Kevin Hargrove, Huajun Lu, Peter Mayman, Linyi Shi, Bao Yunyue
12-1-2015
Fall 2015 Semester Paper
France
ACIS 5034 Global Issues in Accounting and Information Systems
Table of Contents
History………………………………………………………………………….………………….2
Culture………………………………………………………………………….………………….6
Political / Legal System……………………………………….……………………………....…..8
Predominant Business / Economic Model……………………………………………………….11
France’s Interaction with Marber’s Globalization Dimensions………………………………….13
Accounting System Comparison with US GAAP and IFRS…………………………………….21
Accounting System Comparison with the Culturally Expected Accounting System……………30
France’s Relationship with the US………………………………………………………………38
Works Cited……………………………………………………………………………………...45
1
History
France is a country with an interesting and extensive history that dates back to Ancient
history. Originally, France acted as a point of travel and trade, and eventually invasion. Greek
and Phoenician traders started to inhabit the French Mediterranean coast. Meanwhile, Celts settled
in the territory that the Romans called Gaul (History of France). Around 58 B.C., Julius Caesar
fully conquered Gaul where it remained Roman territory until the Crisis of the Third Century
(Third Century Crisis of the Roman Empire). Later, Christianity emerged in the 1st century and
Christians were persecuted (A Brief History of France). In the 3rd century, the Roman Empire
faced decline after epidemics and inflation became major issues. Eventually, the Roman Empire
crumbled and independent kingdoms formed. In the 5th century, the Franks invaded and ruled the
Empire under a ruler named Clovis who converted the region’s religion to Christianity which
allowed the Franks and Romano-Gallics to merge (A Brief History of France). Clovis later issued
Salic law and made Paris the capital. After Clovis’ death, things were rather stagnant and power
was lost over territories including Provence and Burgundy. Power struggles continued until
Charlemagne, the Frankish King, became the Holy Roman Emperor. In an effort to keep support
of the church he formed monasteries and gave away land to them. After Charlemagne’s death in
814, the Frankish realm was divided among his three grandsons. Charles the Bald ruled the
western part, which included current day France, between 838 and 877, which evolved into France
over time (A Brief History of France).
During the 9th and 10th centuries, France was raided by
Vikings that settled in Normandy. This leads to regions of France in the south becoming
fragmented and independent. However, in 911, Charles the Simple made a treaty with the Viking
Chief so he would pledge his loyalty and convert to Christianity. Later Hugh Capet founded the
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Capetian dynasty in 987, but the French kings did not have much power because the king of
England controlled territories in France (A Brief History of France).
Growing tensions between France and England led to the Hundred Years’ War lasting from
1337 to 1453. During this time, the bubonic plague, called the Black Death, infected France and
killed nearly one-third of the inhabitants (History of France). France came out victorious and
gained its territories back, including the Valois dynasty’s holdings (History of France). With the
marriage of Charles VIII and Anne Duchess of Brittany in 1491, France became a centralized
power (A Brief History of France). Later, after the 1540s, John Calvin’s Protestantism spread
through France resulting in civil wars (History of France). Catholicism was sustained in France
but religious tolerance was initiated by Henry IV. France was later at an all-time high under the
reign of Louis XIV when there was absolute monarchy. This was when the Palace of Versailles
was built to celebrate art and architecture in France (History of France).
With the establishment of a strong, centralized kingdom, France was faced with major
financial problems in the 18th century when Louis XIV and his successors took on large projects
and military campaigns that were extremely expensive (History of France). The major expenses
were covered by taxes, which nobility and clergy were exempt against causing resentment. These
issues led to the French Revolution lasted between 1789 and 1799. The French Revolution led to
the demise of absolute monarchial rule and brought equality.
During this time, France
experimented with its government where committees were given power which led to the Reign of
Terror. During this time, anyone could be arrested and executed if they were supposedly revealed
to be supporters of tyranny or federalism, resulting in 16,000 executions (A Brief History of
France). A major player during the French Revolution was Napoleon Bonaparte, who promised
restoration of France. The people of France believed in Napoleon and made him consul for life,
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giving him real power, leading to Napoleon crowning himself as emperor in 1804 (A Brief History
of France). One of the main feats of Napoleon was preserving equality, however, he also
introduced censorship, imprisonment without trial, slavery, and he created a bureaucracy (A Brief
History of France). Eventually, he faced defeat and was replaced by Louis XVIII who allowed
France to have a constitution which became quite liberal under the reign of Louis-Philippe. Later,
the Industrial Revolution inspired many changes in France, but there were still many problems
including economic instability and discontent which ultimately led to Louis-Philippe’s abdication
(A Brief History of France). In 1848, a new constitution was published allowing all men to vote
for a single elected assembly and a president. Louis Napoleon became the newly elected president,
who changed the constitution and made himself Emperor Napoleon III (A Brief History of France).
Under the rule of Napoleon III, Paris was rebuilt and improved which created jobs, railways
were built, and banks were founded. Additionally, he supported liberalization by reducing
censorship and restrictions on the public (A Brief History of France).
Napoleon was an
impressive military strategist, extending his rule and culture over majority of Europe, but his rule
was ended after facing defeat in the Franco-Prussian War in 1870 (History of France). After this,
Paris surrendered in 1871 which led to a National Assembly taking control of the Government
which was countered by Parisians who rebelled and formed their own municipal government (A
Brief History of France). These governmental power struggles ended with the National Assembly
establishing the Third Republic in 1875 which flourished until the First World War (History of
France). World War I left France with over one million dead, destroyed buildings, and a damaged
economy with a government largely in debt. In 1939, France declared war against Germany which
was the catalyst in the Second World War. Early in the war, France faced defeat against Nazi
Germany in Paris which led to France being divided into the occupied north and unoccupied south
4
controlled by Germany (History of France). During this time, France’s resources were plundered
by Germans, including forcing Frenchmen to work in Germany.
This led to the formation of
resistance groups in France and Charles De Gaulle leading French forces in England (A Brief
History of France). Eventually, allies liberated France in 1944 and a new constitution was created
in 1947 leading to the establishment of the Fourth Republic. During this time, France joined the
North Atlantic Treaty Organization and created the pillars of the European Union. Struggles with
France’s colonies brewed and civil war was potentially about to erupt. To counteract any civil
war, the National Assembly gave Charles De Gaulle power, resulting in the Fifth Republic.
During the Fifth Republic in France, the presidency was strengthened and legislative power
was reduced through de Gaulle’s revised constitution (History of France). Over de Gaulle’s
presidency, many of France’s empire gained independence but remained interlinked with France
through its economic and cultural ties. De Gaulle resigned in 1969 and was replaced by Georges
Pompidou who supported policies that were conservative but focused on the economy. In 1981,
Francois Mitterrand was elected president. Mitterand was a socialist who made improvements,
including strengthening Franco-German relations and the 1992 Treaty of Maastricht, establishing
a common currency and the creation of the European Union (History of France).
5
Culture
France, being the most visited destination in the world, is home to a rich and vibrant culture. Using
Geert Hofstede’s cultural framework, one can observe the different dimensions and how they
interact to have a broad understanding of France’s culture.
The Power Distance Index describes the extent to which less powerful members of society
accept and expect power to be distributed unequally. The main idea behind this dimension is to
understand how a society handles inequality among people.
Additionally, it suggests that
followers of these beliefs are inadvertently supporting the inequalities among society (The
Hofstede Centre). France has a moderately high score of 68.
This suggests children are
emotionally dependent on their parents that transfer to authoritative figures in their lives. Thus,
inequality is accepted and power is centralized to some degree.
Individualism versus Collectivism expresses the degree to which people in a society are
integrated into groups (The Hofstede Centre). In an individualistic society, there are loose ties
between individuals and there is a more independent mindset than in a collectivist society, where
people are largely intertwined into groups that extend beyond family and have a strong sense of
loyalty.
