What is the currency in France? Currency and monetary unit of France Money in France before the franc

Like any member country of the European Commonwealth, France also had its own currency before the emergence of a common European monetary system. The French franc was the official currency of France until the introduction of the euro in this European country, that is, until January 1, 1999. Together with the euro, it was in circulation until February 17, 2002.

History of the French franc

The history of the French franc, as the currency of France before the euro, is quite long. The franc was first introduced into circulation in 1360 by the French king Jean II the Good in honor of his release from English captivity, in which he fell after the battle of Poitiers in 1356. The first French coins weighed 3.87 grams.

This money was in circulation in France for almost 3 centuries until the French king Louis XIII in 1641 abolished these coins and introduced new "golden Louis" and "ecu" (French for "coat of arms"). Nevertheless, the people continued to use the word "franc" to name new coins.

Times of the French Revolution

At the end of the 18th century, the Great Revolution began in France. In 1795, at the National Convention, the franc was again officially restored and appointed the official coin of France.

In 1800, the Bank of France is created, and the official national currency of France demonstrates its stability. Since 1803, the French franc has been based not only on gold, but also on silver, while the value of the gold franc was 15 times greater than the value of silver coins. The stability of the gold franc was very high, throughout the 19th century and until the beginning of the 20th century it remained one of the most reliable currencies in Europe. Starting from 1808, the Bank of France began to issue not only coins, but also paper money notes.

Currency of France during the First and Second World Wars

The stability of the gold franc was undermined by the First and then the Second World Wars. The shortage of products during the war, as well as the restoration of the country, which was carried out at the expense of an unjustified large release of the money supply, led to inflation and a fall in the price of the French currency. Thus, the purchasing power of the French currency fell to 70% from 1915 to 1920 and to 43% from 1922 to 1926. The huge payments that Germany was obliged to make after the defeat in the war did not lead to the strengthening of the French economy.

In 1928, Raymond Puncaré wins the election and becomes Prime Minister of France. Since this year, the Poincaré franc has been put into circulation, which had a value of 20% of the gold franc of the beginning of the 20th century. From 1928 to 1936, the French monetary system returns to the gold standard again, but the French currency continues to lose its value. The subsequent World War II, during which most of France was occupied by Germany, and the post-war period only exacerbated the situation to the point that in 1959 the franc was worth less than 2.5% of its value in 1936.

New franc and euro

In January 1960, due to the complete depreciation of old banknotes, a new French franc was created, the value of which was estimated at 100 old francs. All old monetary units continued to circulate, and the abbreviation NF appeared on the new francs. This measure contributed to the relative stabilization of the French national currency, which in the second half of the 20th century was characterized by the same slow inflation as most European countries. In 2002, when the country completely abandoned its currency and switched to the euro permanently, the new French franc was worth less than 12.5% ​​of its original value.

Many French people of a certain age group continued to calculate their monetary amounts in francs. During the introduction of the euro, there was a lot of speculation in the exchange of old and new monetary units for the European currency. Starting from January 1, 1999, the French currency was fixed: for 6.56 francs they gave 1 euro. To simplify the exchange of these currencies, they use the following formula: they add exactly half to the amount of francs available, and then divide the resulting number by 10, as a result they receive the equivalent amount in euros with an error of 1.6%.

Note that the introduction of the euro did not lead to the complete disappearance of the franc as the current currency. It survived in the French-controlled island territories of New Caledonia, French Polynesia and Wallis and Futuna. In these territories, the so-called Pacific franc operates, which has the following value relative to the euro: 1000 francs = 8.38 euros.

French coins

Knowing what currency was in France before the approval of the euro, we will give a description of the coins of French francs, which have a very beautiful coinage. There were coins of 1, 5, 10 and 20 centimes, as well as 1/2, 1, 2, 5, 10, 20 and 100 francs. Until 1965, a 1/2 franc coin was not issued, but instead a banknote of 50 centimes was used. A coin of 10 francs began to be issued only in 1974. Since 1966, 5 centimes have also been produced with a new design and from a new metal (aluminum bronze). Until 1966, it was minted from stainless steel.

The design of almost all coins has an agricultural theme. On metal banknotes of various values, one can see images of ears of wheat and a girl doing sowing work. Only on coins of 10, 20 and 100 francs a different theme is shown. So, on 10 francs the Genius of Liberty is depicted, on 20 - Mount Saint-Michel, and on 100 - the Pantheon in Paris.

French banknotes

Before the advent of the euro, French banknotes with the following nominal values ​​were in circulation in France: 20, 50, 100, 200 and 500 francs. The 20 franc brown note depicts the famous French composer Claude Debussy, the blue 50 franc note depicts the French writer Antoine de Saint-Exupéry, the orange 100 franc note shows a portrait of the French artist Paul Cezanne, the red 200 franc note depicts the world-famous engineer Gustave Eiffel, and on the green bill of 500 francs you can see the scientists Marie and Pierre Curie.

