France to scrap new jobs law

Paris, (France): The French government has climbed down on a controversial youth job contract that brought weeks of protests and strikes in a move seen as a major blow to the country's embattled Prime Minister Dominique de Villepin.

President Jacques Chirac announced the decision on Monday, capitulating to pressure from students and unions who rallied more than a million people onto the streets in nationwide demonstrations.

De Villepin, a protege of Chirac, made an address on national television to express regret over the failure of the law that would have made it easier to hire and fire workers under the age of 26.

His retreat was welcomed as a victory by student and union groups, who had planned more action on Tuesday.

The prime minister introduced the "first employment job contract," or CPE in French, after riots last fall exposed severe youth unemployment, now at 22 percent.

"I wanted to act quickly, because the dramatic situation and the despair of many youths demanded it," a somber De Villepin said in his televised address.

The prime minister said he had sought a "better balance ... between more flexibility for the employer and more security for workers," according to the Associated Press.

"This was not understood by everyone, I'm sorry to say," he said.

The protests over the labor law have been politically damaging for De Villepin who has seen his approval ratings plummet by half from nearly 50 percent.

Business leaders also expressed concern that the unrest was harming France's economy.

At the height of the demonstrations, he was sidelined in efforts to broker talks, with Interior Minister Nicolas Sarkozy -- a presidential hopeful -- taking the helm.

But, according to Chirac, new measures in the stead of the controversial clause had come at the suggestion of De Villepin.

Unveiling details of the replacement, Bernard Accoyer, the head of the ruling UMP party, said the government would introduce policy that would directly help the chronically unemployed.

"We realized the situation had become worrying, serious and dangerous for each and every one of us," he said.

PAGE_BREAK

"We felt that by finding a replacement that was clear and quick, we would concentrate our efforts on fighting for the young people in the most difficulty.

Accoyer said wider measures to reform France's employment laws, which enshrine job security but fail to reward productivity, would only come with wide consultation of workers and labor groups. .

De Villepin also said he was concerned about the impact of the protests on students.

"It's likely to threaten the end-of-year exams. The demonstrations in the streets certainly placed young people in a dangerous position," he said.

The CPE would have allowed employers to fire workers 26 years old and younger at any point during their first two years on the job. Young people and unions responded bitterly, arguing that the measure would rob them of current job protections.

Chirac signed the labor act into law April 2, but then said he wanted its implementation suspended so that it could be amended by cutting the term from two years to one year and requiring that workers be given a reason for their firing.