The French economy, and related exchange traded fund (ETF), is in the throes of a recession. But some companies are working to mitigate the pangs.

French Prime Minister Francois Fillon admits that their economy will “probably” shrink by 2.5% this year, according to Forbes. Figures show that the French economy is contracting at its fastest rate in more than 30 years.

Disgruntled workers have grown increasingly antagonistic, detaining managers and impeding production, after recent layoffs and cut backs. Anita Elash for Marketplace reports that one of France’s richest men, Francois Henri Pinault, is being held hostage by workers upset by plans to lay people off at his chain of stores. Bossnappings were common in France in the 1970s. Pinault is one of several lately – there have been bossnappings at 3M, Sony and Caterpillar, as well.

The government has promised to keep taxes low in hopes of easing the consumer’s burden. It is now projected that recovery may occur next year, but at a slow crawl.

In the widely-known French luxury industry, which accounts for around 2.8% of annual exports, companies are holding onto traditions and quality, but there is a need to adapt so as to stay competitive in today’s markets, write Katie Catillaz et. al. for Knowledge@Wharton.

French president Nicolas Sarkozy has initiated economic reforms to increase the international competitiveness of France’s economy. French luxury foods companies are now pursuing two strategies of brand innovation and increased market share in international markets.

• iShares MSCI France Index (EWQ): down 14.3% year-to-date

Max Chen contributed to this article.

Tags: Europe, EWQ, France, Global ETFs