture posits the notion of the "melting-pot"
and culturaldiversity, the expression "French culture" tends to refer implicitly to a specific geographical entity (as, say,
"metropolitanFrance", generally excluding its overseasdepartments) or to a specific historico-sociological group
defined by ethnicity, language, religion and geography. The realities of "Frenchness" however, are extremely
complicated. Even before the late nineteenth century, "metropolitan France" was largely a patchwork of local customs
and regional differences that the unifying aims of the AncientRégime and the FrenchRevolution had only begun to
work against, and today's France remains a nation of numerous indigenous and foreign languages, of multiple
ethnicities and religions, and of regional diversity that includes French citizens
in Corsica, Guadeloupe, Martinique and elsewhere around the globe.

The creation of some sort of typical or shared French culture or "culturalidentity", despite this vast heterogeneity, is
the result of powerful internal forces — such as the French educational system, mandatory military service, state
linguistic and cultural policies — and by profound historic events — such as the Franco-Prussianwar and the
two WorldWars — which have forged a sense of national identity over the last 200 years. However, despite these
unifying forces, France today still remains marked by social class and by important regional differences in culture
(cuisine, dialect/accent, local traditions) that many fear will be unable to withstand contemporary social forces
(depopulation of the countryside, immigration, centralization, market forces and the world economy).

In recent years, to fight the loss of regional diversity, many in France have promoted forms of multiculturalism and
encouraged cultural enclaves (communautarisme), including reforms on the preservation of regional languages and

the decentralization of certain government functions, but French multiculturalism has had a harder time of accepting,
or of integrating into the collective identity, the large non-Christian and immigrant communities and groups that have
come to France since the 1960s.

The last fifty years has also seen French cultural identity "threatened" by global market forces and by American
"cultural hegemony". Since its dealings with the 1993 GATT free tradenegotiations, France has fought for what it calls
the exception culturelle, meaning the right to subsidize or treat favorably domestic cultural production and to limit or

control foreign cultural products (as seen in public funding for Frenchcinema or the lower VAT accorded to books).
The notion of an explicit exception franchise however has angered many of France's critics

The French are often perceived as taking a great pride in national identity and the positive achievements of France
(the expression "chauvinism" is of French origin) and cultural issues are more integrated in the body of the politics
than elsewhere (see "The Role of the State", below). The FrenchRevolution claimed universalism for the democratic
principles of the Republic.CharlesdeGaulle actively promoted a notion of French "grandeur" ("greatness"). Perceived
declines in cultural status are a matter of national concern and have generated national debates, both from the left
(as seen in the anti-globalism of JoséBové) and from the right and far right (as in the discourses of the NationalFront).

According to Hofstede'sFrameworkforAssessingCulture, the culture of France is moderately individualistic and high

Power Distance Index.

Now, the interracial blending of some native French and newcomers stands as a vibrant and boasted feature of
French culture, from popular music to movies and literature. Therefore, alongside mixing of populations, exists also a
cultural blending (le métissageculturel) that is present in France. It may be compared to the traditional US conception

of the melting-pot. The French culture might have been already blended in from other races and ethnicities, in cases
of some biographical research on the possibility of African ancestry on a small number of famous French citizens.
[5]
Author AlexandreDumas, père possessed one-fourth black Haitian descent, and EmpressJosephine Napoleon who
was born and raised in the FrenchWestIndies from a plantation estate family. We can mention as well, the most
famous French singer EdithPiaf whose grandmother was a North African from Kabylie

For a long time, the only objection to such outcomes predictably came from the far-right schools of thought. In the
past few years, other unexpected voices are however beginning to question what they interpret, as
the newphilosopher AlainFinkielkraut coined the term, as an "ideology of miscegenation" (uneidéologie du métissage)
that may come from what one other philosopher, PascalBruckner, defined as the "sob of the White man" (le sanglot
de l'hommeblanc). These critics have been dismissed by the mainstream and their propagators have been labelled as
new reactionaries (les nouveaux réactionnaires)], even if racist and anti-immigration sentiment has recently been

documented to be increasing in France at least according to one poll[8] . Such critics, including NicolasSarkozy, the
current PresidentofFrance, take example on the United States' conception of multiculturalism to claim that France has
consistently denied the existence of ethnic groups within their borders and has refused to grant them specific rights.