France’s score of 71 means it has an individualist society where individuals are
emotionally independent and focus on taking care of themselves and their family. Having a high
Individualism score and a high Power Distance score is quite unique. For example, the French are
respectful to their bosses because they are more emotionally dependent on their superiors, but they
may not do what they promise because they believe they know better based on their individualism.
The next cultural dimension is Masculinity versus Femininity where a masculine society
prefers achievement, heroism, assertiveness, competition, and material rewards for success. On
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the other hand, a feminine society prefers cooperation, modesty, caring for the weak and quality
of life (The Hofstede Centre). Overall, the main issue being addressed in this dimension is
understanding what motivates people in society – being the best or enjoying one’s self. A score
of 43 means France has more of a feminine culture. This can be demonstrated by their 35 hour
work weeks, earlier retirement age, and their focus on quality of life. Yet another unique factor
about France is the upper class scores Feminine and the lower class scores Masculine.
It is fact that the future can never be known, but different cultures deal with this knowledge
in different ways. Uncertainty Avoidance deals with how members of a culture feel threatened by
ambiguities and have thus created beliefs and institutions that try to avoid the unknown (The
Hofstede Centre). France scored quite high with an 86. This is reflected by how the French require
all necessary information, structure, and planning.
Long-Term versus Short-Term Orientation deals with how societies maintain links to its
past while also addressing challenges of the present and future (The Hofstede Centre). With a
fairly high score of 63, meaning the society has a pragmatic orientation. Thus, the French have a
situational point of view where the truth is dependent on the conditions at that time. Additionally,
they adapt traditions easily, and have an inert frugality and perseverance.
The last cultural dimension is Indulgence, which is the extent to which people try to control
their inhibitions, which is often based on how individuals in a society are raised (The Hofstede
Centre). France is pretty much in the middle with a score of 48. Thus, people in France are less
relaxed and may not enjoy life as much as more indulgent countries.
7
Political / Legal System
The most recent constitution established in 1958 describes the political structure of the
Fifth Republic of France (What Is France’s Political Structure). In France, the President is elected
for five and cannot serve more than two consecutive terms. Originally, the President was elected
for seven years and there was no limit on the number of terms he or she could serve. In order to
be a candidate for the Presidency, one must receive 500 sponsoring signatures of elected officials
from a minimum of 30 departments or oversea territories (French Political System). If any
candidate receives over 50% of the vote in the first round of elections, he or she wins the
Presidency. Otherwise, the top two candidates in the first round go head to head in a second
election. President Nicolas Sarkozy was recently beaten and replaced by Francois Hollande in the
2012 election. The President, who is the chief of state, has the power of controlling national
security and foreign policy (What Is France’s Political Structure). The President’s duties also
include chairing the Council of Ministers, negotiating foreign treaties, and appointing members of
the Constitutional Court and the highest appellate court (French Political System). Additionally,
with the approval of parliament through nomination by the majority party in the National
Assembly, the President appoints a prime minister. The Prime Minister, who is the head of
government and head of the Council of Ministers, controls domestic policy and oversees day-today affairs. Prime Ministers do not have directly defined terms but they have to maintain support
from the National Assembly (The World Factbook). One of the Prime Minister’s duties is to
recommend Ministers to the President in addition to delegating their duties and responsibilities. A
small group of these Ministers comprise the Council of Ministers, which is chaired by the President
and led by the Prime Minister. The Council of Ministers is a small but powerful body that exercises
8
executive power over the policy of the nation. These ministers, the Prime Minister, and the
President together make up the executive branch.
The legislative branch is made up of The National Assembly and The Senate. The National
Assembly is the lower house of French Parliament. There are 577 seats for delegates that are
elected through a two-round vote similar to that of the Presidency, and members’ terms are also
five years. The National Assembly specializes in the day-to-day operations of the government
(French Political System). If there are disagreements with the Senate, the National Assembly
triumphs. They also have the power to overthrow the executive government, including the Prime
Minister. The Senate is the upper house of French Parliament which is presided over by the
President and is comprised of 348 seats. Compared to the National Assembly, the Senate is less
prominent and members are indirectly elected by elected officials for a six year term, with half of
the seats up for election every three years (French Political System). A President is elected among
the Senate members. The Senate focuses on constitutional matters and foreign affairs, which
includes European integration.
The last group in France’s government is the Judiciary. A Civil legal system is used in
France, where law stems from statutes and judges have the duty to interpret the law as opposed to
making the law (The French Legal System). The rule of law got its principles from the Napoleonic
Code and the decisions of higher courts are superior to lower courts. The multiple courts in France
are split into a Judicial branch, which hears civil and criminal cases, and an Administrative branch,
where cases involve disputes over government regulations. The Judicial branch is split up in
varying degrees, including District courts, Criminal courts, and the Court of Cassation, which is
the highest court in the judicial system (The French Legal System). The Administrative branch
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has 35 courts with nearly 600 magistrates that settle around 100,000 cases a year, and the highest
jurisdiction of the administrative branch is the Council of State (The French Legal System).
France has multiple political parties that are very fractional and often have changes in
allegiances. The most recent Presidential election in 2012 had over 10 different parties (Parties
and Elections in Europe). The two opposing groups include the Left-wings and Right-wings. The
Left-wing group is led by the French Socialist Party and has minor partners like Europe Ecology
– The Greens, the Left Party, and the Radical Party of the Left (French Political System). On the
other hand, the Right-wing group is led by The Republicans and the Union for French Democracy,
and has support from the European Social Liberal Party.
10
Predominant Business/Economic Model
Although France was not as heavily hit as other countries after the recent economic
downturn, it has struggled to bounce back. The recent Sarkozy Presidency attempted to undertake
reform that failed due to the unpopularity stemming from the negative effects it had on a lot of
people and the failure to address the real issues at hand. The main problems include the high level
of taxes, the high level of unemployment, and the fact that France cannot compete in the
international market (Outline of the French Economy). France’s current President, Francois
Holland, has continued to insist that their economy is going to improve, but most are cautiously
skeptical. France’s economy is in a large amount of debt, which is over 2.2 trillion Euro (France
National Debt Clock). On the other hand, productivity is still high in France with their economy
ranking 9th in terms of GDP at PPP rates. France has 31 corporations of the 500 biggest companies
of the world, which ranks them at 4th in the Fortune Global 500 (Global 500). Additionally, France
was the 2nd largest trading nation in Europe before the recent economic downturn, and is the 9th
largest trading partner with the U.S.
Following World War II, the economy in France has developed into a modern industrial
economy that has successful corporations and business leaders (Outline of the French Economy).
Presently, the French economy is extremely competitive in many sectors with companies that
operate internationally. For example, France is the number one country in nuclear energy, with
EDF being the world’s largest utility company. Additionally, France is the most visited destination
in the world which accounts for a lot of their revenue. There are plenty of operations outside of
France, proving they can compete in the global market. Specifically, France runs some of London’s
big red buses as well as train and bus services across Europe (Outline of the French Economy).
They also run supermarkets in four continents, and produce daily essentials like pharmaceuticals.
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France’s labor market has been scrutinized, but there are certainly some feats of their
workforce in addition to their weaknesses. First, their labor force has some of the highest levels
of graduates in Europe with a lot of graduates studying science. Although some describe the
French labor force as lazy, they are as productive as U.S. workers. However, France certainly has
issues with their labor market. Le Point, a French magazine, had an article titled “Are the French
Lazy?” in 2013 that pointed out how France is not doing all they can to improve their economy
(Are the French Lazy). The article demonstrated how French citizens work shorter hours, retire
earlier, and take more holidays than most other countries. Additionally, employment rates,
particularly with younger generations, are quite low.
