April 10, 2006

France scraps youth job law

By Elizabeth Pineau

PARIS (Reuters) - French President Jacques Chirac on Monday
scrapped a planned youth job law that provoked weeks of
protests, in a climbdown opponents celebrated as an unqualified

The move was a personal blow to Prime Minister Dominique de
Villepin, who had championed the First Job Contract (CPE) and
seen his popularity slump with the mass opposition and unrest.

In a televised statement, Villepin said he regretted that
weeks of strikes and protests showed the CPE could not be
applied but gave no details about his own political future, on
the line over his handling of the dispute.

"The necessary conditions of confidence and calm are not
there, either among young people, or companies, to allow the
application of the First Job Contract," Villepin said, adding
he would open talks with unions on youth employment.

Students had planned fresh marches for Tuesday and it was
unclear if they would call off their strikes and a blockade of
many universities and high schools after the announcement.

Villepin championed the CPE contract as a means of reducing
youth unemployment and saw his poll ratings plunge as
opposition to the measures mounted, damaging his chances of
becoming the ruling UMP party's candidate for president in
elections in 2007.

"The president of the republic has decided to replace
article 8 of the equal opportunities law with measures to help
disadvantaged young people find work," an earlier statement
from the presidency said.


The new measures include increased financial incentives to
employers to hire people under 26 who face the most
difficulties in getting access to the labor market, Employment
Minister Jean-Louis Borloo said in an interview with Le Monde

That would apply to approximately 159,000 young people
currently hired under government-subsidized job contracts and
the cost to the government would be around 150 million euros
($180 million) in the second half of 2006, Borloo said.

Those measures could be introduced in parliament as early
this week, a senior UMP deputy said.

France's youth unemployment stands at 22 percent and lack
of jobs is the country's number one political issue and a major
reason for weeks of rioting in poor suburbs late last year.

Chirac and Villepin were careful in their statements to say
that the CPE was being "replaced," but others called it dead.

"The players in the crisis have difficulty pronouncing the
words repeal. The CPE is dead, the CPE seems to be finished ...
and I think they must have the courage finally to say it
clearly," Julie Coudry, president of the student confederation,
said on LCI television.

Benjamin Vetele, vice president of the UNEF student union,
called on students to keep up the pressure.

"This is a first and decisive victory. There is reason to
be satisfied ... We call (on students) to maintain the pressure
now as we await the new law," he said on French radio.

Dominique Paille, a UMP deputy considered close to Interior
Minister Nicolas Sarkozy who had for weeks called for a
compromise on the contract, said: "The president of the
republic is withdrawing the CPE. It's a measure that
corresponds with what the entire population has been waiting

Sarkozy, vilified by many protesters, is the head of the
ruling party and a rival with Villepin for the party's
candidacy for president next year when Chirac is expected to
step down.

The opposition Socialist Party has yet to name its
candidate but stands to gain from opposition to the CPE.

A poll for Liberation newspaper showed Villepin's
popularity stood at 49 percent in the first week of January and
had fallen to 25 percent this weekend. Negative opinion of
Chirac rose from 56 percent to 64 percent over the same period.

The poll also showed 63 percent of voters said Socialist
ideas on reform were no better than those of the right.