GEOGRAPHY

France is a country located primarily in Western Europe, but containing territory in South America, the Caribbean,

and east of Africa, as well as numerous territories of various status. In Europe France borders the Atlantic Ocean,
the North Sea and the Mediterranean. To the west is the Bay of Biscay, to the north is the English Channel.Total
2
area: 674,843 km (Whole territory of the French Republic, including all the overseas departments and territories, but
2
excluding the disputed French territory of Terre Adélie in Antarctica)Metropolitan France: 551,695 km ,(Metropolitan -
i.e. European - France only, French National Geographic Institute data),Metropolitan
2
France: 543,965 km ,(Metropolitan - i.e. European - France only, French Land Register data, which exclude lakes,
2
ponds, glaciers larger than 1 km , and estuaries)terrain-Mostly flat plains or gently rolling hills in north and west
Elevation extremes: Lowest point: Rhone River delta -2 m,Highest point: Mont Blanc 4,808 m

Land use, Arable land: 33%Permanent crops: 2%,Permanent pastures: 20%,Forests and woodland: 27%,Other:

18% (1993 est.)

POLITICAL SYSTEM

The government of the French Republic is a semi-presidential system determined by the French Constitution of

the fifth Republic. The nation declares itself to be an "indivisible, secular, democratic, and social Republic". The
constitution provides for a separation of powersand proclaims France's "attachment to the Rights of Man and the
principles of national sovereignty as defined by the Declaration of 1789."

The national government of France is divided into an executive, a legislative and a judicial branch.
The President shares executive power with his appointee, the Prime Minister. The cabinet globally, including the
Prime Minister, can be revoked by the National Assembly, the lower house of Parliament, through a "censure
motion"; this ensures that the Prime Minister is always supported by a majority of the houses.

Parliament comprises the National Assembly and the Senate. It passes statutes and votes on the budget; it controls
the action of the executive through formal questioning on the floor of the houses of Parliament and by establishing
commissions of enquiry. The constitutionality of the statutes is checked by the Constitutional Council, members of
which are appointed by the President of the Republic, the President of the National Assembly, and the President of
the Senate. Former Presidents of the Republic also are members of the Council.

The independent judiciary is based on a civil law system which evolved from the Napoleonic codes. It is divided into
the judicial branch (dealing with civil lawand criminal law) and the administrative branch (dealing with appeals against
executive decisions), each with their own independent supreme court of appeal: the Court of Cassation for the judicial
courts and the Conseild'Etat for the administrative courts. The French government includes various bodies that check
abuses of power and independent agencies.

France is a unitary state. However, the administrative subdivisions—the régions, départements and communes—

have various legal functions, and the national government is prohibited from intruding into their normal operations.

France was a founding member of the European Coal and Steel Community, later the European Union. As such,
France has transferred part of itssovereignty to European institutions, as provided by its constitution. The French
government therefore has to abide by European treaties, directives andregulations.

Government

The government is headed by the President.[6] It has at its disposal the civil service, the government agencies, and
the armed forces.[7] (The term "cabinet" is rarely used to describe thegouvernement, even in translation, as it is used

in French to mean a minister's private office, composed of politically-appointed aides. In French, the
word gouvernement can refer to government in general, but generally refers to the group of ministers.)

[7] [8]
The government is responsible to Parliament, and the National Assembly may pass a motion of censure, forcing
the resignation of the cabinet. This, in practice, forces the government to be from the same political party or coalition
as the majority in the Assembly. Ministers have to answer questions from members of Parliament, both written and
oral; this is known as the questions au gouvernement (questions to the government).[9] In addition, ministers attend

meetings of the houses of Parliament when laws pertaining to their areas of responsibility are being discussed.

Government ministers cannot pass legislation without parliamentary approval, though the Prime Minister may issue
autonomous regulations or subordinated regulations (décretsd'application) provided they do not infringe on the

Parliament domain, as detailed in the constitution. Ministers, however, can propose legislation to Parliament; since
the Assembly is usually politically allied to the ministers, such legislation is, in general, very likely to pass. However,
this is not guaranteed, and, on occasion, the opinion of the majority parliamentarians may differ significantly from
those of the executive, which often results in a large number of amendments.

