Thursday 1 August 2013

Old World Order - France

Population: 66 million
Area: 641,000 km2
GDP: $2.7 trillion
GDP (per capita): $36,000
United Nations Security Council Veto: Yes

France has been at the centre of European history for over 1100 years. In Europe, the only country that's been in more wars is Austria (although largely powerless now, before the 20th century Austria dominate Central European affairs). France had a huge empire and once nearly conquered all of continental Europe bar a disastrous attempt to invade Russia in the winter. These days France is still pretty powerful, having the 6th largest military expenditure in the world and veto power on the United Nations Security Council. It also has close ties to its European neighbours. France's future, however, is not all that rosy. 

One problem France is going to experience is population growth, or lack thereof. Currently France is the 21st largest country in the world with 65 million people, but by 2050 it is expected to drop to the 25th largest. Although its population will have risen to 69 million, it will have been shrinking since 2040. One way to reverse this would be to increase the amount of immigrants to France, but the French populace doesn't like that idea much. 

Although France's finances are not in the dire state that some of its European neighbours are in, economic prospects are gloomy. Since Hollande took power last year France's economy has barely improved. France is also vulnerable because it is in the Eurozone, which means the PIIGS (Portugal, Ireland, Italy, Greece and Spain) countries' troubles are France's troubles. Its banking sector is particularly at risk from a Greek default due to the amount of money French banks have lent in Greece. Another Great Recession could hold France back for too long. 

One option France has is to move to closer ties within Europe. More fiscal policy and banking integration with Euro currency countries. This obviously has massive problems and rather glaring obstacles. To pull closer to political integration requires the other countries to do the same. There is increasing euro-scepticism in many Euro countries, particularly in the Netherlands and Finland. The problem is that fiscal integration can only happen it all countries currently using the euro agree to do this. Hollande must convince the Northern Europeans to stimulate the PIIGS economies, rather than demand austerity which simple makes the situation worse. 

Another issue facing France is the rise of the extreme right epitomised by Marine Le Pen and her party, the National Front. If we ignore the obvious historical similarities between this and the rise of Hitler following the Great Depression in 1929, this is still an issue for France. Le Pen is an isolationist, similar to Nigel Farage in the UK except more extreme, she wants out of the Eurozone, the EU and Schengen Area as well as reducing immigration by over 95%!

So France faxes three main issues; isolationism, population decline and economic turmoil in Europe. Solving the economic trouble will be difficult, but would go a long way to reducing isolationism. The population decline problem can be fixed by immigration policies that the French won't like. 

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