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COUNTRY BRIEFS


INTRODUCTION

The Republic of France has a population of more than 64 million people. France has overseas departments and collectivities (islands) in the Atlantic, Indian, Pacific and Southern Oceans. Metropolitan France in Western Europe accounts for just over 80 per cent of the territory and 96 per cent of the population of the French Republic.

France is an influential member of the European Union (EU). It attaches a high priority to European integration. France last held the EU Presidency 1 July-31 December 2008. France is a Permanent Member of the UN Security Council and is a nuclear weapons power. It is a member of the Group of Eight (G8) and Group of 20 (G20) major economies. France held the Presidency of both the G8 and the G20 in 2011, and hosted the G20 Summit in Cannes in November 2011. France takes a leading role in contributing to the Middle East peace process and development issues in Africa.

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POLITICAL OVERVIEW

System of government

The French political system is governed by the Constitution of 1958, which established the 'Fifth Republic', a Presidential system. The President is elected by universal suffrage and serves a five-year term. The current President, Nicolas Sarkozy, was elected in May 2007. Following recent constitutional changes, French Presidents can serve a maximum of two terms. The first round of the 2012 Presidential elections has been set for 22 April, with a 'run-off' round on 6 May if necessary.

The national legislature, which may be dissolved by the President, is composed of two Houses: the Upper House or Senate (348 members who serve six year terms) and the Lower House or National Assembly (577 members). For the first time since the establishment of the Fifth Republic, a Socialist-led coalition holds a majority in the French Senate after strong gains by left wing parties in Senate half-elections held on 25 September 2011. Elections for the National Assembly are held every five years — the next elections will take place on 10 and 17 June 2012. The Party or coalition which wins a majority in the National Assembly will provide the Prime Minister and the bulk of the cabinet for the following five years. There is a clear separation of executive and legislative powers. The Prime Minister and all other Ministers are appointed by the President, who also has the power to dismiss them.

Under the 1958 Constitution the President is the head of the armed forces, guarantor of national independence and responsible for signing international treaties. The government determines and implements national policy and the Prime Minister is responsible for national defence.

On 21 July 2008, both houses of the French Parliament (Congress) agreed to broad constitutional reforms which further define the president's powers, including requiring consultation with Parliament on appointments and military deployments, setting the above-mentioned two term maximum mandate and limiting discretionary powers. Under the reforms the President is able to address both houses of parliament for the first time since 1875. President Sarkozy delivered his first such address on 22 June 2009. The reforms also serve to reinforce the powers of the parliament and provide new rights for French citizens, including legal recognition of the right of equal access for men and women to high level positions.

President Sarkozy's UMP (Union for a Popular Movement) Party won an unequivocal victory in the European Parliament elections held in France on 7 June 2009, with a number of French Government Ministers elected to the Parliament. President Sarkozy credited the success of France's EU Presidency (July-December 2008) and the Government's efforts in response to the international financial crisis for the win, and regarded it as a mandate to push ahead with elements of his long-standing domestic reform agenda. A subsequent French Government reshuffle of positions, and some portfolios, on 24 June 2009, saw eight new Ministers enter the French Government.  While government traditionally starts to wind down in France after Bastille Day (14 July), both houses of Parliament held exceptional sittings until the end of July 2009 to push through the government's reform agenda.

The UMP however did not fare so well in French regional elections held on 21 March 2010, where the Party was comprehensively defeated by the Socialist-led opposition alliance. President Sarkozy subsequently initiated a further minor reshuffle of his Ministry. The resignation of two junior ministers in July 2010 did not lead to new appointments. President Sarkozy undertook a cabinet reshuffle in November 2010, with Mrs Michele Alliot-Marie appointed Minister for Foreign and European Affairs (replacing Mr Bernard Kouchner), Mr Henri de Raincourt as Minister for Cooperation, and Mr Pierre Lellouche as Minister of State for Foreign Trade.

In a further reshuffle in February 2011, following Mrs Alliot-Marie’s resignation, he replaced Ministers in the key portfolios of Foreign and European Affairs, Defence, and the Interior. Mr Alain Juppé, formerly Defence/Veterans’ Affairs Minister, was appointed Minister for Foreign and European Affairs (in addition to his ongoing title of Minister of State). Juppé is a well-known figure in French politics — he was Foreign Minister 1993 — 1995 and Prime Minister 1995 — 1997 in the Government of former French President Jacques Chirac. Mr Gerard Longuet was appointed Minister for Defence. Former French Finance Minister Ms Christine Lagarde’s selection as the Managing Director of the International Monetary Fund (IMF) led to another reshuffle of positions (Sarkozy’s tenth since taking office). Francois Baroin was appointed to the portfolio of Economy, Finance and Industry in June 2011.