The Prime Minister can engage the responsibility of his government on a law, under article 49-3 of the Constitution.
The law is then considered adopted unless the National Assembly votes a motion of censure, in which case the law is
refused and the government has to resign. As of 2006, the last time this article was invoked was for the "First
[10]
Employment Contract" proposed by Prime Minister Dominique de Villepin, a move that greatly backfired

DEMOGRAPHICS

As of January 1, 2010, 65,447,374 people live in the French Republic. 62,793,432 of these live in metropolitan
France, whereas 2,653,942 live in the French overseas departments and territories.

At the beginning of the 20th century, France's population was low compared to its neighbours, and due to its past
history. However, the country's population sharply increased with the baby boom following World War II. During
the TrenteGlorieuses (1945–1974), the country's reconstruction and steady economic growth led to the labor-

immigration of the 1960s, when many employers found manpower in villages located in Southern Europe and in
the Maghreb (or North Africa). French law facilitated the immigration of thousands of colons, ethnic or national French

from former colonies of North and West Africa, India and Indochina, to mainland France. 1.6 million
European piedsnoirsmigrated from Algeria, Tunisia and Morocco. In the 1970s, over 30,000 French colons left

Cambodia during the Khmer Rouge regime as thePol Pot government confiscated their farms and land properties.
However, after the 1973 energy crisis, laws limiting immigration were passed. In addition, the country's birth rate
dropped significantly during this time.

Since the 1980s, France has continued being a country of mass immigration. Meanwhile, the national birth rate, after
continuing to drop for a time, began to rebound in the 1990s and currently the country's fertility rate is close to
the replacement level. In recent years, immigrants have accounted for one quarter of the population growth - a lower
proportion than in most other European countries. According to an INSEE 2006 study, "The natural increase is close
to 300,000 persons, a level that has not been reached in more than thirty years. Net migration is estimated at 93,600
persons, slightly more than in 2005
Population

total: 63,713,926

note: 876,136 in metropolitan

Age structure

0-14 years: 18.6% (male 6,063,181/female 5,850,272)

15-64 years: 65.2% (male 20,798,889/female 20,763,283)

65 years and over: 16.2% (male 4,274,290/female 6,750,011) (2007 est.)

Religions

According to a poll conducted in 2001 for French Catholic magazine La Croix, numbers are: Roman Catholic 69%

(only 10% being listed as regular churchgoers), Agnostic or Atheist22%, Protestant (Calvinist, Lutheran, Anglican and
Evangelical) 2%, others are 7%.According to CIA World Factbook the numbers are : Roman Catholic 83%-88%,
Protestant 2%, Jewish 1%, Muslim 5%-10%, unaffiliated 4%
COMPANIES

Forbes Largest 2000 public companies of the world are ranked on the basis of various parameters like score for the
sales and profits, assets and the market value and some normalcy conditions. Here the companies are shown
country wise along with itsindustry types which are as follows:

Name of the company Industry Type

Total Oil & gas operations
BNP Paribas Banking
AXA Group Insurance
SociétéGénérale Group Banking
CréditAgricole Banking
France Telecom Telecommunications services
Sanofi-aventis Drugs & biotechnology
Electricité de France Utilities
Suez Group Utilities
Renault Group Consumer durables
Carrefour Food markets
Gaz de France Utilities
Vivendi Universal Media
Saint-Gobain Construction
Peugeot Groupe Consumer durables
L'Oréal Group Household & personal products
CNP Assurances Insurance
Bouygues Construction
Lafarge Construction
Vinci Group Construction
PPR Retailing
Danone Food, drink & tobacco
Alcatel Technology hardware & equipment
Christian Dior Household & personal products
Schneider Electric Capital goods
Areva Group Materials
Air Liquide Group Chemicals
CIC Group Banking
NatexisBanques Banking
Michelin Group Consumer durables
Lagardère SCA Media
Veolia Environnement Utilities
Air France-KLM Group Transportation
Accor Hotels, restaurants & leisure
Thales Aerospace & defense
Alstom Capital goods
ASF Group Transportation
PernodRicard Food, drink & tobacco
PublicisGroupe Media
Sodexho Alliance Hotels, restaurants & leisure
Dassault Aviation Aerospace & defense
Unibail Diversified financials
Eiffage Construction
 Finatis Trading companies
Thomson Consumer durables
Capgemini Group Software & services
Technip Oil & gas operations
Valeo Consumer durables
WendelInvestissement Diversified financials
Gecina Diversified financials
Safran Technology hardware & equipment
Atos Origin Business services & supplies
Imerys Construction
Essilor International Health care equipment & services
Vallourec Materials
Rhodia Chemicals
Hermès International Household & personal products
Scor Insurance
Financière de l'Odet Transportation
Euler Hermes Insurance
Eramet Materials
Bull Technology hardware & equipment
DassaultSystèmes Software & services
Eurazeo Diversified financials
Nexans Capital goods
FFP Diversified financials

Banking in France

There are eight main banks in France, as follows:

1. Crédit Agricole (CA)
2. BNP Paribas
3. Société Générale
4. Caisse d‘Epargne (CE)
5. Banque Populaire (BP)
6. Crédit Mutuel
7. La Banque Postale
8. LCL
Since 2003 LCL (formerly Crédit Lyonnais) has been owned by Crédit Agricole, although it continues to
operate a separate branch network.
Likewise, in 2009 Caisse d’Epargne and the Banque Populaire merged their activities (now called 'Groupe
BPCE'), although they are continuing to operate their retail branch networks as separate entities.
Credit Mutual has a national subsiduary bank called CIC (Crédit Industriel et Commercial) that operates
a separate branch network.
International buyers may also be familiar with Crédit Foncier the specialist mortgage arm of Caisse
d'Epargne. Crédit Foncier has a branch office in London.
BNP Paribas are also owners of Abbey France, a former subsiduary of Abbey National, now subsumed
under their mortgage subsiduary BNP Paribas International Buyers.
The largest bank by number of customers and branch network is the French post office, who call their
bank 'La Banque Postale'.
Not only is its branch network larger than all the others put together, but it has generally offered the
cheapest rates. Until January 2009 it also had exclusive rights (along with Caisse d’Epargne) to a popular
and attractive savings scheme called Livret A. La Poste is also open on a Saturday morning, which is not
always the case with the other banks.

On the downside, the amount you can withdraw from La Poste without prior notice is generally lower
than other banks, their international money transfer system lags behind other banks, and transfers
within the EU are more expensive than other banks. The level of customer service within some of the
older and busier post offices can also be poor.

Crédit Agricole will be more widely known by most readers. It operates on a mutual basis with 41
regional banks in which CA is the major shareholder.
Whilst these regional banks are ultimately part of the same group, Crédit Agricole is not a national
branch network in the same manner as the other banks.
Country Risk Analysis

Country Risk Tier

• The Country Risk Tier (CRT) reflects assessment of three categories of risk: Economic, Political and
Financial System Risk.

• France is a CRT-1 country with low levels of risk across all three categories. The French economy has
been significantly impacted by the global financial crisis and is currently experiencing a severe recession
with the economy expected to contract by 3% in 2009 and be nearly flat in 2010. The unemployment
rate has been rising since mid- 2008 and a modest recovery is not expected until late 2010.

Regional Summary: Western Europe

• Western Europe is a highly developed and affluent region. The European Union (EU) is an economic
and political union of 27 countries that accounts for 30% of world gross domestic product (GDP). The EU
is facilitating a single European market with standardized regulatory systems and free movement of
people, goods, services and capital.

• The euro-zone is made up of the 16 EU members that have adopted the euro as their currency.

• Most, if not all, of Western Europe is experiencing a severe economic slowdown and many countries
are, or soon will be, in an official recession. While the European Central Bank has cut interest rates to
spur demand, economic growth in the region has stagnated.

France

Economic Risk: Very Low

• France is a wealthy, modern economy. The economy is large (6th largest in the world in terms of gross
domestic product) and diversified.

