France is in the midst of transition, from an economy that featured extensive government ownership and intervention to one that relies more on market mechanisms. The government remains dominant in some sectors, particularly power, public transport, and defense industries, but it has been relaxing its control since the mid-1980s. The Socialist-led government has sold off part of its holdings in France Telecom, Air France, Thales, Thomson Multimedia, and the European Aerospace and Defense Company (EADS). The telecommunications sector is gradually being opened to competition. France's leaders remain committed to a capitalism in which they maintain social equity by means of laws, tax policies, and social spending that reduce income disparity and the impact of free markets on public health and welfare. The government has done little to cut generous unemployment and retirement benefits which impose a heavy tax burden and discourage hiring. It has also shied from measures that would dramatically increase the use of stock options and retirement investment plans; such measures would boost the stock market and fast-growing IT firms as well as ease the burden on the pension system, but would disproportionately benefit the rich. In addition to the tax burden, the reduction of the work week to 35-hours has drawn criticism for lowering the competitiveness of French companies....