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ECONOMIC OVERVIEW

France is a leading industrialised country with a mature and sophisticated market economy. GDP is dominated by the services sector. France is the world's fifth largest exporter — the European Union as a bloc is France's most important trading partner. Paris is a leading financial market in the Eurozone. France is the most energy independent of the G8 industrialised countries owing to its heavy reliance on nuclear energy. Over 75 per cent of electricity is generated by nuclear power plants.

France performed better than most other European countries during the global financial crisis, despite contracting by 2.5 per cent in 2009, (the contraction for the euro area as a whole was 4.1 per cent). Recovery was assisted by a €26 billion (A$51.3 billion) stimulus package announced in December 2008 and the provision of bank guarantees and funding to recapitalise French banks. The government also established a sovereign investment fund to help maintain France’s manufacturing capacity, with the automotive sector a key recipient. France followed the lead of the UK by implementing a temporary one-year tax on bank bonuses. Despite this, a number of large-scale strikes were held in 2009 over the government’s handling of the crisis, driven by an unemployment rate that had risen to 9.9 per cent.

President Sarkozy has identified the country’s various deficits and unemployment as the most important challenges facing France in exiting the global financial crisis. France has committed in its 2010-2013 Stability Program, presented to the European Commission on 1 February 2010, to reducing its high national budget deficit (7.8 per cent of GDP in 2010) to 3 per cent of GDP by 2013. Public debt in France reached record levels of 81.7 per cent of GDP in 2010, and the Government expects it to increase to around 88 per cent in 2012, after which it is projected to decline as a result of the Government’s austerity program.

Figures released on 13 May by the INSEE (National Institute for Statistics and Economic Studies) showed that in the first quarter of 2011, GDP grew by 1.0 per cent, the most significant increase since the second quarter of 2006. Manufacturing production rose by 3.4 per cent, the highest increase in 30 years, and around 60,000 new jobs were created, principally in the services sector. Loans provided to French banks during the financial crisis were repaid in full. The OECD revised upwards its forecast for economic growth in France to 2.2 per cent. However, the French government recently revised downwards its economic growth rate projections for the fourth quarter of 2011, indicating that growth might be zero, with the OECD revising its growth figures for France for 2012 down to 0.3 per cent. France lost its Standard and Poors triple-A credit rating in January 2012. France registered a record trade deficit in 2011 (France has not run a trade surplus since 2002).

The Government will continue its policy of not replacing one in two retiring public servants and has announced a freeze of public sector salaries for 2011. President Sarkozy’s controversial pension reforms, which will see the minimum retirement age for a partial pension progressively raised from 60 to 62 and for a full pension from 65 to 67 by 2018, were approved by the French Parliament in October 2010. France’s new Financial Regulation and Systemic Risk Council – which seeks to forestall risks in the financial sector – was also established in October 2010. The Council met for the first time in February 2011.

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BILATERAL RELATIONSHIP

Australia's relations with France are positive and friendly. The bilateral relationship is underpinned by strong and enduring historical links – consular and diplomatic engagement since 1842, and cooperation in two World Wars. Dialogue and practical cooperation between the two countries on key global issues have been strengthening on many fronts in recent years, including through our common membership of major forums such as the G20, Asia-Europe Meeting (ASEM — which Australia joined in October 2010), and the Organisation for Security and Co-operation in Europe (OSCE), which Australia joined in 2009 as an Asian Partner for Cooperation. Our participation in these and other multilateral meetings has increased the scope for high-level bilateral engagement.

Australian and French officials meet regularly for political-military (Pol-Mil) talks. The last talks were held in Canberra in May 2011 and prior to that in Paris in November 2009. Senior Officials talks were held in Paris on 20 May 2010.