• Government intervention and bureaucratic rigidities have been structural inefficiencies in the French

economy although some reform has taken place recently.

• The economic outlook for France does not look positive. Economic growth has turned negative and
stimulative fiscal policy will likely lead to the government deficit exceeding European Union limits.

Vital Statistics 2008(Source: IMF, Swiss Re and A.M. Best)

Nominal GDP USD bn 2865.74, Population mil 62.3, GDP Per Capita USD 46,016, Real GDP Growth % 0.7

Inflation Rate % 3.2, Premiums Written (Life) USD mil 181,146, Premiums Written (Non-Life) USD mil
91,861, Premiums Growth (07-08) % 0.1
Political Risk: Low

• France is a member of the European Union and one of the original 11 countries to adopt the euro as
its currency in 1999.

• The French government is attempting to reduce its holdings of large enterprises and limit its
intervention in the economy, thereby promoting a more market based economy.

• The lack of labor flexibility in France is one obstacle that must be overcome to improve economic
efficiency.

Financial System Risk: Very Low

• Established in 2003, l’Autorité de Contrôle des Assurances et des Mutuelles (ACAM), the French
insurance and mutual control authority, regulates all insurance, reinsurance and mutual companies in
France. The ACAM was established through the merger of the Commission de Contrôle des Assurances

(CCA) and the Commission de Contrôle des Mutuelles et des Institutions de Prévoyance (CCMIP).
Business with France

France Government Bond 10 Year Yield

France's Government Bond Yield for 10 Year Notes rallied 62 basis points during the last 12 months.
From 1990 until 2010 France's Government Bond Yield for 10 Year Notes averaged 5.55 percent
reaching an historical high of 10.73 percent in September of 1990 and a record low of 2.64 percent in
September of 2010. Generally, a government bond is issued by a national government and is
denominated in the country`s own currency. Bonds issued by national governments in foreign currencies
are normally referred to as sovereign bonds. The yield required by investors to loan funds to
governments reflects inflation expectations and the likelihood that the debt will be repaid.

France Government Budget

France had a government budget deficit in 2007 equivalent to 2.29 percent of the Gross Domestic
Product (GDP). Government Budget is an itemized accounting of the payments received by government
(taxes and other fees) and the payments made by government (purchases and transfer payments).
France Balance of Trade

France reported a balance of trade deficit equivalent to 5500.0 Millions Euros EUR in May of 2010.
France is the third-largest trading nation in Western Europe. The main exports are: machinery and
transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel,
beverages, wheat, beef, pork, poultry, dairy products and wine. French principal imports are: machinery
and equipment, vehicles, crude oil, plastics and chemicals. The Trade with European Union countries
accounts for 65% of French trade.
Indo-French Economic and Commercial Relations

The economic and commercial linkages are an important component of India’s bilateral relations with
France. Both Indian and French companies are increasingly looking at each other for doing business and
making investments.

Bilateral Trade

France is ranked 5th in the list of India’s trading partners among EU countries (after the UK, Belgium,
Germany and Italy). Indo-French bilateral trade has been growing over the years. However, the Indo-
French trade has declined by 21.34% in 2009 (from € 6.78 billion in 2008 to € 5.36 billion in 2009) mainly
due to the economic crisis. However, in the first eight months of 2010, the bilateral trade increased by
27.46%.

Indo-French trade in the last 10 years (figures in million Euros) is as follows:

During President Sarkozy’s visit to India in January 2008, it was decided to double the two-way trade by
2012 i.e. to increase from the then € 6.14 billion to € 12 billion. This was reiterated during PM Dr.
Manmohan Singh’s visit to France in September, 2008

Indian exports to France comprise a range of goods and services from the small and medium sector.
Refined petroleum products, garments, textiles and apparel, accessories, leather clothes & footwear
etc. constitute a major share of India's exports to France. French imports of refined petroleum products,
auto equipment, fish and fish products and gems & jewellery and organic chemicals have shown growth.

Major items of French exports to India comprise electrical equipment, aeronautical & space
construction products, measuring & control equipments, iron & steel products, equipment for emission
and transmission of sound & image, mechanical equipments, organic and other chemical products,
general & special usage machines, equipment for reception & recording of sound & image, machine
tools, engines and turbines, etc.