When planning visits to financial institutions and currency exchange offices, keep in mind that the average bank is open from 10:00 to 17:00, and exchange offices are usually open from 9:00 to 18:00. Changing currency in France is less profitable than in the Russian Federation, so you should think about the exchange in advance and take euros with you, not dollars or rubles. The most profitable are French exchangers with a “nocommission” sign, but they are not common.

When entering the country, large amounts of cash, over 10 thousand euros, are subject to mandatory declaration. This amount includes not only banknotes, but also bills, traveler's checks, shares and other securities.

You can pay with a credit card in a store, in a restaurant, at a gas station and even in a taxi. You can’t do without cash except when buying from your hands, for example, at a flea market.

It is best to take a card with the main currency euro. When paying with ruble and dollar cards, money is lost on conversion and commissions.

Almost any card, credit or debit, in dollars, euros or rubles is suitable for payments. But problems may arise with structurally and morally obsolete bank cards with a magnetic stripe. Not all stores will be able to pay with such cards; problems may arise both with payment at an automatic gas station and with cash withdrawals from an ATM.

French commemorative coins

By 2016, about 250 different two-euro commemorative coins had been issued by the EU countries. France was not left out. The general view of the coins, with the exception of the image in the central part of the obverse, is unified. All of them are minted with a diameter of 25.75 mm, a thickness of 2.2 mm and a weight of 8.5 grams. The rim and the inner part of the banknote are made of different materials.

The outer part, with EU stars, is made of copper-nickel alloy (75% copper, 25% nickel), the inner part, with the main image, is made of nickel brass, with the addition of zinc (75% copper, 20% zinc, 5 % - nickel). The rim is "silver", and the core is "gold", since zinc gives the alloy a golden color.

Commemorative coins should not be confused with commemorative ones. If the latter are minted using precious metals (silver, gold and platinum), are made in small quantities and initially have both a higher cost and a significantly higher sale value, then commemorative coins are produced in significant quantities and get to numismatists and souvenir hunters for more modest price, from face value to 5-6 euros maximum.

The circulation of commemorative banknotes usually ranges from one million to 20 million copies. This indicator does not significantly affect the price of coins. It is conditionally possible to divide all coins into “specialized”, local French and pan-European or global.

"Local" banknotes, as a rule, are issued in smaller editions. So, 2 euros for the centenary of the birth of Abbé Pierre or 150 years since the birth of Pierre de Coubertin were issued in the amount of one million copies. The circulation of coins for the tenth anniversary of the economic and monetary European Union, the 50th anniversary of the Treaty of Rome and the tenth anniversary of the cash circulation of the euro is 10 million copies. The remaining banknotes dedicated to pan-European and global events and anniversaries are also minted in quantities from 10 to 20 million.

Some of the coins are distinguished by the presence of a national component, but more global significance. This is 2 euros for the 70th anniversary of Charles de Gaulle's address "To all the French", 30 years of Music Day in France, 50 years of Franco-German friendship. All these coins were issued in circulations from 9,400,000 to 10,200,000.

Visually, French minted commemorative money looks quite attractive, from the image of the charismatic mustachioed Pierre de Coubertin or the bearded man Abbé Pierre, to the usual inscription, without drawing, on the 2008 coin "French Presidency of the EU" and a sketchy image of a man next to the euro sign on the coin in honoring the decade of the monetary union of European countries.

Since 2002, the motley currency map of a united Europe has lost most of its diversity, and by 2015, 19 countries have officially switched to the euro. The French, even with some nostalgia, marked on the calendar the day when the currency of France finally ceased to be called the franc and the country completely switched to banknotes and coins of the European Central Bank.

An excursion into the history of French money

Today, few will immediately remember what currency was used in France before 2002, when euro cash entered circulation. Before the franc was “buried” completely on February 17, 2012 (even the Banque de France stopped accepting it for exchange), the national currency of France before the euro successfully existed for several centuries. It originated in 1360, when King John the Good was released from English captivity.

During the entire history of its existence, the franc was transformed several times. Initially, it was minted from pure gold, then a silver equivalent appeared, and in 1795 the first paper notes were issued.

In early 1960, the French franc went through a denomination, and until 1963 the name of the currency was used with the prefix "new".

Since 1950, an interstate agreement on the preservation of the Franc Zone was officially enshrined, the main principle of which was a fixed parity rate of all national currencies of the participating countries. Since 2002, the Zone's conversion rate has been based not on the franc, but on the euro.

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Methods of cash and non-cash payment in France

The universality of the dollar as a payment unit in Paris has no practical significance, as well as other currencies of the world. In all institutions of the country, the legal means of payment is exclusively the euro - the only monetary unit of France as of 2019.