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France’s Interaction with Marber’s Globalization Dimensions
Trade and Finance:
France ranks sixth in the world’s largest economy according to nominal figures and ranks
ninth according to the Purchasing Power Parity (PPP) figures. It is also ranks the third largest
economy in Europe after Germany and United Kingdom. France develops its manufacturing
activities and contributes to its economic growth largely on its well-developed chemical industry.
Another major component of the French economy is its tourism industry. It is a popular tourist
attraction in the world. France’s economy came into a period of recession before 2010 and remains
in a period of stagnation (“France: Trade Statistics”).
From an imports and exports point of view, France is the world's 5th largest importer and
7th largest exporter and ranked 13th in “most complex economy” according to the Economic
Complexity Index (ECI) in 2013. This country mainly exports planes, helicopters, spacecraft and
such. The country’s most recent imports are led by Crude Petroleum, which represented 6.20% of
total imports of France. The second largest imports is from Refined Petroleum. From a long-term
point view, France’s imports are always more than exports in trade balance since around 2003 (ED
WORLD ECONOMY TEAM).
Most of France’s exporters are to other European members such as German. However, in
recent years, France’s sales to Africa and Asia continued to increase outside the EU. The country's
top three partners in 2014 are Germany, Italy and Belgium and top three importers are Germany,
China and Belgium in 2014 (ED WORLD ECONOMY TEAM).
Foreign Direct Investment in France has been steadily going up since 1990. The FDIs in
France take the form of both acquisition of existing companies or start-up of new companies. This
has created over 30000 new working positions in 1999. This new trend is mostly owing to the
13
efforts of French government which is trying to make France more appealing to foreign investors
(ED WORLD ECONOMY TEAM).
Energy:
France’ electricity is generated and distributed mainly by Electricite de France (EDF). This
company provide around 22% of European Union’s total electricity and its electricity mainly come
from nuclear power. France exports the largest amount of electricity because the cost of generation
is very low and they can gain more than three billion Euros from importing electricity every year
("World Nuclear Association”).
Due to the decline in price of solar panels, France was a key driver of solar energy together
with Italy. In July this year, the French Parliament also passed an energy and climate law that
requires 40% of national electricity production to come from renewable sources by the time of
2040. Nowadays, around 20% of the country’ electricity was generated by renewable energy.
Although France had a long history with nuclear power since Henri Becquerel’s discovery
of natural radioactivity in the 1890s and many other French nuclear scientist. However, in 2015
France’s National Assembly voted that only half of the energy in France will be produced by
nuclear plants by the time of 2025 and France is also upgrading the protections on nuclear reactors
in prevent of natural disasters and other unsafe factors ("World Nuclear Association”).
French companies invested more in foreign countries more over the recent years. The main
reason for this is the emerging new economies all around the world. Also, a large portion of French
capital was invested in the European Union and the United States.
About the recent energy policies in France, the parliament reaffirmed three main energy policies
to be used in the future, including the security of supply perspective, respect for the environment
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perspective (especially the emission of greenhouse gases) and proper radioactive waste dispose
perspective. In 2003, in response to the strong demand of French people, France issued the first
national energy debate. Vast majority of people been think that environment protection is the most
important energy policy goal according to a poor conducted. In October 2014, an Energy
Transaction for Green Growth bill went on to the senate. In early 2015, the senate amended the
bill to get the nuclear cap away, however, this amendment was not accepted by the lower house
("World Nuclear Association”).
Defense and Security:
French immigrants are required to blend into the French culture instead of keeping their
traditional norms. This partly led to the social unrest of France. Radicals take their chance to hit
this nation in their weak spots ("French Government: White Paper on Defense and National
Security”).
The 2013 reform paper of the 2008 French White Paper on Defense and National Security
cut back on the personnel and budget in national security. Also, numbers of ship, helicopters and
tanks were reduced as well. Also according to an earlier versions of White Paper of Security which
was published in 2008, this white paper defines France’s defense and national security strategy in
the following fifteen years, which was until the year 2023. This version of white paper includes
both domestic security and security to foreign countries. Also, it clarified the military tools used.
Tis policy deals with both active and deliberate threats by human beings and all natural disasters
and catastrophes. Despite this, the 2013 reform paper to this paper still indicated that the
government was going to freeze the budget and cut back on personnel and equipment used for
national security("French Government: White Paper on Defense and National Security”).
15
As part of the western world, France suffer from terrorist attack as well. On November 13,
2015, Paris was attacked by ISIS. Before the terrorist attack in Paris, France’s defense budget was
used on three space programs. However, after the attack, the French President Francois Hollande
said that their first priority is to spend budget on intelligence and surveillance. Also, France is
seeking talks with fellow members of European Union to request help in defense and security
under the European Union treaty for the first time. The terrorist attack not only jeopardized the
safety of people’s life and made France enter into the state of emergency for national security, but
also harmed business as well. The most obvious one is that the tourist industry took a hit and
related businesses are all experiencing a falloff in sales ("Paris Terror Attacks - CNN.com.")
The French government uses most of the output of French weapon manufacturers’ output.
Also, large amounts of arms are also exported to countries such as United Arab Emirates, Brazil,
Greece and many other countries ("World Nuclear Association”).
Immigration:
A wave after another immigrants started to blend into French culture starting 18th century.
France’s population dynamics began to change around 1850s because of the Industrial Revolution.
After World War II, a large numbers of employees from French colony came due to the lack of
workers. French immigration increased sharply during the period 1945 to 1974 and that is the time
during which the Muslim population in French increased sharply. That is also the period that many
refugees from Eastern Europe came to take shelter from the dictatorship in their home country.
During 1970s, this is the period of time that French allowed a lot of immigrants from the Muslim
World to settle in permanently in order to fight the economic crisis.
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Also, immigrants are expected to adhere to the French culture instead of keeping their own
traditional values. This led to the tensions and civil unrest between local people and radicalized
newcomers. Just yesterday, France confirmed that it will take 30000 refugees from Syria due to
the unrest political situation in that country. According to the latest census numbers, the total
number of immigrants in France is around 5.5 million people and it consists of around 8.5 percent
of its total population. Those immigrants come from Europe (38,4%), Northern Africa (30,4%),
Asia (13,4%), Western Africa (12,8%), Americas-Oceania (3,9%). Also, the illegal immigrant
population is around 3000,000 and mostly from western Africa ("Some Truths about Immigration
in France").
Health:
France use a universal health care system which is largely financed by government national
health insurance. The World Health Organization found France offer the “closest to best overall
health care” in 2000. Of all the health expenditures, 77 percent are funded by the government
agencies. Even though those physicians are in private practices, they still draw their income from
public insurance funds. The French government take on two major responsibilities in this universal
health care system. The first responsibility is to fix the medical expenses rate and the second is to
oversee the medical insurance funds. People in French do not need to be worried about their
medical bill and patients have an extraordinary degree of choice among providers (Rodwin).
Around 62 percent of hospital capacity in French is owned and managed by public. The
remaining percentage are split by nonprofit hospitals and for profit hospitals. The medical
professionals earn only about sixty percent of money that doctors in the United States earns. The
17
reasons are that the malpractice insurance in France is not as expensive in France and the tuition
are less costly for going to medical school (Rodwin).
As a result of the universal health system in France, the life expectancy of people in France
is long: women with a life expectancy of almost 84 years old and men almost 76 years old.
Cardiovascular diseases cause 27% of deaths and cancer is responsible for 10-15% death. The high
death rate of cardiovascular diseases is partly because of the obesity problems in France.
Although French people are among the thinner ones in European, obesity has been one of
the major health issues of French people in recent years ("The French Healthcare System").
