France in the European Union - Coursework Example

France in the European Union Main Parameters France is one of the founding members of the European Union (EU). France joined the EU in 1952. The capital of France is Paris and the country has a total population of 64.3 million and the total area of France is 550 000 km sq (europa.eu, n.d.a). France is a member of the Eurozone and a member of the Schengen area. Geographically, France is the largest of all countries included in the EU. France is a republic. The Constitution that has been modified numerously defines the institutions of governance. Established in 1958 and having been modified 17 times, the Fifth Republic provided the executive president and ministers with relatively extensive powers than other western democracies. Fig. 1. shows the wealth profile of France in terms of its GDP over the last decade. The GDP of France in 2014 as reported by the World Bank Group is 2734.95 USD Billion (tradingeconomics.com, 2014). The 10-year bond yield of France have dropped to 1.112 per cent (Myanda, 2014). France showed the government deficit as a percentage of GDP of -4.3 and -3.8 in 2013 and 2014 respectively whereas in 2015, it is projected to be -3.1 (OECD Library, 2014). Michel Sapin, the French Finance Minister said that France “would run a budget deficit of 4.3% of gross domestic product next year—far from the 3% deficit it had previously pledged” (Steinhauser, Dalton, and Fidler, 2014). Fig. 1: Wealth Profile of France (tradingeconomics.com, 2014). Why France Joined the EU? The EU came into existence with the aim of bringing an end to the wars between the neighbors. The European Coal and Steel Community started uniting the European countries in 1950 on political and economic grounds with a view to establishing lasting peace (europa.eu, n.d.b). France was one of the six founders of the EU. France saw a host of benefits in joining the EU including cultural exchange with other countries and economic strength resulting from eradication of custom duties’ charging while the countries conduct trade with each other. Other benefits including establishment of joint control over the production of food were also foreseen. In the 1960s, members of the EU not only had enough food to suffice themselves but also had surplus agricultural produce (europa.eu, n.d.b). Doing Business in the EU – Points of Single Contact Citizens of a member country of the EU are allowed to establish business in France. Likewise, French nationals are allowed to establish business in other member countries of the EU. The business can be established in two forms; the freedom to provide services or the freedom of establishment. Business entrepreneurs can gain access to the different entrepreneurship sites in the member countries using the portal of single contact (EUGO) (guichet-entreprises.fr, n.d.). The freedom to provide services can be defined as a service’s temporary provision that a provider performs in a member state other than the state where the service has been established. An example of this can be of an architect who is from France and who has provided services to a client who is based in Germany. In the case of services that are provided cross-border, temporary movement to the host country is required on the part of the service provider. A lasting presence in addition to the ongoing activity paves way for establishment under the freedom of establishment in the country. Freedom of establishment, on the other hand, allows for the establishment and management of companies by citizens of a member country of the EU with the very conditions that apply on the nationals of the country. An example for this can be of a French architect who establishes his business or practice in Germany as an architect. Eurobarometer The Eurobarometer survey conducted from 12 to 30 June, 2009 in France was based on a sample of 1,038 people aged over and including 15 years (ec.europa.eu, 2009). The EU crisis has had little, if any, effect on the level of happiness of the French people with 84 per cent consider themselves very satisfied in their lives despite the fact that 87 per cent perceive the state of French economy to be bad (ec.europa.eu, 2009). Unemployment has been recognized by 65 per cent respondents as a major problem of concern in the future (ec.europa.eu, 2009). However, the French people are generally optimistic about future. French have a relatively stable image of the EU. Three main areas that depict France’s association with Europe include freedom of traveling and studying, peace, and the Euro. People are generally optimistic about France’s association with the EU. Majority of people do not trust the government. French are generally in favor of decision-making by the EU at a European level. Majority of French people have expressed their concerns against globalization and are in favor of introduction of global regulations. EU in the eyes of French people is well-equipped for economic competition in the world. Most French think that the solution for reacting to the EU crisis is not European and is rather global. There has been a decline in the number of French people who think that the best way of guaranteeing is free competition. While they hold a strong French identity, many French are in favor of in-pour of immigrants into their country. Their approach toward evolution of social welfare is generally pessimistic. Internal Market Scoreboard France has had the worst record of transposition of the 28 member states of the EU “followed by Greece, Germany, Italy and the Benelux countries” (ec.europa.eu, 2004). One of the prime causal factors for this is the fact that remedy delays in transposition are the longest in France. 