1. 10 MYTHS ABOUT FRANCE January 2008

2. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 2 World’s 6 th largest economic power at the heart of a 493 million strong consumer market 3 rd leading destination worldwide for FDI, after the U.S. and the U.K. in 2006 (UNCTAD) World’s 5 th largest exporter of services and exporter of goods Myth #1: “Once a world power, France is now on the decline.” Reality:

3. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 3 Myth #2: “The French are always on strike.” Reality: Low number of strikes in the private sector 0 10 20 30 40 50 60 70 80 Spain Italy USA France Netherlands Germany Japan Average working days lost due to strikes per year per 1,000 inhabitants (2000-2004) Data source: ILO Yearbook of Labor Statistics 2006 - IMD 2007

4. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 4 Myth #3: “The French are lazy.” Reality: French managers work average of 48 hours per week Average number of hours worked per week (full-time) Data source: Eurostat, Working time data, Series EFT, 2008 49.7 49.1 48h 47.8 47.5 47.4 46.8 46.6 44.2 44 41.9 36 38 40 42 44 46 48 50 52 54 56 Germany Belgium France Italy Spain Netherlands EU-27 Denmark United Kingdom Sweden Norway Managers and corporate executives Labor force France ranked 3 rd in the world for hourly productivity behind the U.S. and Norway in 2007 (Source: ILO)

5. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 5 Myth #4: “France is not business friendly.” Reality: Lower employment costs for executives

6. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 6 Myth #5: “The French brain drain” Reality: France is a brain-gainer Only 3% of French researchers are settling abroad: the lowest rate in Europe. France attracts more graduates than it loses; only the USA and Canada can compare. The most aggressive research tax credit in the EU Patent and translation costs reduced by 20%- 40% with the London Agreement (also called the “Accords de Londres”- October 29 th, 2007)

7. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 7 Myth #6: “France is deeply conservative and incapable of reform.” Reality Incentive measures valuing hard work applied August 21 st 2007:  Reduced social charges on overtime for companies (“TEPA” law)  Social charges tax exemption and removal of taxes on overtime for employees ( “TEPA” law) Other measures expected in 2008:  Labor law simplified with a single contract  Possible buy-back of remaining “work-hour reduction” days  Facilitation of working Sundays

8. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 8 Myth #7: “French taxes are stifling.” Maximum income tax rate reduced to 40%, like in the UK. Capital gains from sales of shares are totally exempt from tax once the securities have been held for 8 years. Maximum overall tax will drop from 60% to 50% of an individual’s total revenue, including direct, national and local taxes, as well as CSG and CRDS contributions, for taxes paid in 2007. ( “TEPA” law– August 21 st 2007) Applicable households will also be able to take advantage of an increase from 20% to 30% on the tax deductions related to the value of their principal residence, as well as deduct 75% from their wealth tax (ISF) to invest in small-and-medium- sized enterprises up to a set limit of €50,000 per year. Research tax credit 2008: 30% of yearly R&D expenses, up to a limit of €100 million. (Finance law 2008) Reality: A more competitive fiscal system & reforms scheduled in 2008 NEW MEASURESNEW MEASURES

9. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 9 Myth #8: “Investors are fleeing France” Reality: Paris ranks 2 nd for the location of company headquarters in 2007 0 10 20 30 40 50 60 Tokyo Paris NYC London Beijing Seoul Toronto Madrid Zurich Houston Munich Osaka Rome Atlanta Source: Fortune « Global 500 companies » 2007 18,000 foreign subsidiaries based in France which employ some 2.3 million workers

10. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 10 Myth #9: “French economic patriotism is nothing but protectionism.” Source: Balance des Paiements - Banque de France 40 41 42 43 44 45 46 47 20022003200420052006 Reality: Foreign investors hold 46.2 % of the companies listed on the CAC 40 at the end of 2006

11. © AFII 2008 77 bd Saint Jacques 75680 Paris Cedex 14 11 World’s Top 200 companies (based on profits, earnings, and market value) Source: Forbes 2000, 2007 Reality: 14 French companies are among the world’s top 200 Myth #10: “France is all about food, fashion and wine.”