From psychological point of view, the overall nation mood of France is not very good in recent
years. People in France are much more pessimistic that people in other European countries
according to a public opinion analysis by European Commission conducted in 2007 ("The French
Healthcare System").
Environment:
Water pollution and air pollution are serious problems in France due to industrial
contaminants and waste disposals from the city. France had the world’s eleventh highest level of
industrial carbon dioxide emissions in 1992. However, significant progress in reducing airborne
emissions such as charging aircraft landing fees. Also, twenty percent of forests in France was
damaged due to the acid rain and other kinds of pollution by the time of 1994. Also, the acid rain
problem was growing worse nowadays mainly because of air pollution from industrial activities
and emissions from vehicles ("France Environment - Current Issues"). However, France still emits
the least carbon dioxide among the seven top industrialized countries over the world
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("Encyclopedia of the Nation's - Information about Countries of the World, United Nations, and
World Leaders").
However, France is good at protecting land area. For example; by the time of 2001, 13.5%
of France’s total land area was protected by the form of national and regional parks. Also, France
is also putting a lot of efforts into protecting endangered species from extinct. 25 percent of all
species that once lived in France became distinct by the time of 1985.
France is also leading in agricultural among all the countries in the world because they
devote more land to agriculture industry than any other countries in Western Europe. Also, France
exports the largest amount of agriculture in Western Europe. Those products include wine, beef,
wheat, and fresh fruit and so on. Those products are of a lot of diversity and is partly owing to the
favorable weather and natural environment. The moderate weather in French determined that they
have mild temperature and amplified rains. Also, the soil in France are fertile and allow plants to
grow with plenty of nutrition ("Encyclopedia of the Nation's - Information about Countries of the
World, United Nations, and World Leaders").
Poverty:
Poverty affected 15% of the total population of France at around 1970s during the time of
financial crisis. However, over the 40 years, the rate of poverty has dropped more than 60%. Before
1980s, most of the poor were retirees. However, the situations changed in 1980s since the
unemployment rate among young people increased largely ("France's Growing Poor: Where Do
They Live?").
France set its poverty threshold to be 645 Euros per month for per person in 2005.
Nowadays, there are still around 3 million French children living under the poverty line, which is
19
a wake-up call for the French government. Also, French population under the poverty line are
growing year by year in recent years according to investigation. From year 2000 to year 2003, the
percentage of poverty had the trend of minor dropping. However, percentage of people below the
poverty line began to grow more rapidly since 2004 and the percentage of people under the poverty
line became near 8 percent at 2001. This indicates that France is growing poor and according to
the data in 20014, France was facing its highest poverty since 1997 and its unemployment has
reached the lowest level in record. Also, cities and towns with huge immigrant populations seems
poorer than the rest of the area in France, those areas are especially clustered in Southern part of
France. High living expenses in housing is a main reason for poverty in those areas. The western
part of France is richer because that they have more support services for people who were living
in poverty and those areas also have a healthier economy ("Three Million French Children Living
in Poverty").
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Accounting System Comparison with US GAAP and IFRS
Accounting system of France:
France uses French GAAP -- French generally accepted accounting principles, which is
also called Plan Comptable General (PCG). French GAAP is defined by the regulation 99-03 from
the Committee of the Accountancy Regulation (Comité de la Réglementation Comptable, abbr.
CRC), validated by the Minister of the Budget.
French GAAP Compared to US GAAP:
For deferred tax, according to French GAAP, it is not recognized on the fair valuation of
unamortized intangible assets acquired in a business combination if they cannot be sold separately.
Deferred tax is not recognized for temporary differences arising from hyperinflation adjustments.
The balance is required to be discounted if the timing of the reversal of the temporary differences
can be estimated to be reliable. With US GAAP, deferred tax is calculated based on the cumulative
GAAP expense recognition method and trued up or down upon realization of the tax benefit. If the
tax benefit exceeds the deferred tax asset, the excess (windfall benefit) is credited directly to
shareholders equity. Any shortfall of the tax benefit below the deferred tax asset is charged to
shareholders equity to the extent of prior windfall benefits, and to tax expense thereafter.
Moreover, extraordinary and exceptional items are another difference between French
GAAP and US GAAP. In French GAAP there are no extraordinary items. Instead, it is required
to be disclosed separately from ordinary activities on the face of the income statement. While
under US GAAP, restricted items are both unusual and infrequent.
As for discontinuing operations, no rules were written for this part for France GAAP, but
under US GAAP, discontinued operations classification is for components held for sale or disposed
21
of, provided that there will not be significant continuing cash flows or involvement with the
disposed component. When it comes to interim financial reporting, the recognition and
measurement rules are totally the same for annual financial statements under French GAAP.
However, it is different under US GAAP because each interim period is viewed as an integral part
of an annual period and certain costs that benefit more than one interim period may be allocated
among those periods, resulting in deferral or accrual of certain costs.
Consolidation rules are also different. Under French GAAP, de facto control is the basis of
control with no guidance on potential voting rights. At least one share in a controlled entity is
required to hold for consolidation. A subsidiary held exclusively for subsequent disposal does not
needs to be consolidated. Subsidiaries excluded from consolidation are treated as long-term
investments. A subsidiary’s financial statements can be used for consolidation in the circumstances
that the year-end is not more than three months before that of the parent. As for US GAAP, it
focuses a lot on controlling financial interests. All entities are first evaluated as potential VIEs. If
it is a VIE, it needs to follow the applicable guidance in ASC 810. If not, it evaluated to be
controlled by voting rights. Potential voting rights are generally not included in either evaluation.
As for investments in associates and joint ventures, France has no guidance on potential
voting rights. When held exclusively for subsequent disposal, an investee will be treated as a longterm investment. Jointly controlled entities are required to be proportionately consolidated.
Attributable goodwill is considered to be separate from the investment in an associate, but equity
method of accounting is used in the States. Besides, proportionate consolidation may be permitted
in limited circumstances to account for interests in unincorporated entities in certain industries
where it is an established practice (i.e., in the construction and extractive industries).
22
Recognition of revenue is also different in some aspects. France is more focused on the
legal form of a contract to decide when to recognize revenue. As for long-term contracts, the
percentage-of-completion method can be used, but little guidance was written for revenue
recognition. Under US GAAP, percentage-of-completion method is used for construction contracts
under some circumstances. Otherwise, the completed contract method will be used.
Moreover, provisions have a little difference between the two. France has no requirement
to discount provisions but provisions for major repairs and maintenance needs to be recognized.
In the US, only when the amount of the liability and the timing of the payments are fixed or reliably
determinable, or when the obligation is a fair value obligation, the provisions will be discounted.
For example, an asset retirement obligation under ASC 410-20, the discount rate to be used is
dependent upon the nature of the provision, and may be different from that used under IFRS.
However, when a provision is measured at fair value, the time value of money and the risks specific
to the liability will take into consideration.
In addition, financial instruments are also different. In France, generally only permanent
impairments are recognized. A liability may be derecognized on the basis of in-substance debt
defeasance. A financial asset is derecognized only when legal title is transferred. Straight-line basis
is used when liability discount or premium is amortized. The issuer financial instruments may be
classified on the basis of their legal form. Compound instruments are not split-accounted, but under
the US GAAP, compound financial instruments are not split into debt and equity components
unless certain conditions are met, but they may be bifurcated into debt and derivative components,
with the derivative component subject to fair value accounting. Finally, when it comes to
impairment, an impairment loss is recognized in the form of additional depreciation when an asset
net realizable value is lower than its net book value under French GAAP. While under US GAAP,
23
the exceeding amount of carrying value over its fair value will be calculated in accordance with
ASC 820.
