April 3, 2006

Chirac party hints at softening on French jobs law

By Jon Boyle and Kerstin Gehmlich

PARIS (Reuters) - President Jacques Chirac's ruling
conservatives courted unions and students on Monday with hints
of fresh concessions over a disputed youth job contract on the
eve of new national strikes and protests.

Officials from the Union for a Popular Movement (UMP) said
they wanted speedy talks with opponents of the First Job
Contract (CPE), widely interpreted as a coded signal the party
is ready to make major changes to the law.

"We want an open dialogue with no taboos and no
prejudices," UMP spokesman Luc Chatel told a news conference on

"We need to get out of this crisis as soon as possible. We
are holding out our hand and want to renew dialogue."

Tuesday's demonstrations and strikes will be keenly watched
for signs that two months of sometimes violent protests have
peaked following March 28's nationwide day of action, which
unions say was joined by three million demonstrators.

Aimed at tackling high youth unemployment, the CPE is
intended to encourage employers to hire by allowing them to
summarily fire employees under 26 within a given period.
Critics say it will merely increase job insecurity.

Chirac said on Friday he would sign the contract into law,
but effectively ordered its suspension pending parliamentary
amendments to cut its maximum term from to one year from two
and give employees the right to know why they are being fired.

His move lessened the risk that Prime Minister Dominique de
Villepin, the contract's champion and thought to be Chirac's
favored successor as president, would resign. But it could
leave Villepin weakened as UMP leaders now seek a solution.

One potential winner is UMP party chief Nicolas Sarkozy,
who also harbors ambitions to lead the right in 2007
presidential elections and who may emerge as mediator of a
possible solution.


Patrick Devedjian, a key Sarkozy aide, said the party could
go beyond Chirac's concessions and make bosses give written
rather than verbal reasons for dismissal -- a clause that would
make it harder to sack workers under French labor law.

"Why not?" Devedjian told Les Echos daily. "There's no
point in getting hung up about it. It's a subject of debate
with the social partners. We are ready for a thorough

Critics said it was clear that Sarkozy was now in control.

"From now on, we have a virtual prime minister and a real
one. They've kept Dominique de Villepin in his post but
stripped him of all scope for doing anything," opposition
Socialist Party spokesman Julien Dray told reporters.

Bruno Julliard, president of the UNEF students' union, said
Sarkozy had told him in a weekend phone call that suspension of
the CPE was one of a number of topics now up for debate.

It was "very likely that a dialogue will be established" if
Sarkozy made clear the CPE would not be enforced and that talks
would not just be about amendments, Julliard told French radio.

Business group Medef has told firms to avoid the CPE
contract for now given the uncertainty over its future.

Former conservative prime minister Edouard Balladur, who
ditched an earlier attempt at a youth job contract in 1994
after street protests, said Chirac's move on Friday had
effectively killed the CPE off.

"It's gone, dead, everyone knows it -- one because it's not
being applied and two because it's been decided to overhaul
it," he told Europe 1 radio.