The Pacific region, where both countries have direct interests, continues to be an important focus of bilateral engagement. Commercial links are substantial and France is an increasingly important source of direct investment and technology, including in the defence sector. Cooperation in the surveillance of valuable fisheries resources is also an area of ongoing bilateral activity, under the Australia-France Enforcement Agreement which entered into force on 5 January 2011. The Agreement builds on the bilateral Treaty on Cooperation in the Maritime Areas adjacent to the French Southern and Antarctic Territories (2005) and allows Australia and France to cooperatively enforce each other's fishing laws in their exclusive economic zones (EEZ) and territorial seas in the Southern Ocean. Although Australia and France share many common interests important policy differences exist, notably in the area of agricultural trade liberalisation. People-to-people links between Australia and France are growing, as are science, research and cultural exchanges.

High level contact

High level contact and visits are important in promoting cooperation and understanding between Australia and France.

-- The former Minister for Foreign Affairs, the Hon Kevin Rudd MP, visited France on 19 Janaury 2012.  Mr Rudd and French Foreign Minister Alain Juppé signed a Joint Statement of Strategic Partnership which covers historical, political, economic, defence and security interests, and people-to-people links.

-- French Minister for Foreign and European Affairs, Mr Alain Juppe, visited Australia 10-11 September 2011 (Sydney and Canberra). His visit was part of a wider trip to the region including New Zealand and China. Juppe was the most senior French Minister to have visited Australia since 2008 (when then-Defence Minister Herve Morin visited)  His was the first visit by a French Foreign Minister since 1983.

-- French Minister for Transport, Thierry Mariani, who represented France at the 2011 ANZAC Day Dawn Service in northern France, visited Australia in August 2011.  He is standing for election in 2012 as a Member for French expatriates in the Asia-Pacific.

-- The Minister for Trade, the Hon Dr Craig Emerson MP visited France 24-28 May 2011 to host an informal meeting of trade ministers on Doha, and to participate in the OECD Ministerial Council Meeting.

-- The former Minister for Foreign Affairs, the Hon Kevin Rudd MP, visited France 24-27 April 2011, where he represented Australia at Anzac Day commemorations in northern France, and met French Foreign Minister Alain Juppé and Finance Minister Christine Lagarde.

-- Deputy Prime Minister, the Hon Wayne Swan MP, visited France in February 2011 primarily to participate in the G20 Finance Ministers’ Meeting (Paris 19 February).

-- The Prime Minister, the Hon Julia Gillard MP, met President Sarkozy at the ASEM 8 Leaders Summit in Brussels, 4-5 October 2010.

-- The Governor-General, HE Ms Quentin Bryce AC, visited France 17-21 July 2010 to represent Australia at the dedication ceremony of the Commonwealth War Graves Commission Fromelles (Pheasant Wood) Military Cemetery.

-- The Governor-General, HE Ms Quentin Bryce AC, visited France 6 — 13 November 2008, to represent Australia at official French ceremonies commemorating the 90th anniversary of Armistice Day. She also met President Sarkozy.

Pacific engagement

France has direct strategic and economic interests in the region through its Pacific entities of New Caledonia, French Polynesia and Wallis and Futuna. France is a member of the Pacific Community (formerly the South Pacific Commission — SPC (http://www.dfat.gov.au/geo/spacific/regional_orgs/pc.html)) and the South Pacific Regional Environment Programme (SPREP (http://www.dfat.gov.au/geo/spacific/regional_orgs/sprep.html) ), and has been a dialogue partner of the Pacific Islands Forum (http://www.dfat.gov.au/geo/spacific/regional_orgs/spf.html) since 1989. France convened its third France-Oceania Summit in Noumea on 31 July 2009. Previous Summits were held in Paris (2006) and Papeete (2003).

Australia and France cooperate on Pacific issues in areas of development assistance to Pacific island countries, including through such initiatives as the joint Australia-France HIV and STI programs for Pacific Islands, announced in July 2003. Cooperation is well established in some defence areas, including disaster relief coordination under the trilateral FRANZ arrangement with New Zealand (activated in 2009 in response to the tsunamis in the Pacific), and maritime fisheries surveillance, also under trilateral arrangements with New Zealand. The latter cooperation was formalised under a joint declaration signed in Canberra in March 2006.

Defence cooperation

Australia's defence relationship with France is solid and continues to grow in terms of personal contact at high levels, frequent exchanges, single Service and Joint meetings, and major equipment procurement programs. In 2006, a new Defence Cooperation Agreement between the two countries was signed, providing a framework for further cooperation. The Agreement entered into force on 7 July 2009. Negotiations continue on a Mutual Logistics Support Arrangement (MLSA) which will facilitate our work together in coalition operations, exercises and other activities, such as regional humanitarian assistance and disaster relief. Australia and France regularly participate in combined force training exercises. Australian and French forces have co-operated in the Pacific and Southern Oceans, including for emergency and disaster relief and operations against illegal fishing.