There are several differences between IFRS and French GAAP. First of all, the form and
elements of financial statements are different. Under French GAAP, no statement of recognized
gains and losses is required. The statements of changes in equity and cash flows need not to be
presented as primary statements, but they are both required under the IFRS. Moreover, the
statement of cash flows is reconciled to cash and cash equivalents and dividends paid may be
classified as operating or as financing under IFRS while it must be classified as financing under
French GAAP. Besides, cash flow statement may be reconciled to net indebtedness rather than to
cash.
Basis of accounting varies as well. The IASB uses a conceptual framework to help drafting
IFRS but there is no documented conceptual framework for French GAAP. Many items in the
financial statements are revalued, on either an optional or compulsory basis under IFRS, but the
financial statements generally are prepared on a historical cost basis under French GAAP. As for
currency, if an enterprise’s measurement of currency is hyperinflationary, it is required to make
current purchasing power adjustments according to IFRS. On the other hand, according to French
GAAP, financial statements of foreign entities in hyperinflationary economies may be measured
as if their functional currency were their parent’s reporting currency. French GAAP is more
flexible compared to the IFRS in this respective.
Consolidation also varies. Under the IFRS, consolidation is based on the power to control,
including a consideration of potential voting rights. But de facto control is the basis of control
under French GAAP, and there is no guidance on potential voting rights. Moreover, under the
IFRS, the parent need not to hold any shares in a subsidiary. A subsidiary is not consolidated if it
24
is acquired and held exclusively for disposal in the near future. Subsidiaries excluded from
consolidation are treated as financial assets. But in France, at least one share in a controlled entity
must be held in order to consolidate it. A subsidiary held exclusively for subsequent disposal is
not consolidated. Subsidiaries excluded from consolidation are treated as long-term investments.
As for business combinations, payments made by the acquirer under a guarantee of the
value of the consideration do not increase the cost of acquisition under IFRS but it increase the
cost of acquisition under French GAAP. All acquired identifiable intangibles and goodwill are
capitalized at fair value and amortized. Acquired in-process research is not capitalized under IFRS
while Identifiable assets and liabilities are valued at entry value under French GAAP, which is
different from fair value under IFRS. Acquired in-process development is capitalized if certain
criteria are met. Costs of restructuring the acquire are capitalized if the main features of the plan
are announced by the date of acquisition and a detailed plan is finalized by the earlier of three
months or when the financial statements are authorized. Under French GAAP, acquired in-process
research must be, and acquired in-process development may be, capitalized and written off in the
income statement immediately after the acquisition. IFRS is stricter than the French GAAP as for
the rules for recognizing restructuring provisions. Negative goodwill is recognized in the income
statement, first to match any identified expected costs, and then over the lives of the acquired
depreciable assets. There is different way to deal with negative goodwill under French GAAP, in
which goodwill is offset first against any positive valuation differences; any remaining amount is
capitalized and recognized in income over a period of time. In successive share purchases, assets
and liabilities acquired in previous transactions need not be revalued under IFRS but successive
share purchases up to the point of obtaining control, assets and liabilities acquired in previous
transactions must be revalued under French GAAP. In a uniting of interests comparatives are
25
restated. There is no guidance on accounting for transactions between enterprises under common
control, and practice varies according to the IFRS rule, different from French GAAP in which
there is no requirement to restate comparatives in a uniting of interests. Transactions between
enterprises under common control are dealt with the same way as other business combinations. As
for foreign currency translation, an enterprise may select a presentation currency different from its
measurement currency. All gains on foreign currency transactions needs to be recognized
immediately based on the IFRS rules, but under French GAAP, financial statements must be
presented in the enterprise’s functional currency. Unrealized gains on foreign currency
transactions may be deferred.
For those events after the balance sheet date, based on the going-concern assumption, IFRS
rules require that financial statements to be adjusted if a post balance sheet event indicated that the
going concern basis is not appropriate. But under French GAAP, the financial statements are not
adjusted for a post balance sheet event that indicates that the going concern principle is no longer
appropriate. Moreover, specific balance sheet format is not required according to IFRS, but a
standard chart of accounts generally is used under French GAAP. A refinancing after the balance
sheet date may affect the classification of a liability at the balance sheet date. Financial assets and
liabilities are offset if certain criteria are met which is totally different from French GAAP under
which financial assets and liabilities cannot be offset. Also, extraordinary items are rare and are
not a defined term under IFRS. But it does not exist under French GAAP. Exceptional items should
be disclosed separately from ordinary activities on the face of the income statement.
When payment is deferred beyond normal credit terms, cost is the cash price equivalent.
Property, plant and equipment may be revalued to fair value. Revaluations must be kept up to date.
Component accounting is used for the separate components of an asset under the IFRS. As for
26
French GAAP, cost is always the contract price. Revaluations do not have to be updated. Besides,
component accounting is not required. In addition, under French GAAP, transaction costs are
recognized in the income statement as incurred. Financial instruments are not classified into the
same categories as under IFRS, and are not fair valued except in very limited circumstances. Hedge
accounting is permitted more frequently than under IFRS. Moreover, inventory cost is also slightly
different. The cost of agricultural produce is its fair value at the date of harvest, less point-of sale
costs under IFRS but it was at cost at the date of harvest according to French GAAP.
Also, intangible assets differences lie in the fact that French GAAP development costs
normally are expensed as incurred. Expenses may be capitalized more frequently than under IFRS,
for example, start-up and business expansion costs, and advertising. There is no presumed limit of
20 years in amortizing intangibles as in IFRS, although a maximum life of five years applies in
some cases. Some intangibles are not amortized. There is no requirement for the annual
impairment testing of any intangibles under French GAAP. Intangibles cannot be revalued while
revaluation of some intangibles is permitted in limited circumstances under IFRS. Moreover,
investment property may be stated at fair value. Changes in fair value are recognized in the income
statement under IFRS while any revaluation surplus is credited directly to equity according to
French GAAP. For investments in associates and joint ventures, under IFRS, an investee is treated
as a financial asset when acquired and held exclusively for disposal in the near future but under
French GAAP, an investee is treated as a long-term investment when held exclusively for
subsequent disposal. Attributable goodwill is included in the investment in an associate according
to IFRS but it is accounted for separately from the investment in an associate according to French
GAAP. Based on IFRS, the impairment exists if an asset’s carrying amount exceeds the greater of
its net selling price and value in use, while under French GAAP, an impairment loss is recognized
27
in the form of additional depreciation when an asset’s net realizable value is lower than its net
book value. Treasury shares held for trading purposes are deducted from equity, but if it is not held
for trading purposes they are recorded as an asset under the French GAAP. Government grants
may not be recognized directly in equity under IFRS but was shown as part of shareholders equity
under French GAAP. Dividends on shares classified as liabilities are recognized as interest in the
income statement on an accrual basis under IFRS, while they are recognized as distributions of
equity under French GAAP. Provisions also have differences. Under IFRS, all provisions must be
discounted if the effect thereof is material. Repairs and maintenance provisions are prohibited. But
according to French GAAP requirement is for discount provisions. Moreover, provisions for major
repairs and maintenance are recognized.
For tax part, deferred tax generally is recognized for fair value adjustments in a business
combination that is different under French GAAP, where deferred tax is not recognized on the fair
valuation of unamortized intangible assets acquired in a business combination if they cannot be
sold separately. In respects of temporary differences on associates and joint ventures is recognized
less frequently than IFRS. Deferred tax is not recognized for temporary differences arising from
hyperinflation adjustments under the French GAAP but is provided in respect of the measurement
of a hyperinflationary subsidiary’s financial statements under IFRS. Also, government grants may
not be recognized directly in equity under IFRS but was shown as part of shareholders equity under
French GAAP. Finally, according to IFRS, current tax is recognized directly in equity when it
relates to an item recognized directly in equity but it is always recognized in the income statement
under French GAAP.