Tourists planning a trip abroad should take care of currency exchange at home, taking into account a number of recommendations:

• the rate of converting the Russian ruble into euro in Russia is much more profitable than in exchange offices in France;
• if savings are stored in dollars, then it is better to change them upon arrival at the place of rest in order to avoid losses on a double exchange (dollar for ruble, and then ruble for euro);
• it is worth ordering a Visa or MasterCard credit or debit card at the servicing bank with the possibility of making payments abroad;
• if the exchange of the entire required amount still did not work out, you need to stock up on at least a small amount of euros so that they are enough for two or three days of stay in the country.

Having a small margin will allow you to avoid extortionate rates and commissions at exchange offices located at the airport, train station and hotel.

Additional payments during exchange transactions are common, and their amount can reach several tens of euros. If you didn’t meet a suitable exchanger or branch of a state bank nearby, you should remember that the most profitable is the commission when withdrawing cash from ATMs in France (at least 1% plus a commission for converting in favor of the issuing bank).

For those who do not speak French well, it is better to look for ATMs with the ATM icon: when working with them, you can select the menu in Russian.

In addition to cash, all French shops and establishments accept bank cards. Another thing is that when conducting non-cash transactions, there are also features:

• when leaving home, it is better to issue a smart card (or a card with a chip), since not all ATMs and terminals accept cards with a magnetic strip;
• if there is a currency account in euros, then it is most profitable to order plastic specifically for it, then for each transaction they will charge only the commission of the issuing bank;
• if the card is linked to a ruble account, then you will have to pay a conversion fee (the Russian bank that issued the card will charge a fee);
• Undoubtedly, only Visa and MasterCard payment methods are accepted, foreign national payment systems in France are not honored. Moreover, it is better to take World class cards with you or not lower than Classic - problems may arise with Visa Electron and Maestro.

It is also worth remembering that Visa's base currency is the dollar, and MasterCard works with the euro, so the latter's rates may be more attractive.

Up-to-date information about the course in France

A rapidly updated exchange rate against the euro is published on the Bank of France website in the statistics section. The information provided is grouped in such a way that the resource visitor can track the daily and average monthly dynamics.

However, the given data can only serve as a guide, since the applied values ​​in a bank or exchange office may have a significant deviation.

The difference in rates arises due to the charging of additional commissions. For example, when exchanging currency through automatic devices in crowded places for 1 euro, you can pay up to 24% plus the established rate.

Currency exchange methods

Unprepared travelers, especially those who have arrived in France for the first time, can fall into the first financial trap by handing over currency at automatic machines and exchange points right at the airport. This can only be done in cases where money is needed urgently, for example, to get from Paris to the booked hotel in Bordeaux.

At the same time, it is better to change a very small amount of euros. Exchange operations for larger amounts should be made already in the city:

• in exchange offices (bureaux de change) without a commission, you can find them at the intersection of tourist routes (you need to pay attention not only to the favorable exchange rate, but also signs No Commission or Sans commissions);
• in branches of state banks;
• at ATMs;
• at the post office;
• in large supermarkets (sometimes even dollars are accepted at the checkout, while change will be given in euros).

In order not to take away unpleasant memories of wasted hard-earned money from the country, you need to remember several ways that allow you to make money on careless tourists:

• the owners of the exchangers deliberately post the selling rate instead of buying, which creates the illusion of a profitable exchange (the client must look for the numbers opposite the VEND inscription);
• do not announce the amount of the commission in advance;
• at the bank, the amount of the additional fee will be from 3-5 euros to 24% of the transaction amount, however, these costs can be offset by a favorable exchange rate;
• when selling dollars or Russian rubles in exchange for euros, the overpayment can be up to 10% of the amount.

Some travelers, who inquired in advance what currency they use in France, decide to pay on the trip with bank cards, rightly considering them to be more modern means of calculating and storing funds than cash.

VAT and rules for using Tax Free

When buying goods for 175 euros or more, a tourist can try to get back part of the money spent (in the amount of the accrued VAT). The tax refund will not exceed 16.67% of the purchase amount, because the standard rate in France is 20% (reverse calculation mechanism: price/120*20=16.67%).

Successful registration of tax compensation (DETAXE) is possible subject to the obligatory observance of certain conditions:

• stay in France and the EU for less than 6 months a year;
• age - over 16 years old;
• an amount of 175.01 or more euros must be spent on one day and in one place;
• obligatory registration of Tax Free at the place of settlement and affixing a stamp at the border. In 2019, you can not crowd in queues at customs officers, but use the PABLO electronic system (Programme d’ Apurement des Bordereaux par Lecture Optique de code-barres - Program for reconciling receipts by optical barcode reading);
• A refund must be applied for within 90 days of the last day of the month in which the purchase was made.

The customs department took care to issue instructions for those wishing to issue Tax Free through PABLO terminals.

Customs currency restrictions and regulations

French customs officers are authorized to inspect any person crossing the border of the country at the slightest suspicion, but more often than not, the likelihood of inspection increases when carrying non-standard baggage. At the same time, restrictions for EU citizens are much softer than for those who present a passport of a country that is not a member of the union.

