duced measures to boost
employment. The government is focusing on the problems of the high
cost of labor and labor market inflexibility resulting from the
35-hour workweek and restrictions on lay-offs. The government is
also pushing for pension reforms and simplification of
administrative procedures. The tax burden remains one of the highest
in Europe (43.8% of GDP in 2003). The current economic slowdown and
inflexible budget items have pushed the 2003 deficit to 4% of GDP,
above the EU's 3% debt limit. Business investment remains listless
because of low rates of capital utilization, sluggish demand, high
debt, and the steep cost of capital.

French Guiana
The economy is tied closely to the larger French
economy through subsidies and imports. Besides the French space
center at Kourou (which accounts for 25% of GDP), fishing and
forestry are the most important economic activities. Forest and
woodland cover 90% of the country. The large reserves of tropical
hardwoods, not fully exploited, support an expanding sawmill
industry that provides sawn logs for export. Cultivation of crops is
limited to the coastal area, where the population is largely
concentrated; rice and manioc are the major crops. French Guiana is
heavily dependent on imports of food and energy. Unemployment is a
serious problem, particularly among younger workers.

French Polynesia
Since 1962, when France stationed military
personnel in the region, French Polynesia has changed from a
subsistence agricultural economy to one in which a high proportion
of the work force is either employed by the military or supports the
tourist industry. With the halt of French nuclear testing in 1996,
the military contribution to the economy fell sharply. Tourism
accounts for about one-fourth of GDP and is a primary source of hard
currency earnings. Other sources of income are pearl farming and
deep-sea commercial fishing. The small manufacturing sector
primarily processes agricultural products. The territory benefits
substantially from development agreements with France aimed
principally at creating new businesses and strengthening social
services.

French Southern and Antarctic Lands
Economic activity is limited to
servicing meteorological and geophysical research stations and
French and other fishing fleets. The fish catches landed on Iles
Kerguelen by foreign ships are exported to France an