Due to its decimal structure the franc can only be a creation of the French Revolution. One of the fathers of the new coin is the gentleman shown here: Napoleon Bonaparte
The French currency had been weakened by inflation and the constant degradation of the metals used for centuries.
At the beginning of the French Revolution the inflation increased and saved assets continued losing value. People took their gold and silver abroad to save them.
As a result emergency currencies and paper bills were issued. In 1794 the leaders decided in Paris that the French monetary system had to be reorganized and reformed.
Currency history of France
One year later, in 1795, the new currency, the franc based on 5 grams of silver was officially issued.
franc was adopted by Belgium in 1832 and later, by Switzerland in 1850 Even the German mark was strongly influenced by the franc and remained the national currency until the introduction of the euro in 1999 (for accounting purposes) and 2002 (coins and banknotes). French franc against the euro was set at a fixed parity of 1 EUR=6.55957 FRF . .
INTRODUCTION OF FRANCE
France officially the French Republic is a country located in Western Europe , with several overseas islands and territories located on other continents .
Is bordered (clockwise from the north) by Belgium , Luxembourg , Germany , Switzerland , Italy , Monaco , Andorra , and Spain .
France covers 547,030 square kilometres (211,209 sq mi )
CAPITAL – Paris , OFFICIAL LANGUAGE –French
ECONOMY – 5 th Largest , POPULATION- 65.1mn
The French Republic is a unitary semi-presidential republic with strong democratic traditions
The French parliament is a bicameral legislature comprising a National Assembly and a Senate .
BANQUE DE FRANCE
Headquarters Paris, France
Established 18 January 1800
Governor Christian Noyer
Exchange Rate Regime
From 1971 to 1974, France maintained a two-tier exchange rate structure, composed of a fixed Commercial Franc Rate (for foreign trade transactions) and a freely fluctuating Financial Franc Rate (for all other remittances )
In 1979 , France participated the ERM of EMS. In accordance with this agreement, France maintains the spot exchange rates
In January 1, 1999 , France participated in a currency union (EMU) comprising 11 members of the EU. Internal conversion rates in respect to the national currencies of EMU participants were fixed to the euro, whereas the external exchange rate of the euro is market determined.
Macro Economic Analysis
GDP GROWTH RATE -1.2% ( April 09)
GDP - composition by sector: agriculture: 2.2% industry: 20.3% services: 77.4% (2008 est.)
$2.097 trillion (08) $2.083 trillion (07)
$2.074 trillion (06)
Investment : 21% of GDP (08)
Inflation rate : 1% (08)
FOREX RESERVES :125,222 mn $ (09)
Exchange rates : euros (EUR) per US dollar - 0.6827 (08), 0.7345 (07)
Macro Economic Analysis
Budget : revenues: $1.439 trillion
expenditures: $1.525 trillion (08)
Public debt : 67% of GDP (08)
31,939 kilometers (19,846 miles) of rail lines .
828,000 kilometers (514,605 miles) of roads .,
47 per cent of the waterways are heavily used.
474 airports in France,
Balance Of Payments France -24,227 -22,727 -21,909 Current transfers 24,843 29,309 29,688 income 14,457 15,000 13,411 services -59,087 -40,461 -30,395 goods -44,014 -18,879 -9,205 Current account 2008 2007 2006 EURO MILLIONS
Balance Of Payments France NOTE- official reserves already being added in financial account , given only for information. 696 1,854 -197 Capital account 2008 2007 2006 EURO MILLIONS 8,518 -478 -8,775 Official reserves -34,794 -20,619 3,353 Net errors and omissions 78,112 37,644 6,049 Financial account
GRAPHICAL REPRESENTATION OF BALANCE OF PAYMENT
EXPORTS OF FRANCE
Exports : $761 billion (08 )
Commodities : machinery and transportation equipment, aircraft, plastics, chemicals, pharmaceutical products, iron and steel, beverages
Exports - partners : Germany 14.9%, Spain 9.3%, Italy 8.9%, UK 8.1%, Belgium 7.3%, US 6.1%, Netherlands 4.1% (08)
Imports - partners : Germany 18.9%, Belgium 11.4%, Italy 8.4%, Spain 7.1%, Netherlands 7%, UK 5.6%, US 4.4%, China 4%
FOREIGN DIRECT INVESTMENT OF FRANCE -70,436 -47,631 -30,949 NET FDI 66,338 75,892 57,273 FDI INWARD -136,774 -123,523 -88,222 FDI OUTWARD 2008 2007 2006 EURO BILLIONS
CAPITAL ACCOUNT CONVERTIBILITY
The French government began to loosen its draconian exchange control sat the end of 1983
In 1985, the socialists began to liberalize virtually all transactions, including authorizing Eurobond issues denominated in French francs.
When the Right-wing government of Jacques Chirac Came to power in 1986 and 1988 France continued to liberalize, though the pace slowed and focused on other transactions, such as the purchase of secondary residences abroad and exchange purchases and sales by firms.
The socialists finished the task upon their return
In January 1990 was France’s capital account fully
Country Risk Tier
United Kingdom CRT-1
SCAMS IN FRANCE
President Jacques Chirac (UMP) was accused by the Canard enchaîné of disposing of 50 million euros in a Japanese bank account in the Tokyo Sowa Bank owned by Shōichi Osada, who has since been sentenced to prison in Japan. (2006)
2005 THE CIVIL UNREST.
April 2006 prime ministry Dominique de Villepin, was accused of spying over his political rival Nicholas Sarkozy in 2004