In addition to commodity import norms, there are also nuances when transporting money and valuables equivalent to them. Assessment of compliance with the permitted customs criteria is carried out according to simple rules:

• the French do not limit the maximum amount of currency that can be imported from outside the EU, but require that valuables worth more than 10,000 euros be declared when passing through customs;
• in whatever currency the valuables are imported, the national currency of France at the current moment and at the exchange rate on the day of entry into the country, that is, the euro, will remain the equivalent for evaluation;
• the following are equated to cash: tickets and coins of national banks, securities, traveler's and bearer's checks, letters of credit, bills of exchange and bonds;
• the value of all valuables is summed up, the resulting value should not exceed 10,000 euros, otherwise you will have to declare them and, possibly, explain the origin and purpose of the funds;
• the export of currency is not limited and does not require additional explanations.

When crossing the border without declaring and being included in the limit, you can carry money stored on debit and credit bank cards, since they fall under the definition of non-cash funds.

When importing goods purchased outside the EU or in territories subject to the customs rules of France, the duty is not levied if:

• the total cost does not exceed 300 euros for those traveling by land;
• the amount of goods transported by plane or by sea is less than 450 euros;
• Items are not commercial.

Frequently asked Questions

Going on a trip to an unfamiliar country, most often a tourist is interested in the names of the most interesting sights and questions of rational spending of finances abroad.

• How much to take with you?

Each traveler determines his own budget, but it is worth noting that Paris is a very expensive city. The average cost of one tourist day varies from 40 to 100 euros. Those who want to save money on a cultural program need to know:

1. some public museums do not charge an entrance fee, or organize a free visit on Sundays (for example, Cognac Jay (Musée Cognacq-Jay), Museum of Modern Art, Honore de Balzac House Museum (Maison de Balzac), Louvre Museum (Musée du Louvre );
2. students who have issued an international certificate ISIC (International Student Identity Card) can take advantage of special discounts;
3. children of all ages are allowed free admission (usually up to 4 years old), and teenagers under 12 years old can enter most commercial entertainment places at half price.

• Which is more profitable: credit card or cash?

The number of transactions and the amount of cash payments in Europe is much less than in Russia. Therefore, the desire to pay with a card will not surprise even the seller of a small shop in a tourist area. However, to insure against surprises, you need to put at least a little cash in your pocket. It will be nice if, during the exchange, the cashier will issue small bills in denominations of 5, 10 and 20 euros.

If it is possible to take a bank card with you, then it is more profitable to use:

• tied to a currency account in euros;
• safe in the sense of fraud (it is better to refuse cards with contactless payment or without PIN-code confirmation), because it will be difficult to prove something without good French.

Depending on how much money a tourist is willing to leave in France, the card will be convenient for those who do not want to declare large amounts of cash carried across the border.

• How to determine the authenticity of the euro when exchanging?

European culture and law-abidingness does not exclude the unscrupulousness of individuals who want to make money on the deception of foreigners. When currency exchange does not take place at a bank or ATM, you need to clearly understand what French money looks like and remember the main signs of the authenticity of banknotes: watermarks, a security thread visible through the light, relief printing, a hologram, ink that changes color at different angles.

It is good if the traveler familiarizes himself with these signs in advance. The most accurate information is on the Bank of France website in the Billets section. It must be remembered that the design of banknotes may differ depending on the country of origin, but this does not affect the ability to pay with them anywhere in the European Union.

Conclusion

In 2012, the franc finally died out of the life of the French, and the only legal currency in France now is only the euro. In this regard, tourists who keep their savings in another currency will have to prepare for additional conversion costs. You can do this either at home before leaving, or immediately after arriving in the country. Additional information about rates and commissions in French exchangers will help you make a financially sound decision.

In the late 20th and early 21st centuries, many European currencies were replaced by the euro. At the same time, currencies ceased to exist, the history of which lasted for centuries. Among them is the currency of France - the franc. It lasted no less than two centuries, and the history of the French currency itself has a little over 640 years.

Antiquity deep

A distinctive feature of the franc is that its name is not tied to any measure of weight. From the very beginning, the franc existed as a monetary unit. The year of its appearance can be considered 1360. The national currency of France got its name in honor of John II released from English captivity. The first franc was also called "equestrian", the obverse of the coin depicted a rider (king) on ​​a horse. At the time of its appearance, the franc was equal to the Turkish livre, a coin that had existed for almost a century and served as a means of payment throughout the country. The first francs were issued only 20 years, and livres served as a means of payment for another four and a half centuries, but due to their huge popularity they were already called francs. The currency of France received its second birth in 1575, when silver francs came into circulation.

