France is in the midst of transition from a well-to-do modern economy that has featured extensive government ownership and intervention to one that relies more on market mechanisms. The government has partially or fully privatized many large companies, banks, and insurers, and has ceded stakes in such leading firms as Air France, France Telecom, Renault, and Thales. It maintains a strong presence in some sectors, particularly power, public transport, and defense industries. 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.
Widespread opposition to labor reform has in recent years hampered the government's ability to revitalize the economy. In 2007, the government launched divisive labor reform efforts that will continue into 2008. France's tax burden remains one of the highest in Europe (nearly 50% of GDP in 2005). France brought the budget deficit within the eurozone's 3%-of-GDP limit for the first time in 2007 and has reduced unemployment to roughly 8%. With at least 75 million foreign tourists per year, France is the most visited country in the world and maintains the third largest income in the world from tourism. |
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