According to IFRS, a liability in respect of post-employment employee benefits must be
recognized while it is not mandatory to recognize a liability for post-employment employee
28
benefits except in a business combination under French GAAP. Moreover, extensive disclosure is
required for share-based payments under IFRS but there are no disclosure requirements for sharebased payments under French GAAP.
29
Accounting System Comparison with the Culturally Expected Accounting System
In order to use Hofstede/Gray to compare France’s actual accounting system to its
culturally expected accounting system, one must first discuss France’s values for Hofstede’s five
cultural dimensions. These dimensions were discussed earlier in this paper, but will be
reemphasized in this section in order to make sense of comparing the expected and actual
accounting systems. The dimensions are power distance, individualism, masculinity, uncertainty
avoidance, and long-term orientation. France received a score of 68 out of 100 in the power
distance dimension. This means that the French people generally accept a hierarchical order to
society (Gray). This can be found in corporate life, as French companies are generally very
hierarchical in nature when compared to the companies of other European nations (The Hofstede
Centre). Additionally, in France, the citizens accept the unequal distribution of power in
institutions and organizations (Gray). France received a score of 71 out of 100 in the individualism
dimension. This means that the French people are generally only expected to take care of
themselves and their immediate family (Gray). French people can generally be expected to have
a self-concept of “I” instead of “we”, and have a relatively low level of interdependence outside
of immediate family (Gray). In the third cultural dimension, masculinity, France received a score
of 43. This indicates that France has a relatively feminine culture. This means that the French
people are less concerned about achievement and success, and more concerned about modesty and
quality of life (Gray). Interestingly, members of French high society are more likely to be in line
with France’s feminine cultural score, while the working class is more likely to score more
masculine (The Hofstede Centre). In the fourth cultural dimension, uncertainty avoidance, France
has a very high score of 86 out of 100. This means the French people are generally uncomfortable
with uncertainty and ambiguity (Gray). In France, there is generally the need for planning and
30
structure (The Hofstede Centre). Laws, rules, and regulations are also important in order to
provide stability and structure to business and life in general (The Hofstede Centre). Basically, a
high uncertainty avoidance score shows that the French people want to control the future, instead
of letting it happen organically without planning (Gray). Lastly, France received a score of 63 in
the long term orientation dimension. A score of 63 in the long term orientation dimension shows
a propensity to take a pragmatic approach towards the future (The Hofstede Centre). This means
that the French people are more likely to be interested in achieving future results through longterm preparation than they are to be interested in preserving culture and tradition.
After gaining an understanding of France’s scores in Hofstede’s five cultural dimensions,
it is important to understand how these societal values interact, according to Gray, to produce
France’s expected accounting values/system. This section of the paper will focus on which
accounting values France is likely to have and why, while the next section of the paper will
describe what these accounting values mean for France’s expected accounting system. The
accounting values that can be derived from a country’s societal values are professionalism versus
statutory control, uniformity versus flexibility, conservatism versus optimism, and secrecy versus
transparency. The higher a country’s individualism score, and the lower its uncertainty avoidance
and power distance scores, the more likely it is to have an accounting system that focuses on
professionalism instead of statutory control (Gray). France has high scores in the power distance,
uncertainty avoidance, and individualism cultural dimensions. This means that while France does
have a relatively individualistic society, it can be expected that their accounting system will be one
that is likely to emphasize statutory control. This is because France scored high in both uncertainty
avoidance and power distance, making them have two out of the three characteristics that produce
an accounting system dependent on statutory control. The second accounting value is uniformity
31
versus flexibility. The higher a country’s uncertainty avoidance and power distance scores, and
the lower a country’s individualism score, the higher a country is likely to rank in terms of
uniformity (Gray). France has high scores in all three of these dimensions. This means that France
is likely to rank high in terms of uniformity. This is because France has two out of the three
characteristics that are likely to produce a country that ranks highly in terms of uniformity. The
next accounting value is conservatism versus optimism. The higher a country scores in the
uncertainty avoidance dimension, and the lower it scores in the individualism and masculinity
dimensions, the more likely a country is to favor conservatism over optimism (Gray). France
scores very highly in uncertainty avoidance, while scoring low in masculinity. France also scores
relatively high in individualism. With two out of three cultural dimension scores leaning towards
conservatism, it can be inferred that France has a relatively conservative accounting system. The
last accounting value discussed in this paper is secrecy versus transparency. A country that scores
high in uncertainty avoidance and power distance, and scores low in terms of individualism and
masculinity, is likely to have an accounting system that favors secrecy over transparency. With
three out of four of France’s cultural dimension criteria favoring the accounting value of secrecy
(high uncertainty avoidance and power distance scores, low masculinity score), France is more
likely to have an accounting system with the value of secrecy instead of transparency.
With the knowledge of how France’s cultural values interact to produce their expected
accounting values, France’s expected accounting system can now be discussed. It can be expected
that France’s accounting system is subject to a greater regulation and statutory control than the
accounting system of nations that lean towards a professional accounting system (Gray). This
means that it can be expected that France does not rely heavily on the discretion of individual
accountants. Instead, France can be expected to follow the strict guidance of regulatory bodies,
32
instead of relying on the self-regulation of their accounting industry (Gray). The government is
likely to have more influence in the determination of accounting standards than professional
organizations. In fact, professional organizations are less likely to have a long-standing history in
France when compared to other nations (Gray). It can be expected that the French accountant will
be mostly concerned with understanding how to implement the detailed legal requirements set
forth via statutes.
Next, France’s expected accounting system with respect to the value of uniformity will be
discussed. It can be expected that France’s accounting system will emphasize the accounting
principles of uniformity, consistency, or comparability in one way or another (Gray). The
accounting value of uniformity can manifest itself in various different ways. The value of
uniformity may cause France’s accounting system to emphasize inter-company, inter-industry, or
inter-temporal uniformity (Gray). It could also mean the emphasis of accounting consistency
within a company over a period of time, or the emphasis of comparability between companies
(Gray). Basically, France’s accounting value of uniformity causes them to be expected to have an
accounting system that prefers the enforcement of a single set of accounting practices between
companies that generally stays the same over a long period of time (Intl. Accounting Ch. 2).
France can be expected to have an accounting system that favors conservatism over
optimism. Conservatism concerns how conservatively a country’s accounting system is regarding
the valuation and measurement of assets, profits, etc. (Gray). It can be expected that France will
be relatively conservative in their asset measurements and valuations. France is also likely to have
an accounting system that discourages the use of highly favorable metrics in the areas of sales
recognition, profit, and net income. It is also likely that France’s accounting system generally
favors conservative depreciation and amortization methods. It can also be expected that
33
companies operating in France provide relatively conservative forward-looking statements in any
disclosures related to their accounting statements and future business prospects. France’s
accounting system can be expected to favor a conservative approach to all of these accounting
practices in order to cope with their preference to avoid the uncertainty of future events (Intl.
Accounting Ch. 2).
Finally, France can be expected to have an accounting system that favors secrecy over
transparency. This means that the French can be expected to prefer to limit the amount of
information disclosed to outsiders (Intl. Accounting Ch. 2). This means that it is expected that the
French accounting system does not emphasize the importance of disclosing information in a
transparent manner that would hold management publicly accountable for their actions (Intl.
Accounting Ch. 2). French companies may even be expected to have secret reserves that they do
not disclose on their financial statements, as this is commonplace for some countries that favor
secrecy over transparency (Gray).