Age of change

The franc was finally fixed as the main currency of the state after the overthrow of the monarchies, at the same time the decimalization of the currency was fixed (splitting the franc into one hundred centimes). At the same time, they were released almost eight years after the revolution, under Napoleon Bonaparte. They, surprisingly, kept their value for almost a century, until 1903. During the 19th century, the currency of France went through many changes in government. In the second half of the century, Belgium and Switzerland created their own francs, based on French. A little later, the Latin Monetary Union was created. This was the first attempt to create the first interstate currency on the continent. The basis of the union was laid down as France. The euro was almost a century and a half away. In connection with the outbreak of the First World War, many European states, including France, abandoned the gold backing of the franc. At this time, military spending was offset by the release of new funds to the market. All this could not but affect the franc - for the period from 1915 to 1921, its purchasing power decreased by almost 70%. In the future, the franc continued to fall in price. And then the Second World War broke out. And in the occupied country, occupation stamps were used as money. Of course, their rate was significantly overestimated.

Postwar franc

In 1960, a denomination was held in France, led by Charles de Gaulle. And again a new franc appeared, equal to a hundred old ones. It is not difficult to calculate that one old franc was now equal to a centime. Actually, it was like this for almost two more years, exactly until new centimes were minted. And in 1979, an event occurs that influenced the fate of the franc. France joined the European monetary system. Actually, the currency of France before the euro was never able to gain its former heights. The purchasing power of the franc in 1999 has fallen by eight times compared to 1960. This is what can be considered surprising: in spite of everything, the new franc lasted for four decades, many residents of the state, right up to the transition to the single European currency, recalculated prices for old francs.

Frank left, Frank stayed

On January 1, 1999, the franc gave way to the single European currency. The former currency of France, although it disappeared from circulation, remained in countries that had ever worked closely with it. And this applies not only to the overseas possessions of France, where until now the French Pacific franc has been used as the currency for settlement. Until recently, there are more than twenty varieties of francs in the world. Thus, the Swiss currency remained independent. also runs in Liechtenstein. And in Africa, there are as many as 14 states whose currency is the CFA franc, and six have their own independent francs. However, the currency of France remained in the hearts of the inhabitants of the country. Merchants from one of the towns organized a trade in various goods for francs, and buyers flew to the city from all over the country. However, this did not last long, at the end of February 2012 it became impossible to exchange French francs for euros. The French franc is gone, leaving its mark on the history of the country and the world.

in France for much of the 19th century. there was bimetallism. According to the law of 1803, gold and silver were subject to free coinage, and coins from both metals had unlimited legal tender power. 3100 francs were minted from 1 kg of gold, and 200 francs from 1 kg of silver. Thus, according to the law, the value ratio between silver and gold was 1:15.5. The actual ratio of the market values ​​of these metals deviated from that established by law in one direction or the other. As a result, in the monetary circulation of France, in some periods, silver displaced gold from circulation, and in others, gold displaced silver.

In 1865, France led the Latin Monetary Union, and in 1873 abolished the free coinage of silver, keeping it only for gold. This meant a transition from bimetallism to gold monometallism. However, the previously minted five-franc silver coins retained the unlimited power of legal tender. Therefore, the French monetary system was a "limping type" gold monometallism.

On August 5, 1914, a law was passed that abolished the exchange of banknotes of the Bank of France for gold and gave it the right to issue banknotes with a forced exchange rate. During the war, gold coins went out of circulation, and the latter was filled with fiat banknotes, degenerated into paper money. The issue of these banknotes was used to finance the military spending of the state.

The scale of inflation in France during the First World War is evidenced by the following data: for 1913 - 1918. the number of banknotes in circulation increased from 5.7 to 31.1 billion francs, the amount of deposits in current accounts in major commercial banks - from 4.6 to 8.1 billion francs, and the wholesale price index increased by 3.4 times. The inflation that began during the First World War continued in France longer than in other capitalist countries, until 1926. This is explained by the fact that France, in connection with the large expenditures for the restoration of the regions destroyed during the war, had a large budget deficit, which it largely covered by the inflationary issuance of paper money. At the same time, inflation was directly used to finance companies that received huge subsidies from the Treasury under the guise of compensating for damage suffered by their enterprises during the war.

The turn from inflation to stabilization of the franc did not begin until 1926. The state budget was balanced with additional taxes. As a result of the deflationary policy, the money supply in 1926-1927. decreased somewhat, and in 1928 a monetary reform was carried out. France did not restore the exchange of banknotes for gold at the pre-war gold parity, but carried out a hidden devaluation: although the banknotes were to be exchanged for gold bullion at face value, the gold content of the franc was reduced by almost 5 times - from 0.290323 g to 0.05895 g of pure gold . The devaluation of the franc legalized the confiscation of 4/5 of all monetary savings.