In recent years Australia and France have developed a good working relationship in the counter-terrorism field, including as founding members of the Proliferation Security Initiative to combat the trafficking in weapons of mass destruction. France is a valuable partner in this area, with significant expertise and experience in combating and prosecuting terrorism, a system of specialist counter-terrorism judges, and global reach, including in regions where Australian knowledge is limited, e.g. North Africa.

Australia works closely with France in arms control regimes such as the Australia Group, the Comprehensive Nuclear Test Ban Treaty, Missile Technology Control Regime and the Proliferation Security Initiative, to strengthen export controls and non-proliferation norms. As the fourth largest contributor to the United Nations and a P5 Member, France's positive approach to reform of the Security Council is important. The UN Peace Building Commission and Democracy Fund are reform initiatives where Australia and France share common views and together play a leading role. The French company Thales has a major investment stake in Australian defence industries. France is currently the world's fourth largest exporter of defence materiel with a 6 per cent share of the international market.

World War commemorations

The legacy of Australian involvement on French soil in the First and Second World Wars plays an important role in the bilateral relationship. Over 45,000 Australians lost their lives on French soil in the two conflicts — more than in any other country in the world. Each year many Australians travel to the Western Front, whether through an interest in the battles of that era, to participate in commemorative activities, or to visit individual grave sites. The Government's decision in 2008 to hold an annual ANZAC Day Dawn Service at the Australian National Memorial at Villers-Bretonneux has further increased that interest. The Hon Kevin Rudd MP represented Australia at the 2011 Service (his speeches at the Villers-Bretonneux, and Bullecourt services may be found at www.foreignminister.gov.au/speeches).

Mr Rudd also awarded the 2011 Australia-France Foundation Sadlier-Stokes Scholarship to two students — from Villers-Bretonneux and Bullecourt. The Sadlier-Stokes Scholarship is awarded annually to a dedicated French student from the Somme or Nord Pas-de-Calais regions demonstrating a keen knowledge of Australia, and is aimed at assisting them to undertake tertiary studies. The scholarship commemorates the great courage of two Australian soldiers, Lieutenant Clifford Sadlier and Sergeant Charlie Stokes, during the battle to liberate Villers-Bretonneux on 24-25 April 1918. The battle is recognised as one of the Allies' greatest moments on the Western Front and a turning point in the war. The scholarship is funded by the Australia-France Foundation.

Joint commemorative activities, such as the ANZAC Day ceremony, dedication of the Commonwealth War Graves Commission Fromelles (Pheasant Wood) Military Cemetery, and the 95th anniversary of the battle of Fromelles (July 2011) continue to be important elements of our bilateral engagement as the centenary of World War I (2014-18) approaches. A Western Front interpretive trail will develop seven key sites in France and Belgium in partnership with local authorities in the lead-up to the centenary. The trail will honour the courage and sacrifice of the more than 290,000 Australians who served on the Front. The sites currently under consideration are Villers-Bretonneux, Pozieres, Bullecourt, Fromelles, Mont St Quentin (in France) and Ypres and Tyne Cot (in Belgium).

The Governor-General, HE Ms Quentin Bryce AC, represented Australia at the on 19 July 2010 dedication ceremony of the Fromelles (Pheasant Wood) Military Cemetery with HRH The Prince of Wales and HRH The Duchess of Cornwall. Their participation in the ceremony recognised the losses incurred by both Australia and the United Kingdom during the Battle of Fromelles on 19 July 1916, which saw the single biggest loss of life in Australian military history, with 5,533 casualties and 1,917 soldiers killed. The Cemetery is the final resting place for the soldiers discovered at Pheasant Wood in excavations conducted in 2008 and 2009, and is the first full cemetery that the Commission has constructed in more than 50 years.

The Governor-General's visit reinforced Australia's historic ties with France, particularly those relating to Australia's military commitment during WWI and the scale of our sacrifice. Those links are warmly remembered and commemorated, particularly in the north of France, and underpin broader French perceptions of Australia as a country with a tradition of engagement and a strong contribution to make to shared global challenges.

