2015 Index of Economic Freedom

France

overall score62.5
world rank73
Rule of Law

Property Rights80.0

Freedom From Corruption71.0

Limited Government

Government Spending2.5

Fiscal Freedom47.5

Regulatory Efficiency

Business Freedom80.2

Labor Freedom43.5

Monetary Freedom77.5

Open Markets

Trade Freedom83.0

Investment Freedom70.0

Financial Freedom70.0

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Quick Facts
  • Population:
    • 63.7 million
  • GDP (PPP):
    • $2.3 trillion
    • 0.3% growth
    • 0.2% 5-year compound annual growth
    • $35,784 per capita
  • Unemployment:
    • 10.5%
  • Inflation (CPI):
    • 1.0%
  • FDI Inflow:
    • $4.9 billion
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France’s economic freedom score is 62.5, making its economy the 73rd freest in the 2015 Index. Its overall score has decreased by 1.0 point, with particularly large declines in labor freedom and the management of government spending. France is ranked 33rd out of 43 countries in the Europe region, and its overall score is higher than the world average but below the regional average.

Over the past five years, France’s economic freedom has waned as the size and reach of government have expanded. A stagnating domestic economic environment has led to persistently high unemployment, particularly among young people, and structural deficiencies have suppressed dynamic private-sector expansion. Since 2011, economic freedom in France has declined by over 2.0 points, falling in five of the 10 economic freedoms including the control of government spending, fiscal freedom, and labor freedom.

However, with such institutional strengths as strong protection of property rights and a relatively efficient legal framework, the French economy is diversified and modern. The entrepreneurial environment is generally facilitated by a sophisticated and relatively resilient financial sector. The government has pursued reform measures to increase the economy’s competitiveness and flexibility, but progress has been slow and patchy.

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Background

François Hollande was elected president in May 2012, and his Socialist Party has majority control of the National Assembly. Hollande’s poor handling of the economy has led to low approval ratings. French voters punished the mainstream parties in the 2014 European Parliament elections, which resulted in the far-right National Front taking the most seats. Formally reintegrated into NATO’s military command structures, France was a leading participant in NATO’s March 2011 military engagement in Libya and recently sent troops to Mali and the Central African Republic to counter advancing Islamic militants. The economy is diversified but also is the top recipient of market-distorting agricultural subsidies under the European Union’s Common Agricultural Policy.

Rule of LawView Methodology

Property Rights 80.0 Create a Graph using this measurement

Freedom From Corruption 71.0 Create a Graph using this measurement

France has an independent judiciary, and the rule of law is firmly established. In 2014, however, former President Nicolas Sarkozy was detained for questioning about long-running accusations of corruption. Property rights and contract enforcement are secure, but complex and inefficient regulations help to make property in France among the most expensive in the world, despite weak demand and slowing construction activity.

Limited GovernmentView Methodology

France’s top individual income tax rate is 45 percent, and its top corporate tax rate is 34.3 percent. Other taxes include a value-added tax and a tax on inheritance. Overall tax revenue equals about 45.3 percent of domestic income, and government spending equals 57.0 percent of gross domestic product. Public debt is close to 94 percent of annual domestic output.

Regulatory EfficiencyView Methodology

With no minimum capital requirement for launching a firm, business start-up is straightforward. Completing licensing requirements takes over three months on average. The rigid labor market lacks the capacity to generate more vibrant employment growth. Price controls affect many products and services, and state subsidies to increase renewable energy capacity threaten the competitiveness of the French power industry.

Open MarketsView Methodology

EU members have a 1.0 percent average tariff rate. France protects its film industry from competition and imposes quotas on the broadcast of foreign television shows and music. The government screens foreign investment in some sectors. The competitive financial sector, dominated by banks, stable, and open to competition, offers a wide range of services. Foreign financial firms have gained considerable market share.

Country's Score Over Time

Bar Graph of France Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing France to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Switzerland80.5-1.1
2Estonia76.80.9
3Ireland76.60.4
4Denmark76.30.2
5United Kingdom75.80.9
6Lithuania74.71.7
7Germany73.80.4
8The Netherlands73.7-0.5
9Finland73.40.0
10Luxembourg73.2-1.0
11Georgia730.4
12Sweden72.7-0.4
13Czech Republic72.50.3
14Iceland72-0.4
15Norway71.80.9
16Austria71.2-1.2
17Latvia69.71.0
18Belgium68.8-1.1
19Poland68.61.6
20Cyprus67.90.3
21Spain67.60.4
22Slovakia67.20.8
23Armenia67.1-1.8
24Macedonia67.1-1.5
25Hungary 66.8-0.2
26Bulgaria66.81.1
27Romania66.61.1
28Malta66.50.1
29Albania65.7-1.2
30Portugal65.31.8
31Montenegro64.71.1
32Turkey63.2-1.7
33France62.5-1.0
34Italy61.70.8
35Croatia61.51.1
36Slovenia60.3-2.4
37Serbia 600.6
38Bosnia and Herzegovina590.6
39Moldova57.50.2
40Greece54-1.7
41Russia52.10.2
42Belarus49.8-0.3
43Ukraine46.9-2.4
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