The result of the monetary reform of 1928 in France was the introduction of a gold bullion standard, and the convertibility of banknotes into gold was curtailed: banknotes were subject to exchange for gold bullion only if they were presented for exchange in the amount of at least 215 thousand francs, which was equal to 12.5 kg of gold . Thus, for small holders, banknotes were in fact irredeemable. Unlike other Western countries, France during the crisis of 1929-1933. retained the gold bullion standard. This was due to the fact that the crisis gripped it later than other countries. The gold reserves of the Bank of France from June 1928 to the end of 1932 increased from 29 to 83 billion francs. (in new francs). The influx of gold into France was the result of the return, after the monetary reform, of French capital from abroad, which had gone there during the years of inflation, and also of the considerable influx of foreign money capital, which sought refuge in France from the depreciation to which they had been subjected in their own countries.

Relying on its increased gold reserves, France led the so-called gold bloc, which included several other Western European countries (Belgium, Holland, Switzerland). The leading role of France in the gold bloc and its struggle to maintain the gold standard was explained by the interest in the gold standard of the influential in this country. In addition, the French government was afraid of the discontent of large sections of the petty bourgeoisie in the event of the abolition of the gold standard and a new depreciation of the franc.

In the mid 1930s. France's economic and financial situation worsened. The index of its industrial production decreased from 1933 to 1935 by 12%, the budget deficit increased from 4.6 billion francs. in 1932 to 16.9 billion francs. in 1936, while the gold reserves of the Bank of France decreased during the same period from 83 to 50 billion francs. The leakage of gold from France, especially intensified since 1936, was the result not only of objective economic conditions, but also of the conscious policy of the financial oligarchy, which attacked the franc, seeking to overthrow the Popular Front government. To this end, on a massive scale, she transferred her capital abroad. In October 1936, the government, headed by the right-wing socialist Blum, despite the protests of the Communist Party, devalued the franc, reducing its gold content by more than 25%. At the same time, the exchange of banknotes for gold was stopped. In 1937 and 1938 two more devaluations of the franc were carried out.

As a result of three devaluations in 1936-1938. the franc lost 58% of the gold content, which was established by the monetary reform of 1928. All these devaluations differed significantly from the devaluation of 1928 in that they were not accompanied by the restoration of the gold standard and the stabilization of the franc, but, on the contrary, meant the collapse of the gold standard and the progressive depreciation of the franc. By the end of 1938, the franc had fallen over 60% from its 1929 gold parity.

Inflation in France in the post-war period

A feature of military inflation in France, in comparison with the United States and England, was that it was aggravated by the robbery of France by Nazi Germany. The latter levied huge occupation tribute from France, which was the main reason for the huge budget deficits, which were covered by the inflationary issuance of paper money. Almost all of the increase in French banknotes during the years of the German occupation was to provide emergency loans to the government, which were used to pay the occupation tribute.

From the end of 1939 to September 1944, the banknote circulation of the Bank of France increased from 151 to 642 billion francs, i.e. 491 billion francs, and emergency loans from the bank to the government amounted to 426 billion francs at the end of 1944. Inflation in France during the Second World War was aggravated by a sharp decline in production and trade as a result of the economic devastation caused by the fascist occupation. The index of industrial production in 1945 decreased by 2.7 times compared with 1939.

Post-war inflation in France is closely linked to a chronic budget deficit, which is caused by large military spending, as well as the costs associated with state regulation of the economy and the implementation of the "growth policy". After World War II, the franc was repeatedly devalued; the last two devaluations took place in December 1958 and August 1969.

The devaluation of 1958 was the seventh in the post-war period: the gold content of the franc was reduced by 17.5% and reduced to 0.0018 g, i.e. decreased 161 times compared to its gold content in 1914. The purchasing power of the franc, measured by the retail price index, at the end of 1958 was 180 times less than in 1928. The franc exchange rate against the dollar fell sharply: before the Second World War (in 1938), 1 dollar was equal to 37.5 francs, and at the end of 1958 - 493.7 francs.

Frank became so "weightless" that the government saw fit to "weight" him with a denomination. The denomination was carried out at the beginning of 1960 and resulted in the enlargement of the franc by 100 times. The new franc (which came to be called "heavy") was equal to 100 old; he received a gold content of 0.18 g of pure gold, and the dollar exchange rate in new francs was set at 4.937 francs.

The devaluation of 1958 played a certain role in increasing the export of French goods to the world market. Over the next decade, France's balance of trade and payments tended to surplus, and its gold and foreign exchange reserves increased significantly, from $1,050 million at the end of 1958 to $6,994 million at the end of 1967. (including the share of gold accounted for respectively 750 million and 5234 million dollars). However, the internal process of inflation continued, which found expression in a systematic increase in commodity prices. Thus, from 1962 to August 1971, the retail price index rose by 55%.

