How does the operation of the country run? Does everyone still go to work every day, pay taxes etc. What happens to the government?
Part 1
This of course, depends strongly on when we are talking about, if it concerns the time frame directly after the French collapse in 1940 or the stretch of time when the Vichy Regime ruled the southern parts of France or after the German occupation of all of France in 1942. And there is also the distinction between urban and rural settings in terms of how they were affected by Nazi invasion and occupation.
For some important context: The fall of France in June 1940 was a shock to its population. Massive volumes on the background behind why France fell have been written and while some important factors were military ones, others concern the state or morale in France and the trauma of WWI. While all this has historical importance, in terms of how everyday life changed, a highly important factor is that the war of 1940 was the least destructive war fought on French soil in the 20th century. French cities had not been systematically bombed as Rotterdam and Warsaw had been and London and Belgrade were about to be. Neither had wide areas of French soil been reduced to no-man's-land as it had been from 1914 to 1918.
This would change later when through Allied bombing and Operation Overlord France would become the second most bombed country on the Western Front after Germany but for the beginning of occupation and the change in regime, this lack of destruction is significant in as far as it enabled both the occupying Germans as well as the Vichy Regime that agreed to sign the armistice with the Germans to implement a policy of stressing a quick return to normalcy in order to prevent chaos as well as resistance.
This policy was ever present from the German side during the war. Take for example this article from the Observer from 1941 re-published in the Guardian:
The interesting thing is the immense care that is taken to please the French people and to show that German and French culture are not only essentially harmonious, but are complementary to each other. "Collaboration" is the daily theme, profuse flattery being addressed to the French businesses represented at the Leipzig fair, to the France Européenne exhibition, to the French banking system, to the particular French political and economic gifts that could play their part in the new Europe. There are glowing articles about Paris, its monuments, places of historic interest, its cafes, gaiety, charm, its bread, its women. "The beauty of Paris is that she is really like an impressionist painting," ran one typical sentence in a recent article.
Nightclubs are praised and advertised. The suggestion is implied that Paris, with its historical, cultural and entertainment value, is to become the chief centre of recreation and relaxation for the German overlords of the future, and that France will thereby be contributing a valuable part in the future working of the New Order in Europe.
The emphasis that is laid on the life of Paris during the period of military occupation is designed to show that French cultural life is flourishing as impressively as before the occupation. French singers are given objective praise as artists. French authors, playwrights and actors are encouraged. The French film industry, suppressed in the early days of the occupation, is now resuscitated and encouraged, whereby the German authorities indirectly claim credit as the rebuilders of French cultural life.
And they weren't the only ones. The Vichy Regime under the leadership of Marshal Pétain was from its very beginning more interested in restoring order in civil life out of considerations for their own power as well as for unproblematic collaboration with the Germans. As Robert Paxton describes in his standard work on Vichy, for them, chaos was something to be prevented instead of exploited as the ultimate weapon against Hitler. Pétain as early as June 13 (one day before the German occupation of Paris) advocated for the "natural defenders of France" by which he meant administrative carapace of France, from ministry down through prefect to village mayor, and of course army and police. The personnel of these agencies made it a matter of professional honor to serve. The new regime was the lawful successor to the old and there was work to be done. The state itself was regarded as a positive good in itself and thus had to keep running.
And this civil servants' sense of the state was reinforced by a general thirst for normalcy in the summer of 1940. During the time of the immediate aftermath of the shock of defeat, the establishment of the German occupation and especially the shortages that came with occupation, most people were immediately concern with a sort of day-to-day survival and with putting their lives back together.
Take for example Simon de Beauvoir describing how she hitchhiked back to Paris in July 1940: "For three weeks now I have been in a sort of limbo: vast public events brought their own individual, physiological agony, but I wanted to become a person again, with a past and a future of my own. Perhaps here in Paris I shall achieve this aim. If I can draw my salary, I shall stay for a long time." As Paxton writes:
Nearly everyone tried to get normal life going again. Refugees made their way home or sought shelter in a safer place. Families tried to get in touch. Around two million young Frenchmen in prisoner-of-war camps on French soil anxiously awaited release. A flood of job applicants wrote to Marshal Pétain. Alarmed at the level of unemployment, French economic officals worked to revive the economy. Businessmen turned to German Army contracts. (...) The most elementary prompting of normalcy in the summer of 1940, the urge to return to home and job, started many Frenchmen down a path of everyday complicity that led gradually and eventually to active assistance to German measures undreamed of in 1940. Delivering mail, repairing bridges, teaching schools, relocating refugess – everything that restored France to tranquility and order fulfilled the tacit Franco-German bargain to withdraw France form the war, socially intact, and to turn her engines inward.
But despite this massive political and social desire to return to a semblance of normalcy, the German occupation changed every-day life in many an impact-full way: Paris e.g. experienced a demographic change. Host to 40.000 German soldiers and the hotspot for German soldiers of the Wehrmacht to spend R&R time, the city was flooded with daily reminders of the occupier. And the occupier had money. German soldiers receiving special occupation money upon entering the country could spend said money, which functioned like a requisitioning paper, on things that many of them could have never have afforded before the war. Many an account of a war-time Parisian strongly features the "doryphores" (potato beetles) as the Germans were commonly known. In their letters home Wehrmacht soldiers reported their findings and asked their families fro more money to buy even more. And they bough everything. An ordinary private named Böll send home: four kg of Coco, a pound of butter, a kg of soap, several hundred sheets of fine paper for letters, French-made lace underwear, shoes, cosmetics, three kg of sugar, one kg of coffee, cheese, chocolate, and a fine par of calf leather motorcycle gloves. This happened to some degree with more than ten thousand German soldiers who visited France every month.
One of the far-reaching consequences of this behavior as well as the official German economic policy in France was the experience of shortages, rationing and the necessity of the black market for the ordinary French citizen. This problem was further compounded by the wage controls that the Germans introduced while at the same time causing inflation though the above mentioned behavior and the introduction of occupation money.
Rationing started fairly early: Beginning in August 1940, each citizen registered with their local suppliers – butchers, bakers, etc. This registration was then noted on a citywide level and ration cards were made available periodically, usually on a monthly basis, in the mairie, or town hall. A ration card determined how much of a type of food – in pounds of meat, for example – a person was allotted each week. The Germans were not interested in needlessly antagonizing the French, so food allotments were not intended to starve the local population. Nonetheless, hunger has been pointed to as perhaps the predominant feature of the Occupation since rationing simply could not meet demand.
In consequence, many a French citizen turned to alternative means in the black market, which became quite extensive quite quick. The countryside played the crucial role of supplier for the cities, supplementing the diet of town and city dwellers throughout the nation. This took place in a number of ways and one of the most immediate ones was the family. This often led to urbanites rediscovering country cousins who could provide them with much needed packages of food. These packages were known as colis familiaux. In 1942 alone, 13.5 million were mailed throughout France. Often this smaller market, sometimes called the marche amical, was based on barter economics, or even in some cases on the promise of future payment.
But the black market took on more forms, and beyond the immediate family was a massive opportunity for those in positions to exploit it. Crime in general spiked during the occupation and most notorious probably were the faux policiers, literally fake policemen, who were either policemen off the clock or other people who had acquired police uniforms and used them to extort bribes from people, requisite their food and belongings and prayed on shop owners and Jews especially.