Abstract
The public sector in France, which represents the firms that are controlled by the government, has been for a very long time a huge sector, with staff that represented in the 80s more than 10% of the whole labor market. Given the importance of this public sector in France, I am interested in identifying the reasons that justify the 90s trend to end with the nationalisation era and to enter a new cycle based on the privatization of the companies that had been previously taken under control by the government. First, it is necessary to identify briefly the main steps of the two privatization periods: 1986-1993 and 1997-2000. Then, it is interesting to focus on the economic and financial consequences of these measures. This study will especially focus on the importance of such a policy in the development of the stock exchange market, and the opening to world markets that occurred consequently, especially in capital markets. Just to conclude, I will explore the future of privatisation in France trying to understand why it may be adapted to some sectors but not to all of them.
So as to get a better understanding of the functioning of the French public sector and of the privatisation policies that were implemented in the last few decades, we need first to define the concepts that we are going to use and to discuss.
Nationalisation consists the property transfer of a firm to the national collectivity, either exchanging it with indemnisation, or as a sanction . Concretely, national collectivity is commonly represented by the government and therefore it becomes the new owner in case of nationalisation. Getting shares in a firm is a policy close to privatization but there is no public ownership in that case.
Privatization deals with either the property transfer from a public owned firm to individuals, or with the introduction of a new management style in a company that would then be ruled according to market rules (that assumes that the firm looks for the best possible profits). In this study, we will principally deal with the first aspect (from public ownership to private ownership) but Renault is a good example of a firm that was nationalised in 1945 but that has always been ruled according to the market rules. In the most common sense – the first definition – privatisation occurs as a part, even a small one, of a firm's social capital. And then the firm adopts a new logic: to satisfy its individual private owner and therefore, maximize profits.
In 2004, it was recorded by the INSEE that among the 1,300 firms that are public owned, 170 firms have been privatised and have been taken under the control of private entrepreneurs. Therefore, it has also recorded that the French Public Sector is now employing some 4% of the whole workforce. It seems important to note at this stage that the decrease in the number of public owned firms is much less important in the sector of equipment goods and intermediary goods than in the tertiary sector, energy one and transports one. For instance, the Government still has a major part in EDF-GDF (Electricite-Gaz de France/French Electricity and Gas provider).