30 per cent of the infringement cases can be attributed to Italy and France together (ec.europa.eu, 2004). Having transposed up to 62 directives on time, France exists on the bottom of the league of transposition (ec.europa.eu, 2004). The transposition deficit result of France has changed over the years. Presently, France is one of the 12 member states that have equaled or achieved their best transposition deficit result since the year 1997 (europa.eu, 2014). This indicates that member states give high priority to the timely transposition. Position of France in the EU Crisis France is suffering from a drastic deterioration in competitiveness more than any other member of the EU, even though it is the second-largest economy. The issue with France is that for years, the country has exhibited high levels of spending without sufficient growth. This has eradicated the room to keep lifting the debts. The net rise in GDP over the eight years between 2004 and 2012 was just 7.3 per cent all of which occurred from government spending (Tully, 2013). This spending is supported by the private economy of the country that is likely to push the country into debt further. In the second quarter of 2014, the economic activity came to a halt across the single currency in 18 nations. This caused France to pressurize the European Central Bank to boost growth. It was the second successive quarter for which France’s growth was registered to be zero. France has tried to control the spending completely but it is unlikely that the country will be able to meet the public deficit target it had set for this year. “Draghi is involved in a game of brinkmanship. It is not fiscal austerity but evidence of structural reform that he is looking for before he considers sanctioning European style QE, especially from Italy and France…However, structural reforms do not happen overnight and, as the case for QE strengthens, any delay will have a disproportionate impact on the pace of recovery in the rest of Europe” (Curtin cited in Elliott, 2014). Critical Conclusion France is one of the founding members of the EU. France is the co-guardian of Euro with Germany. The rate of 10-year government bonds of France is just a little above that of Germany. In spite of the economic crisis, France has not been as stressed as other member countries including Portugal, Greece, Spain, Ireland, and Italy. So far, the deficits’ and debts’ trajectory of France is less distressing than that of Portugal, Greece, Spain, Ireland, or Italy. France has seen the worst transposition record over the last decade. France played a vaunted role in the establishment as well as success of the euro in the beginning which has in turn enhanced its solidity aura. Presently, despite being the second-largest economy of the Eurozone, the products of France cost much more to produce in comparison to other goods from the neighboring European countries or the goods from Asia. This is a cause of drastic decline in the exports of France and the country is currently going through a phase of economic crisis. However, the French people are optimistic about the future of the country, though a vast majority of them are of the view that solution for reacting to the EU crisis is global. France is a critically important member of the EU and its national and international policies have effects on the functioning of other member states of the EU along with its own economic and political stability. References: europa.eu 2014, Internal Market Scoreboard: a record-breaking 15th anniversary edition! [Online] Available at http://europa.eu/rapid/press-release_IP-13-127_en.htm [accessed: 22 October 2014]. europa.eu n.d.a, France, [Online] Available at http://europa.eu/about-eu/countries/member-countries/france/index_en.htm [accessed: 22 October 2014]. europa.eu n.d.b, The history of the European Union, [Online] Available at http://europa.eu/about-eu/eu-history/index_en.htm [accessed: 22 October 2014]. ec.europa.eu 2004, Internal Market Scoreboard, [Online] Available at http://ec.europa.eu/internal_market/score/docs/score13/score13-printed_en.pdf [accessed: 22 October 2014]. ec.europa.eu 2009, Eurobarometer 71: Public Opinion in the European Union, [Online] Available at http://ec.europa.eu/public_opinion/archives/eb/eb71/eb71_fr_en_exec.pdf [accessed: 22 October 2014]. Elliott, L 2014, France calls on ECB to act as eurozone growth grinds to a halt, the guardian, [Online] Available at http://www.theguardian.com/business/2014/aug/14/eurozone-growth-economy-germany-fall-france-stagnation-italy [accessed: 22 October 2014]. guichet-entreprises.fr n.d., French wishing to practice in Europe, [Online] Available at https://www.guichet-entreprises.fr/?q=node/12 [accessed: 22 October 2014]. Myanda, L 2014, Greek Bond Rout Drags Down Markets From Ireland to France, Bloomberg, [Online] Available at http://www.bloomberg.com/news/2014-10-16/greek-bonds-slump-on-bailout-concern-dragging-italian-debt-lower.html [accessed: 22 October 2014]. OECD Library 2014, Government deficit / surplus as a percentage of GDP, [Online] Available at http://www.oecd-ilibrary.org/economics/government-deficit_gov-dfct-table-en [accessed: 22 October 2014]. Steinhauser, G, Dalton, M, and Fidler, S 2014, EU Prepares to Reject France’s 2015 Budget, Setting Up Clash Over Deficit, The Wall Street Journal, [Online] Available at http://online.wsj.com/articles/eu-prepares-to-reject-frances-2015-budget-setting-up-clash-over-deficit-1412538765 [accessed: 22 October 2014]. Tradingeconomics.com 2014, France GDP, [Online] Available at http://www.tradingeconomics.com/france/gdp [accessed: 22 October 2014]. Tully, S 2013, The euro crisis no one is talking about: France is in free fall, Fortune, [Online] Available at http://fortune.com/2013/01/09/the-euro-crisis-no-one-is-talking-about-france-is-in-free-fall/ [accessed: 22 October 2014]. Read More