Investments

French investments: There are about 600 French companies in India. France is the 9th largest foreign
investor in India with cumulative investment of approximately USD 1.5 billion. The number of technical
and financial collaborations approved with France is 952. It has been indicated that investments of € 8
billion by major French companies are planned in the energy, automobile, aerospace, food processing
and other sectors by 2013.

Indian investments: India is the 13th largest investor in France. There are about 90 Indian companies in
France and have invested in IT, pharmaceuticals, plastic industry, auto parts, etc. In 2007, Indian
companies invested around Euro 0.5 billion. Cumulative Indian investments have been of USD 1 billion
since April 1996 and 6,073 jobs have been created or maintained in France.

Bilateral Economic Agreements

India and France signed a Bilateral Investment Protection Agreement (BIPA) in 2000 and an Avoidance of
Double Taxation Agreement was signed in 1992. An MOU on Intellectual Property Rights (IPR) was
signed in July 2006. An Agreement on Social Security exemption was signed during PM’s visit to Paris in
September 2008. The process to implement the Social Security Agreement is under way and it is
expected that the SSA will come into force in early 2011.

India-France CEO’s Forum: During PM’s visit to Paris in September 2008, it was decided to set up an
India-France CEOs Forum to be co-chaired by Mr. Narayana Murthy, Chief Mentor of Infosys and Mr.
Bertrand Collomb, former President of Lafarge. The first meeting of the Forum was held in New Delhi on
28-29 November 2009 and the second meeting was held in Paris on 24th & 25th June 2010. The next
meeting is proposed for December 2010 at Delhi.

Small & Medium Enterprises (SMEs): Both India and France are encouraging SMEs. Ubifrance, FICCI, ESC
and other Indian trade promotion organisations such as NASSCOM, CAPEXIL and AEPC have led
delegations comprising mainly SMEs to encourage SMEs of both countries to do business and work with
each other in developing new technologies and enhancing trade.

India France trade relations is a common forum of India and France Chamber of Commerce and Industry.
The Federation of Indian Chambers and Commerce (FICCI) and UBIFRANCE - the agency for international
business development, under the Ministry of Economy, Finance and Industry, France, are the prime
facilitators of trade and business between each other. FICCI and UBIFRANCE represent the trade and
business community of their respective countries. India France trade relations aim at facilitating better
India and European Union trading relation. Further, their common goal is to double India France trade
relations and business value within 5 years.

French investments in India during the last 15 years have brought US$ 1.76 billion into Indian market.
The India France trade relations facilitated business to the tune of US$ 6.2 billion during 2005-06. A
number of French companies have ventured into the Indian market as an outcome of better India
France trade relations. The sectors that have attracted the most FDI from France are:

Electrical Equipments, Services Sector, Telecommunications, Transportation Industry, Fuels, Chemicals,

Food Processing Industries, Cement, Glass

Further, scope of investment and development of trade and business among India and France lies in
areas like:

Small & Medium Enterprises, Manufacturing, Information technology, Pharmaceuticals, Environment,

Aeronautics, Life sciences

India France trade relations further aim at forging ties for the development of the Agribusiness and
Food-processing Sector. The Indian Food-processing Sector produces around 50 million tons of fruits and
90 million tons of vegetables. But inadequate food processing infrastructure in India could only process
6% of the perishable products available in India. The Indian Agribusiness and Food Processing Sector
aims to increase the percentage of processed food available in India to 20% over the next 10 years. A
huge future demand for processed food is expected with changing socio-economic situations. The
government of India's Mid-day Meal Program for primary school children is another prospective area of
Agri and Food-processing Industry. The Processed Food Sector in India offers tremendous scope in
organized street food business. Moreover, India France trade relations envisage investment in the
Environment sector as well. France's expertise in this sector is well acclaimed throughout the world,
especially its success in implementing Clean Development Mechanism projects according to the Kyoto
Protocol for reducing emission levels of green house gases.

A further objective of better India France Trade Relations could be utilizing France's economic and
business leadership for entering into European market through different trade agreements France had
entered into with its European business partners.