France responded to the Great Depression with tax hikes, spending cuts, collective bargaining, a 40-hour work week, paid vacations and a partial nationalization of the Bank of France. Many of these reforms were suspended later in the Great Depression, and France's leadership steered recovery efforts in a more business-oriented direction.
The Great Depression for France began in 1931. A downtrodden economy led to the rise of socialist leader Leon Blum and the Popular Front. He and his party instituted social reforms to boost the economy, but Blum was impeded by right-wing fervor that had swept across France.
Blum raised the minimum wage by 7 to 15 percent to increase the purchasing power of workers so that they could stimulate the economy. Blum also proposed that banks should place the interests of the nation above shareholders, and he controlled the price of cereal. However, these policy measures proved unpopular to those on the left and right. Blum stopped his reforms by 1937, and he resigned that same year.
A new government was formed without socialist input, and new leader Edouard Daladier proposed liberal economics as a way to solve France's economic woes. Employers and police disbanded labor strikes on a harsher scale, and Daladier was granted emergency powers in 1938 by the Senate. Conditions slightly improved under Daladier's watch, which could be attributed to growth in armament manufacturing. France declared war on Germany in 1939 in response to Hitler's invasion of Poland.