Gray’s hypothesis regarding professionalism versus statutory control is correct with
regards to the French accounting system. As explained in the previous paragraph, it is
hypothesized, according to Gray, that France should have an accounting system that favors
statutory control over professionalism. This is the case in France. In France, accounting is
supervised by the government (The Accountancy Profession in France). Accounting qualifications
are delivered by the state, and professional accounting bodies do not deliver any of their own
qualifications (The Accountancy Profession in France). The standard setter for France is the
Autorite des norms comptables, otherwise known as the French Accounting Standards
Authority. It is a governmental agency that defines general and industry-specific accounting
standards with legal authority over entities subject to French GAAP (Accueil). With all accounting
34
guidance coming from the state regulatory agency, it is not a surprise that in France the
professional accountant’s role has been concerned with the implementation of prescriptive and
detailed legal requirements (Gray). This is in direct contrast to the amount of professional
judgment granted to accountants in societies that favor professionalism.
Gray’s hypothesis regarding uniformity versus flexibility is also correct with regards to the
French accounting system. As Gray hypothesized, France has an accounting system that
emphasizes uniformity over flexibility. In fact, a uniform accounting code that includes taxation
principles has long been in effect for France due to need to facilitate national macroeconomic plans
and goals (Gray). In France, it is required that a uniform chart of accounts be used. The use of
this chart of accounts layout is stated in French law (Chart of Accounts). The numbering and
account names must be uniform for all businesses that are subject to French GAAP. Because the
French economy is made up by a substantial number of small businesses, it is important that the
financial statements be uniform in order to assist in comparability (Wikipedia). France also
recently created the ANC, the new accounting standard setting agency, in order to simplifying
standard setting that was previously done by two separate institutions (Accueil). Having just one
accounting standard setter further helps unify the French accounting system.
Gray’s hypothesis regarding conservatism versus optimism has been historically correct,
but it can be argued that it is slightly less correct with regards to the French companies listed
publicly that are required to use IFRS for consolidated accounts. First, the historically
conservative nature of France will be discussed along with the current conservatism displayed by
French companies not affected by IFRS. Historically, there has been a strongly conservative
accounting approach in Continental European countries, such as France (Gray). This conservatism
has been rooted in France’s emphasis on an accounting system rooted in law and focused on
35
taxes. In France, emphasis is placed on the legal form of a contract when deciding when it is
appropriate to recognize revenue (KPMG). This is a fairly conservative approach to revenue
recognition. In addition, financial instruments are generally not fair valued except in rare
circumstances (KPMG).
This is a very conservative approach to accounting for financial
instruments. Furthermore, discounts, premiums, and imputed interest are amortized on a straightline basis; which is conservative (KPMG). Publicly listed French companies that are required to
use IFRS for consolidated accounts may be considered less conservative than French companies
not under this requirement. For example, inventories such as agricultural produce are stated at fair
value under IFRS and are stated at cost under French GAAP (KPMG). The fair value approach
would be considered less conservative than France’s traditional cost approach. This is also true
with regards to the accounting for biological assets (KPMG). In addition, all acquired identifiable
intangibles and goodwill are capitalized at fair value under IFRS, while they are valued “entry
value” under French accounting principles (KPMG). So, the use of IFRS for publicly traded
companies does somewhat reduce the conservatism of French accounting. Regardless, Gray’s
hypothesis is mostly correct in saying that the French accounting system favors Conservatism over
Optimism.
Gray’s hypothesis regarding Secrecy versus Transparency is more correct than not. This
means that the French accounting system is more likely to limit the amount of information
disclosed to outsiders. For example, France does not require share-based payments to be disclosed,
while IFRS does (KPMG). Additionally, unlike IFRS, France does not require disclosure for
discontinuing operations (KPMG). Under French accounting principles, segment disclosure are
substantially more limited than under IFRS. Likewise, financial instrument disclosures are more
limited than those required under IFRS. France also tends to be more secretive related to non-
36
financial disclosures of information. French companies are not required to communicate corporate
objectives, and few do (Intl. Accounting and Reporting Issues). Also, shareholder structure is
rarely disclosed (Intl. Accounting and Reporting Issues). It should be noted that although France
generally tends to be more secretive in their accounting disclosures, French companies listed
publicly that are required to use IFRS for consolidated accounts will tend to have more transparent
disclosures.
37
France’s Relationship with the U.S.
Based on the shared ideals of the French and American Revolutions, the French-American
relationship has evolved greatly from the ties founded more than two centuries ago. From the
Battle of Yorktown to the Invasion of Normandy, the French-American alliance has grown
stronger and stronger all over the years. In the end, it is not by coincidence that Eleanor Roosevelt,
former First Lady, and René Cassin, Nobel Peace Prize winner, collaborated to write the Universal
Declaration of the Rights of Man over 50 years ago (Embassy of France in Washington, D.C.,
"French-American Relations").
In a volatile situation of the world, like this one, it is imperative that the strength of the
French- American relationship keeps on strong. Political collaboration through the United Nations
and the G8, military collaboration through NATO, and economic collaboration through various
public and other private sector initiatives continue to enhance the relationship and bring France
and the United States closer than ever before.
From the historical side, at first, France’s first encounters with the “New World”. “While
serving the French crown in 1524, Giovanni da Verrazzano, originally of Italian descent, explored
North America in search of a route to the Pacific Ocean. Later in 1534, Jacques Cartier explored
the St. Lawrence River and claimed the area for France. In the early 1600s, French explorer Samuel
de Champlain traveled through and mapped the Great Lakes, while Father Jacques Marquette
founded a Jesuit mission called Sault Ste. Marie, in present-day” (Embassy of France in
Washington, D.C., "History"). Furthermore, France helps America gain independence. France
joined the American revolutionary forces in 1778. For the duration of the American Revolution,
Admiral Jean-Baptiste Donatien de Vimeur, Comte de Rochambeau who also known simply as
Admiral Rochambeau joined the Continental Army under General George Washington.
38
Rochambeau’s troops marched from Newport, Rhode Island, to Yorktown, Virginia, with the
Continental Army and fought alongside them in the Battle of Yorktown. Gilbert du Motier,
Marquis de Lafayette was a nobleman who served as an aide to General Washington at Valley
Forge and used his own money to support the revolution. François Joseph Paul de Grasse, Comte
de Grasse brought French reinforcements that were decisive in the Battle of the Chesapeake in
1781. His reinforcements also proved to be decisive in the Battle of Yorktown, which effectively
ended the Revolutionary War. After the British Army surrendered, negotiations ended with the
signing of the Treaty of Paris on October 19th, 1783. In 1824, Marquis de Lafayette became the
first foreign dignitary to address a joint session of Congress. His portrait currently hangs in the
chamber of the House of Representatives. A statue of Admiral Rochambeau, a gift from France to
President Theodore Roosevelt in 1912, stands today in Washington, D.C. (Embassy of France in
Washington, D.C., "History").
From the political side, relations between France and the United States are remarkably
strong today, as supported by several recent occurrences of bilateral visits in the political sphere.
On February 11th, 2014, President Hollande visited the United States at the invitation of President
Barack Obama, marking the first State visit of a French President since 1996. During the successful
visit, President Hollande had the chance to attend a State dinner at the White House and
commemorative ceremonies at Arlington National Ceremony， and the Tomb of the Unknown
Soldier before traveling to San Francisco to meet to inaugurate the site of the U.S.-French Tech
Hub. In June, President Obama went to Normandy for commemoration activities surrounding the
70th Anniversary of the Allied landings on D-Day. Minister of Foreign Affairs and International
Development Laurent Fabius retains a close relationship with counterpart Secretary of State John
Kerry, and the two met many times in Washington and Paris throughout the year to discuss
39
common efforts to address international threats and challenges, such as the fight against terrorism
in North Africa and the Middle East, the crisis in Ukraine, and negotiations surrounding Iran’s
nuclear program. Many other Ministers had the chance to visit the U.S. throughout the year,
including Minister of Finance, Michel Sapin, who visited Washington in the spring and the fall for
the annual meetings of World Bank and the International Monetary Fund, and Minister of Dense
Jean-Yves le Drian, who met with his counterpart, former Secretary of Defense Chuck Hagel, on
October 2nd. Moreover, on January 6th and 7th, 2015, Minister of Economy, Industry and Digital
Affairs Emmanuel Macron visited Las Vegas with Axelle Lemaire, Secretary of State for Digital
Affairs for the Consumer electronics Show, promoting French Tech startups and businesses
(Embassy of France in Washington, D.C., "Political Relations").
