February 8, 2008 (LPAC)--The French economy ran a 39 billion euro trade deficit for 2007, an 11 billion euro increase over 2006's deficit, the government announced yesterday. The deficit has in recent years been blamed on oil price hikes and a strong euro, but those factors only exacerbate the real problem, which is the decline in the French economy itself. Eliminating oil from the statistics would yield a surplus of 4 billion euros in 2007, but that is down sharply from 18 billion euros in 2006, and the main factor in that decline is a 13 percent drop in exports of industrial goods. France sends two-thirds of its exports to other Western European nations which are themselves in economic crisis, and has poor penetration of Eurasian economies relative to Germany. A second factor is France's shift away from high-tech products into medium-technology goods, putting it increasingly in competition with lower-cost producers in the less advanced nations. This shift must be reversed in favor of higher-quality products and technological advancements, according to a study by the Prime Minister's Economic Analysis Council.