IV.  POLITICAL ENVIRONMENT

A. Bilateral Relationship

France and the U.S. are close allies.  Despite occasional differences of
view, the U.S. and France work together on a broad range of trade,
security and geopolitical issues.

B. Political System

France is a democratic republic whose political system is based on a
written constitution approved by referendum in 1958.  According to the
French Constitution, the President of the Republic is elected by direct
suffrage every seven years.  The President names the Prime Minister,
presides over the cabinet, commands the armed forces and concludes
treaties.  He is also empowered to dissolve the National Assembly and, in
certain emergency situations, may assume full power.  France's political
system is a hybrid of presidential and parliamentary systems, resulting
occasionally in the President and Prime Minister being of opposing
parties.  Since March 1993, for example, the Socialist President has had
a Prime Minister from the conservative party.

The Constitution provides for a bicameral parliament consisting of a
National Assembly and a Senate.  National Assembly deputies are directly
elected by universal suffrage for five-year terms.  Senators are
indirectly elected for nine-year terms; one-third of the Senate is
renewed every three years.

The French political spectrum includes five distinct political groups.
From right to left, these are:  the extreme right National Front (FN);
the neo-Gaullist Rally for the Republic (RPR); the moderate Union for
French Democracy (UDF); the Socialist Party (PS); and the Communists
(PCF).  Numerous smaller parties have variable national political impact.

C.  Political Events Affecting Business Climate

French Presidential elections are scheduled for April 1995, just a month
before President Francois Mitterrand will complete his term in office in
May 1995.  Given the consensus on most areas of economic policy between
the mainstream left and right, the election of a new president in 1995
will have only limited impact on the business environment in France.
That said, if a Socialist is elected president, he may be more likely to
slow the pace of privatization of state-owned businesses and to advocate
greater government intervention in the private sector, particularly on
social benefits.  On the other hand, if a conservative Gaullist such as
RPR President Jacques Chirac is elected in 1995, he may come under
pressure from his electorate to adopt more protectionist trade
measures.