France's History, Market System, Government, and Economic Growth

France
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Executive summary
France if the 7th largest economy in the world and it has been growing exponentially since World War II. Following the World War II, the government undertook strategies that propelled the country formerly ravaged by war to an economic powerhouse regionally and globally. Its economy was affected adversely by the oil crisis in 1970s and the 2008 global crisis but it has remained relatively resilient and stable even in the face of these global economic shocks. The economy of France has always been heavily influenced by its politics and the socialist government had nationalized many enterprises post-war and through the economic recovery period. The economic agenda of the incumbent regimes has on several instances especially under socialist governments which either instituted laws that slowed the economic growth. But France has also been strategic in its economic policies and championed the formation of EU which has helped the country have a bigger economic market for its goods and services. Undoubtedly, the country has employed economic tools to stabilize various issues that has steered the economy to its current position. This essay details the history and market of the France economy and the government involvement in it highlighting the key interventions adopted to spur economic growth and or the strategies that shaped France economy history. Additionally, the article details the monetary and fiscal policies and their historical utility to fix the economy.
Describe France history and market system – since 1990
Since 1990, the French economy improved steadily. During this time, together with the other European major economies started the European Union. At the same time, the France government continued privatization of various enterprises that had been nationalized under the socialist regime. Nationalizing many aspects of the economy make the economy very susceptible to political waves as the entities which are un by the government mirror the political will. France suffered slow growth under socialist governments because of the overly nationalized corporations in many industries which were adversely affected by socialist policies. In the 2000s the French economy continued growing at a moderate rate up to 2008 when the global financial crisis slowed down its economic growth. In the 2000s the country also grappled with privatization, pension and social welfare reforms which affected its economy and sparked widespread mass demonstrations. However, unlike other European nations, France was relatively less affected. However, the government still injected 10.5bn Euros into the country's six largest banks to help the economic recovery following the crisis. In 2010, the government also adopted austerity measures to reduce its high public debt. Subsequently, the government announced other austerity measures to tame the public debt in 2011, 2012 and 2013. In May 2013, France entered its second recession period in 4 years where its economy shrunk by 0.2% and later in the year, the country is relegated by Standard and Poor's credit rating company to aa rating citing high unemployment which signified its economic hardships. High unemployment in France is a complex problem because the government is the largest employer and it is undertaking austerity measures to tame public debt. On the other hand, the small and medium enterprises are do not have economies of scale to compete against the governmental corporations and hence create more job opportunities. However, in 2014, France unemployment raises to over 10% and comparing it to Germany which is their neighbor at 4.3%, the austerity measures adopted to address the public debt had started to increase unemployment. To date, the main weakness of France economy is high unemployment rates and nationalized corporations in key industries.
Overview of government’s role in the economy
The France government institutes market regulatory framework which is structured by the government and ratified by the parliament. During the 2008 global financial crisis, the government bailed out six of the country’s largest banks to absorb the economic shocks of the crisis. It is also involved in several high-profile transactions such as merger and acquisitions. In some cases, politics interferes with the mergers and acquisitions. The government has also been using several tools to ensure it economic growth and stability. The government market intervention tools included fiscal policies which affected how the government collected tax, budgeted for its expenditure and controlled the supply of money in the economy. Its expenditure has been majorly externally funded and the government borrowed heavily which led to its public debt burden it is struggling with at the moment. The government has used each of the economic tools in varying degrees to stimulate the economy.
GDP
The gross domestic product (GDP) in France was worth 2582.50 billion us dollars in 2017(trading economics). The GDP value of France represents 4.17 percent of the world economy. The GDP reached a historic high in 2008 just before the global financial crisis at 2918 billion U.S. dollars. Since the GDP plunged due to the financial crisis and the historical problems which had cumulatively caused stress in the economy. The country has the highest unemployment rates relative to other European economies and that workforce in slightly over 3 million people. Thus, the current GDP can be higher if the unemployment rates can be reduced. However, the issue to reinvigorate the GDP are multifaceted partly because of the nationalization project of the socialist government in the 80s. The nationalization increased the public expenditure on recurrent expenditure and the investment I privatization has not been able to revamp the economy. After the glorious period of French economic growth at almost 6% since 1947- 1973, the GDP growth slowed. It increased under the nationalization project of the 80s, then through the 90s, after the European integration GDP 2002. For a short period where it dipped due to the social welfare pressure and the public demanding pension reforms. The GDP again rallied to 2008 where it reached historic high before stagnating and starting to drop.
Source: CITATION Tra18 \l 1033 (Trading Economics, 2018)
Economic growth
French economic growth has been increasing steadily since the end of World War II until the 2008 global financial crisis. The country positioned itself as a center of fashion tourism and Paris remains to be the world’s biggest tourism center. Over the years, the economy absorbed many shocks such as the oil crisis of the 1970 and though it slowed the economic growth, it recovered fast. In 1980s, under the then socialist government which nationalized the big enterprises such as Air France, Renault among other, the economy performed relatively well and restarted another phase of accelerated growth through the 90s. It slowed down in the late 90s and early 2000s. There was a short recession during this period and it grew exponentially again to 2008 where it recessed due to the global financial markets’ stability and poor performance. Since then, it has stagnated. Some of the reasons for stagnation is because of the high public debt that has adversely affected the economy. French economic growth has been influenced by politics and government policies about the economy and the government. For example, the oil crisis of the 1970s and the global financial crisis of 2008 substantially reduced the earlier witnessed economic growth rates in each respective case. Additionally, the politics affected growth rate since the socialist regimes relatively reduced the economic growth rates in the respective periods they were in power.
Unemployment
France unemployment has been its major economic issue since the 1970s oil crisis when it hit a historic high of the time. Since it has not been substantially brought down and France has been leading in unemployment rates of all the major economies in Europe. France unemployment issues are multifaceted, and they partly stem from its nationalizing its big corporations which added to the government payroll. France has the highest of civil servants of all European countries. In recent years, especially after the 2008 financial crisis, the country has been grappling with its enormous public debt. The go...