In connection with the increase in inflation, back in September 1963, the French government proclaimed a “stabilization plan”, which included blocking retail prices and wages, a number of credit restrictions (limitation of bank loans to enterprises and consumer credit, an increase in the discount rate of the Bank of France in November 1963 from 3.5 to 4%), as well as measures to reduce the budget deficit through a significant increase in taxes. The essence of the "stabilization plan" was to attack the living standards of the working masses by "freezing" wages and increasing the tax burden. But there was no real stabilization of the franc: military spending and the money supply continued to increase, while the purchasing power of the franc fell.

The inflationary rise in prices in France and the devaluation of the British pound sterling in 1967 worsened the competitiveness of French goods on the world market, which had a negative impact on the country's trade and balance of payments. The mass national strike of workers in May-June 1968 caused a panic flight of capital from France, the outflow of which from May to September 1968 alone amounted to 12.5 billion francs. France's gold and foreign exchange reserves began to decline sharply: in 1.2 years (from the end of 1967 to July 1969), they almost halved: from 7 to 3.6 billion dollars.

On August 10, 1969, the franc was devalued: the government announced a reduction in its gold content from 0.18 to 0.16 g of pure gold, i.e. by 11.1%, while the franc fell against the dollar from 4.937 francs. up to 5,554 francs for $ 1. In September 1969, the French government published a "recovery plan", which provides for a reduction in domestic consumption, a reduction in the budget deficit and an increase in exports. Credit restrictions were again applied (the discount rate of the Bank of France was raised in 1969 from 6 to 8%; bank and consumer credit was limited), and taxes were raised to reduce the budget deficit.

However, the devaluation of the franc in 1969 and subsequent measures did not eliminate the roots of inflation; retail price growth continued. Yes, since 1970. to June 1972, the consumer price index rose by 11%. For a long time, France was at the head of the franc zone. This currency group was formed even before the French colonies gained independence. In addition to France, the franc zone included its colonial possessions - Algeria, Morocco, Tunisia, Cameroon, Togo, etc., as well as the so-called overseas departments of France (Guadeloupe, Guiana, Martinique, Reunion). Within the franc zone, the French franc played the role of the hegemonic currency, and all other countries had to keep their reserves in French francs and store them in Paris, and their exchange rates against the French were fixed at a certain level, which could not be changed without French consent. In 1950, the exchange rate of 15 African colonies was 1 franc. CFA = 2 French fr. (CFA - "Colony Francaise d" Africa "), and the exchange rate of the Pacific colonies of France - 1 French CFP = 5.5 French francs (CFP - "Colony Francaise du Pacific").

France benefited greatly from the franc zone. She disposed of the foreign exchange reserves of the countries of the zone, which were withdrawn from there and placed in France. The establishment of an overvalued exchange rate for colonial francs in relation to French made it possible for French companies to receive increased income from exporting their goods and capital to the colonies.

In the post-war period, the former colonies of France, having achieved state independence, began to create their own issuing banks and their own monetary systems. After the war, centrifugal tendencies develop within the franc zone, weakening France's monetary hegemony. When the French franc was devalued in December 1958, Morocco and Tunisia refused to devalue their currencies, as a result, their exchange rate changed (increased) against the French franc, which was in clear contradiction with one of the foundations of the franc zone - the principle of fixed intra-zone parities. In 1959, these states introduced currency control over transactions with the franc zone (previously, currency turnover within the zone was not subject to restrictions) and, although they continued to keep their foreign exchange reserves in France, they began to make foreign exchange transactions through their own issuing banks, bypassing the Parisian foreign exchange market .

Since November 1962, the CFA franc has received the designation "franc of the financial community in Africa" ​​instead of the former name "franc of the French colonies in Africa". After the devaluation of the French franc in August 1969, Algeria, Morocco and Tunisia refused to follow the example of France, retained the former gold content of their currencies and changed their course in relation to the French franc. However, other members of the franc area have devalued their currencies to the same extent as France. The latter still continued to use the franc zone to its advantage. French monetary hegemony within this zone continues for a number of developing countries, although the franc zone lost its significance in the early 1970s; in connection with changes in the world monetary system and the adoption in 1976 of the Jamaica Agreement, which transferred international settlement relations to the national credit money of the leading Western countries.

Cash and non-cash transactions in France

The structure of monetary circulation in France is divided into two main concepts: the money supply (lamassemonetaire) and liquid funds in the economy (laliquiditydeI "economic). The money supply - the M1 aggregate - includes cash (lamonnaiefiduciaire) i.e. banknotes and small change, and money written into accounts (lamonnaiescripturale), i.e. bank money, which is issued on the basis of demand deposits in banks, postal money transfer agencies, and the treasury.

The M2 aggregate consists of the M1 aggregate and the money created by banks and other financial institutions on the basis of time deposits and special accounts (savings deposits, cash bills, savings accounts for housing construction, bonds of the national cash desk for agricultural credit). All this is called the likeness of money or quasi-money (laquasimonetaire). In turn, aggregate M3 includes aggregate M4 and deposits in savings banks, treasury bills, which, as a rule, are placed among the population.