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BILATERAL TRADE AND INVESTMENT

Trade and investment links between Australia and France are substantial but with the balance firmly in France’s favour. France is our 17th largest merchandise trading partner overall (A$4.9 billion in 2010-11). Australia’s merchandise exports to France totalled A$1.1 billion in 2010-11, dominated by coal (A$590 million). Other major exports included aircraft and parts (A$90 million). Imports from France in the same period totalled A$3.8 billion, with major products including medicaments incl. veterinary (A$684 million), perfumery and cosmetics (A$221 million), alcoholic beverages (A$213 million). And passenger motor vehicles (A$124 million).

In 2010 Australia exported A$672 million in services to France. Services imports were valued at A$1 billion, with the bulk of exports and imports comprising personal travel services. Tourist links between the two countries are significant, with Australia receiving approximately 94,600 French visitors in 2010-11.

Total Australian investment in France in 2010 was valued at A$29.4 billion (A$419 million of which was FDI). France is the tenth largest foreign investor in Australia with a total investment of A$23.9 billion in 2010 (A$12.6 billion of which was FDI).

An important initiative to boost our trade and investment relationship with France was the establishment in 2007 of the Australian Business in Europe (ABIE) Paris Chapter's Corporate Club. The Corporate Club has a high-level membership (pitched at CEO or MD engagement) of the main Australian and French multinationals involved in the bilateral trade and investment relationship. Its launch has already paid dividends, stimulating contact and collaboration between some of the participants. The initiative has also helped strengthen the Paris chapter of ABIE by bringing a number of the major multinationals into the organisation for the first time. Recent events have included presentations by senior academics and business people on the global economic crisis, and cross cultural communication in business.

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THE ARTS

Australia and France have a dynamic relationship in all fields of the arts, with Australian artists enthusiastic to work within the French cultural tradition, and many French counterparts keen to explore Australia's vibrant culture. Institutional links are encouraged within the framework of the 1977 Australia-France Agreement on Cultural and Scientific Cooperation. The Australian Embassy in Paris administers the Australia-France Foundation, which promotes cultural and people-to-people exchanges. The Department of Foreign Affairs and Trade's Cultural Awards Scheme has also helped promote cultural relations between Australia and France.

The National Gallery of Australia presented masterpieces from the collection of the Musée d'Orsay from December 2009-April 2010. Australia was the first country to exhibit the chosen works together outside France. Australia has made a significant contribution to the Musée du Quai Branly, a major international museum dedicated to the world's indigenous arts and cultures that opened in Paris in June 2006. A permanent installation of works by eight Australian Indigenous artists commissioned by the Australian Government has been incorporated into the structure of one of the main buildings of the museum.

As part of Photoquai 2011, the Australian Embassy in Paris, in association with Magnum Photos and Stills Gallery, is presenting the exhibitions Minutes to Midnight , and Coming Soon , by Trent Parke, and Between Worlds by Polixeni Papapetrou (to 13 January 2011).

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EDUCATION AND OTHER PEOPLE-TO-PEOPLE LINKS

France is the third largest source of international students from Europe studying in Australian universities, English language colleges and vocational education and training institutes, with 4,735 enrolments in 2010. France is an important academic, research and exchange agreements partner.

An Agreement on Mutual Recognition of Qualifications(AMRQ) between France and Australia was signed on 6 October 2009 — by Universities Australia and by representatives of French universities, the French Vice-Chancellors' Committee and the French Engineering Schools Directors' Committee.

The French Company Internship Program (FCIP) — developed by the Embassy of France in Canberra — was launched on the same day. The FCIP aims to increase collaboration between France and Australia by giving Australian students an opportunity to work in France and so improve their French language skills. Ten French companies and four Australian universities are partners in the FCIP which began in January 2010. The French Embassy also offers language Assistant Scholarships (80) to Australians to work in France, and Travel Grants (20) for Australians to study in France.

During his visit to France in January 2012, Mr Rudd highlighted the positive contribution of education to the bilateral relationship at an education promotion event in Paris with his French counterpart  Alain Juppé.  He also launched the Australia-France Alumni Network (A-FAN) for French graduates of Australian institutions (administered by the Australian Embassy in Paris).

Australia and France signed a Working Holiday Maker Agreement in 2003. France is Australia's fastest growing source of working holiday makers. Around 20,000 young French citizens visit Australia each year under the scheme. The scheme encourages cross-cultural exchange and enhances interpersonal links between Australia and France.

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Last Updated: February 2012

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