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From Denver 1997 to Birmingham 1998
Country Report


~ France Contents ~ Country Performance Assessments ~

Summit Issues for France


Although Mr. Chirac suffered a terrible blow last year after the Socialist victory at the National Assembly elections, his approval rating remains high and stable. Moreover, the President is bolstered by France's position within the European Union. 1998 will be a big year for the EU as the participating countries in the common currency work towards their established criteria.

Through the European Union, France is setting itself up to be a principal leader in the new multipolar world dominated by regional trading blocks. France counts on the strength of the EU to counterbalance US hegemony. The conditions in France seem to be ripe for it to take such a leadership role. Investment is on the rise and industrialists expect it to increase 10% this year. Before the Asian Crisis and the Socialist plan for a 35-hour work week the growth rate had been predicted at 3% for 1998. The Minister of Finance still holds to this figure. The economic recovery, initially export-driven, is being aided by a more vigorous than expected domestic demand. Employment remains a significant challenge for the French government and can only be solved through structural change and debt reduction; France's debt is uncomfortably close to 60% of GDP.

On the whole, France seems set to join with its other strong European partner, Germany, to act as a locomotive within the G-8 this year.

Unemployment and Job Creation

The French economy is finally recovering from sluggish economic growth, fueled by rising domestic demand. However the unemployment level stands at a high 12.1% (February 1998). Most analysts agree that the employment situation is likely to improve only marginally because of the structural nature of the problems, which includes high levels of social security contributions and labour market rigidities. Nonetheless, the new Socialist government proposed a series of measures aimed at curbing unemployment. These measures included, among others, reducing the workweek to 35 hours. This initiative has recently been adopted by the National Assembly and is set to be implemented by the year 2000. The government has also developed a project aimed at providing 350,000 public sector jobs for youth; as of March 31, 1998, 50,000 have been hired. These measures are taking place while the government is being torn between its commitment of fiscal austerity to the European Union and public pressure to pursue labour-friendly policies.

Development in Africa

While France has pressed for a strong G-8 commitment to African development at past summits, the events of the past year have kept African policy at the top of France's agenda. With 0.16% of GDP devoted to African aid - 16 times greater than the relative GDP share provided by the US - France is well-positioned both to stress the importance of aid & trade and to respond to American efforts to increase its own influence in the region, possibly at the expense of France's. In fact, France's official policy now calls for the pursuit of non-interfering economic partnerships with all of Africa, not just former colonies. This policy redefinition may also be due to the negative feelings felt by many about alleged French complicity in the 1994 Rwandan genocide. Finally, France's championing of African issues at the Summit is perceived as critical to the development of future African markets, many of, which are naturally predisposed to French goods due to language ties. Given the current US interest in the region, the African question is almost guaranteed discussion at the Summit, however any proposals for action outlined in the final Communiqué will be watered down, given the fundamental "trade vs aid" debate pitting France vs the US. Still, the G-8 leaders are expected to agree on the validity of both political philosophies and commit to the discussion of appropriate mechanisms & programs in the future.

International Financial System Reform and the Asian Crisis

France's traditional position is that, on the subject of economic development, unrestrained market forces prone to speculation will impede the power of elected governments to implement economic policy. According to the French perspective, the recent Asian financial crisis has shown that the international financial system needs regulation. One can therefore expect France to build on this doctrine and propose a new set of rules, especially for the largest international lending institutions such as the IMF and the World Bank, whose efficiency in dealing with the crisis was highly criticized.

Combatting Fresh Water Shortages

Among other issues of international priority is the campaign to combat global fresh water shortages. The Conference on Fresh Water, held in Paris from March 19 to 21, 1998 at the UNESCO headquarters, served to re-launch the spirit of the original Rio Summit. The French perception is that fresh water lies at the heart of environmental stability and sustainable development. Since environmental issues figured so high on the Denver communiqué and the fresh water campaign represents a successful French initiative, it is likely to be brought up again by President Chirac.

Fighting Crime

G-8 countries recently announced a series of measures aimed at deterring and apprehending traders in illegal substances throughout the world. Such measures include: increasing training of officials in environmental enforcement, fighting illegal trade, raising public awareness, etc. Another front will involve the battle against cross-border crime. At Birmingham, G-8 countries will try to devise a common stand on how to tackle the problem of overcoming high tech crime's borderless nature. France's position is in tune with that of its partners regarding this issue.

Middle East Peace Initiatives

Fresh from the success of the Northern Ireland peace agreement, British Prime Minister Tony Blair is attempting to transfer the momentum from Northern Ireland to jump start the previously stalled peace process in the Middle East. Blair invited Arafat and Netanyahu to meetings in London beginning in May 1998. At the Denver Summit, the G7 leaders agreed to reinvigorate the implementation of the Oslo Accords and to uphold the principles of Madrid, including the exchange of land for peace. The French position regarding the Middle East has been influenced by its links to the Arab world and the European community is united in its belief that the US has not done enough to force Israel back to the negotiating table. Accordingly, it is likely that France will take a leading role among other European countries in promoting a pro-Arab position at the Birmingham Summit.

~ France Contents ~ Country Performance Assessments ~

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