From military side, relations between France and the United States are especially robust,
as proved by several recent instances of bilateral visits in the political sphere. U.S. Secretary of
State John Kerry assumed his post on January 31th, 2013. Mr. Fabius congratulated him during a
telephone conversation. On February 4th, U.S. Vice President Joe Biden met with Mr. Hollande in
Paris, where they discussed French military intervention in Mali, the conflict in Syria, Iran’s
nuclear program, the Middle East peace process, French-American economic partnership, and
climate change. In international affairs, France and the United States insisted their roles at the
forefront of efforts to bring a swift halt to the bloodshed in Syria and to promote a political
transition in this country. The threat of the use of force following the horrific chemical gas attacks
of August 21th led to a UN Security Council resolution on chemical weapons in Syria and has
encouraged a political solution through a “Geneva II” conference planned in the Swiss city for
2014. French-American cooperation also extended to the military arena. The unrest taking place
in the West African nation of Mali brought about a military intervention led by France starting in
40
January, 2013. The United States supported the peacekeeping mission through material and
logistical support (Embassy of France in Washington, D.C., "Political Relations"). 2013 saw
frequent visits from French Ministers. In May, French Minister of Defense Jean-Yves Le Drian
for meetings with U.S. Secretary of Defense, Chuck Hagel. In June, 2013 Manuel Valls, Minister
of the Interior, conducted meetings in Washington and New York City to confer with American
counterparts on immigration, organized crime, and the fight against terrorism. France and the
United States participated in the G20 Meeting in St. Petersburg, Russia, in November 2013. French
President François Hollande and U.S. President Barack Obama conducted a bilateral meeting to
discuss international issues including Mali, Iran, and Syria. In November, 2013, French Foreign
Minister Laurent Fabius participated in talks regarding Iranian nuclear policy. He joined United
States Secretary of State John Kerry and representatives from four other world powers to reach an
interim deal on November 24th, indicating an easing of sanctions against Iran if the government
agrees to curb its nuclear activities (Embassy of France in Washington, D.C., "Political
Relations").
From economic side, relations between France and United States are outstandingly strong.
In June, 2013, France and the United States participated in the G20 Meeting in Lough Erne,
Northern Ireland. They joined the leading economies of the world in order to promote growth and
job creation. Fleur Pellerin, Minister for the Digital Economy, visited San Francisco in June for a
series of events with leading French and American technology professionals. As part of the Annual
Meetings of the World Bank and the International Monetary Fund (IMF) in mid-October, 2013,
Pierre Moscovici, Minister for Finance and the Economy, came to Washington for three days of
events. He was joined by Mr. Canfin, who spoke at the Brookings Institution and the Organization
of American States (Embassy of France in Washington, D.C., "Political Relations"). In addition,
41
France encourages innovative programs to help a new generation of French and American students
and leaders to research, develop, and present their ideas to a global marketplace. For instance, the
Young Enterprise initiative (YEi), started in 2006, is an accelerator designed to support
entrepreneurs grow their business in France and Europe. It offers an intensive training in Boston
and Paris and one week immersion in France that will allow laureates to benefit from of an
extensive customized business network and connections to the best resources in Europe (Young
Entrepreneurs Initiative, "The 2015 YEi Competition is closed! Thanks to all candidates."). The
New Technology Venture Accelerator (NETVA) is a program of preparation to high-tech North
American markets for young innovative French startups. NETVA allows young French innovative
companies to effectively address the North American market in their specific industry. The
selected companies will receive both entrepreneurial training and practice during a weeklong
immersion in the United States or Canada. The companies will also be helped and accompanied
by one or two local mentors in order to set up a lasting relationship with North American partners
(The New Technology Venture Accelerator, "The New Technology Venture Accelerator
(NETVA)").
From the cultural side, the relations between France and United States are impressively
strong, as proved by several instances. The Cultural Services of the French Embassy in New York
is hosting a month-long 50th anniversary celebration of French children’s publisher L’École des
Loisirs, known for its irreverent and boundary-pushing stories that empower children to explore
and indulge their curiosity. Festivities include a free, first-ever U.S. exhibition of original drawings
by L’École des Loisirs illustrators, and a series of free kids’ workshops at Albertine Books, MoMA
Design Store in SoHo, and The Invisible Dog Art Center in Brooklyn. Moreover, a silent auction
to support the first public high school in New York with a French-English International
42
Baccalaureate Program (grades 6-12) taking place on December 10th,2015 will feature several
books by L’École des Loisirs illustrators and also take place on December 10th, 2015 at 972 Fifth
Avenue (French culture, "L'École des Loisirs 50 Years"). Furthermore, On September 26th, 2015,
Laurent Fabius, French Minister of Foreign Affairs and International Development, will inaugurate
a free, weekend-long Best of France exhibition event that aims to promote France and French
culture among New Yorkers. Taking place in Times Square this year, Best of France (formerly
Taste of France) is the largest event in the world that is exclusively dedicated to France. Over 150
exhibitors, including the French Embassy’s reading room and bookshop, Albertine, will present
French technology, art, and culture at individual stands (Le Dévédec, "Home languages are an
asset for new immigrants and their American schools"). Additionally, the French Heritage
Language Program (FHLP) is a foundation-based non-profit organization working in partnership
with the French Embassy in the United States. Its mission is to provide free French classes to
underserved schools and French-speaking communities, and to advocate for the teaching of
heritage languages in the United States. The FHLP currently serves 500 students from
Kindergarten through grade 12 in New York City, Florida, Maine and Massachusetts (Le Dévédec,
"Home languages are an asset for new immigrants and their American schools").
From educational side, key parts of the cooperation include consolidating funds for
university partnerships, which combine high-level training and research, and supporting the
Chateaubriand Fellowship. More detailed, the Chateaubriand Fellowship in Science, Technology,
Engineering, Mathematics and Health for doctoral students aims to initiate or reinforce
collaborations, partnerships or joint projects between French and American research teams. The
Chateaubriand Fellowship supports PhD students registered in an American university who wish
to conduct part of their doctoral research in a French laboratory. This fellowship is offered by the
43
Office for Science & Technology (OST) of the Embassy of France in Washington in partnership
with American universities and French research organizations such as Inserm and Inria. It is a
partner of the National Science Foundation’s Grow program. The OST and its partners provide
Chateaubriand fellows with a monthly stipend of up to 1,400 € (depending on other sources of
funding) for a 4-9 month period and support for travel expenses and student health insurance
(Office for Science & Technology, "Office for Science & Technology at the Embassy of France
in the United States Mission pour la Science et la Technologie de l’Ambassade de France aux
Etats-Unis"). In addition, international exchanges between the countries have recently been on the
rise. Nearly 25 thousand French and American students participate in study abroad programs
between the two countries (Embassy of France in Washington, D.C., "Transatlantic Cooperation:
Educational, Economic, and Cultural").
All in all, working closely with the United States, France is paving the way for future
generations of scientists, artists, students and professionals, to use the resources at their disposal
in order to broaden their professional horizons, to network within the growing French-American
community, and to be successful on the global stage (Embassy of France in Washington, D.C.,
"Transatlantic Cooperation: Educational, Economic, and Cultural"). Moreover, France has the
common views in politics, Military, and economics.
44
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