In the structure of the M1 aggregate, France was characterized by a decrease in the share of banknotes and small change, with an increase in demand deposits and the stability of postal check accounts. Thus, since the 1960s there was a tendency to increase non-cash turnover. The main types of cash circulation of money are banknotes and change coins, while non-cash circulation is represented by checks and accounts for various types of deposits.

In France, there were national features of cash circulation. Small change coins serving retail circulation are minted from nickel, silver and aluminum. Their share in money circulation is small. However, in France the coin was the object of private hoarding. For example, during the Second World War, coins made of alloys and bronze, which had a golden sheen, were thesaurized. In the 1970s 40 million pieces 10-franc silver coins practically left the sphere of circulation as a result of hoarding. The same fate befell the silver coins in denominations of 50 francs. (weight 30 g, diameter 4 cm), released in 1974.

Before the adoption of the euro, there were four sources of money issuance in France: first, the central bank (Bank of France); secondly, banks and some financial institutions that create quasi-money; thirdly, the Ministry of Finance, which, lending to the economy, issued money; fourthly, the deposit-safety cash desk, which carries out indirect emission of money.

At the same time, there are three main channels for issuing money in France: bank lending to the national economy, which ranged from 20 to 85 money equivalents; bank lending to the state (the share of government bonds fluctuated from 33 to 9% in the money supply from the 1960s to the 1990s) through banknotes issued under government bonds; the issue of banknotes against the growth of official gold and foreign exchange reserves, which was carried out mainly until 1976, i.e. to the Jamaican Monetary Agreement.

As a non-cash turnover in France, check circulation, current accounts, and credit cards were widely used. Most widespread in the 1970s. received "blue cards" (about 1 million in the 1990s), which were issued by both nationalized and private commercial banks. France as a whole lags behind the USA, England, Germany in terms of the degree of non-cash payments, however, in the 1990s, their share grew due to the acceleration of automation and computerization of banking and exchange business, various credit operations.

Features of the monetary circulation of France as a member of the European Union

As you know, France has been a member of the common market since 1957; The European Economic Community, which in 1996, according to the Maastricht Accords, was transformed into the European Union, which at that time united 18 European countries. Therefore, France for a long time had to take care of the firmness of its monetary unit - the franc and monetary circulation, not only for reasons of internal economic development, but also due to the fact that it was an active member of European integration.

France experienced the greatest difficulties with its currency in the late 1960s and early 1970s, when the world monetary and financial crisis worsened. For France, this was reflected in a slowdown in growth, a deficit in the balance of payments, a flight of short-term capital, a reduction in gold and foreign exchange reserves, and a depreciation of the franc.

In August 1969, France was forced to devalue the franc by 11.11% and take deflationary stabilization measures in order to increase the competitiveness of French industry. From August 1971 to January 1974, a dual currency market was created: for current foreign trade operations, the franc exchange rate was maintained at an undervalued level, which stimulated French exports to the USA, Japan, and Europe; in financial transactions, the rate fluctuated freely depending on supply and demand.

The global energy and raw material crisis in the early 1970s. exacerbated the financial and economic situation in France. Thus, its expenses for importing oil in 1974 increased from 15 to 45 billion francs, i.e. 3 times, which led to an increase in the deficit of both trade and balance of payments. This caused a desire to get rid of the francs, and speculators were playing for a fall in the rate. At the same time, participation in the EEC forced France to enter the system of coordinated exchange rate fluctuations within the framework of the "common market" against the dollar and European base currencies, first through the currency "tunnel", and then through the European currency "snake".

As a result, in 1973-1975. France was forced to actively use foreign exchange reserves to maintain a fixed exchange rate for the currencies of Germany, Belgium, Holland and Denmark. Losses in foreign exchange reserves amounted to several billion dollars. In order to preserve reserves and mitigate the energy crisis, France twice (from January 1974 to July 1975 and from March 15, 1976 to June 1976) was forced to refuse to participate in the European currency “snake” and adopt a “floating” franc exchange rate, which meant a hidden devaluation and promotion of exports.

Adoption of new economic programs in the late 1970s. ("Barr's plans") to stabilize the economy and the monetary and financial position of France, the easing of the currency crisis through the adoption of the Jamaica Agreement made it possible to strengthen the position of the franc against the dollar and other currencies. In addition, certain economic successes of the countries of the "common market", including France, in the late 1970s - early 1980s. allowed the European Community on the basis of its monetary union to create a new international unit ECU, which, along with the franc and other currencies since the late 1970s. began to play the role of an international means of payment in world trade, credit transactions and in the capital market (especially in the eurocurrency market).

Based on the materials of the book "Money. Credit. Banks: Textbook for universities / E.F. Zhukov, L.M. Maksimova, A.V. Pechnikov and others; Edited by Prof. E.F. Zhukov" - M .: Banks and exchanges, UNITI, 1999. - 622 p.