Chirac Scraps Youth-Labor Law, Bowing to Protests

Aristartle · Apr 10, 2006

Chirac Scraps Youth-Labor Law, Bowing to Protests (Update3) April 10 (Bloomberg) -- French President Jacques Chirac scrapped a labor law intended to reduce youth unemployment after two months of protests by union leaders and students.

Chirac replaced the law with a plan to curb joblessness among young people, which was 22.2 percent in February, more than double the overall rate of 9.6 percent, according to a statement he issued in Paris today.

The failed attempt to loosen labor rules marks a setback for Prime Minister Dominique de Villepin and may spoil his chance to succeed Chirac in next year's presidential election. Executives and economists say Chirac's inability to enact rules intended to encourage hiring and firing may deter investment and curb economic growth, which slowed to 1.4 percent last year.

``Companies that may have planned to create jobs here are not going to do it,'' said Marc Touati, chief economist at Natexis Banques Populaires SA in Paris. ``If companies don't feel France is going to be reformed, companies are going to go where the labor market is more flexible.''

Touati said in an interview that strikes and protests will reduce economic expansion by at least 0.1 percentage point per quarter this year. The Organization for Economic Cooperation and Development forecasts French growth of 0.5 percent in each of the first two quarters, lagging behind the 0.6 percent prediction for the dozen countries sharing the euro.

Production Decline

Also today, the government said French industrial production unexpectedly fell in February. The 0.9 percent decline contrasted with reports last week showing manufacturing and services in the euro region expanded at the fastest pace in more than five years in March.

France's benchmark CAC 40 stock index declined 0.4 percent as of1:05 p.m. in Paris. Europe's Stoxx 600 was little changed.

De Villepin presented the law known by its French acronym CPE in January as a way to make the labor market more flexible to promote hiring. Opponents protested to provisions that allow workers younger than 26 to be fired within two years for no stated reasons. Students, saying it reduced job security, disrupted classes or blockaded universities.

More than 1 million demonstrated on both March 28 and April 4 and police used tear gas and water cannons in Paris to disperse gangs of youths who burned cars, broke shop windows and beat up some of demonstrators.

`Many Losers'

``There are many losers in this whole situation,'' said Francoise Cocuelle, 44, head of an association of entrepreneurs and president of a 15-person printing company in Chantilly, near Paris. ``Companies in this country are the first ones to lose as they need flexibility. In terms of image, this was disastrous.''

The approval ratings of Chirac and de Villepin collapsed as opposition intensified.

The Confederation Generale du Travail, France's second- largest labor union, claimed ``victory'' over Chirac and de Villepin in a statement today in Paris.

``The necessary conditions of trust and serenity don't exist, either among the youth, or among companies, to allow an implementation of the CPE,'' de Villepin told reporters today.

The government will replace the CPE with government- subsidized job programs and training, and temporary subsidies or tax breaks for companies unskilled hiring youth workers on permanent contracts, Labor Minister Jean-Louis Borloo told Le Monde. The cost of the measures will be about 150 million euros ($182 million) for the second half of the year, Borloo said.

`Fruitless Confrontations'

The retreat may also benefit Nicolas Sarkozy, the head of the governing UMP party and the majority's leading presidential hopeful, who criticized the Prime Minister's go-it-alone method. On March 27, Sarkozy said labor laws should always be discussed with unions before being pushed through Parliament to avoid ``fruitless confrontations.''

Chirac begins his 11th year as president next month with approval ratings at 25 percent, the lowest in at least three years, according to a survey by Institut LH2.

The Institut LH2 poll showed Chirac's approval rating was the lowest in at least three years at 25 percent and his disapproval rating 64 percent, the most since June 2005 when France rejected the European Union constitution.

De Villepin's approval rating was 25 percent, half the level in December, and his disapproval rating 65 percent, the most since he replaced Jean-Pierre Raffarin as prime minister in May 2005.

Chirac has caved to street protests in the past. As prime minister in 1986, he withdrew an education bill after a student died in clash with police during demonstrations. In 1996, during his first presidential term, he revoked a law overhauling the pension and welfare system after three weeks of strikes in the transport system crippled the economy.

Medef, France's largest business federation, said in a statement today that it ``hopes'' the withdrawal of the CPE ``marks the end of a crisis that dented'' France's credibility.
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The voice of youth has spoken, and spoken in the name of change and solidarity. Dream on kids.

matthew · Apr 10, 2006

Aristartle said:

The voice of youth has spoken, and spoken in the name of change and solidarity. Dream on kids.
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I never understood what the 'beef' was ?? was it ''completly unfair'' ?

I read today that it was a misunderstood 'labour law'

After triggering strikes and protests, the law appears to be taking a toll on De Villepin. He was dealt a further blow with the decision, announced on Saturday, to place the new measure in the hands of Parliament -- not the government.

De Villepin was criticised for being intransigent in insisting on keeping the law, which is aimed at encouraging companies to hire youths under 26 by making it easier to fire them.

"There is misunderstanding and incomprehension about the direction of my action. I profoundly regret it," he told Le Journal du Dimanche. Asked if he had made mistakes, he replied: "Of course, in all political action there is some error."

But, he added: "The main error, the only one that would have been unforgivable, would have been to do nothing against the mass unemployment in our country."

http://www.mg.co.za/articlePage.aspx?articleid=268368&area=/breaking_news/breaking_news__international_news/

http://archive.wn.com/2006/04/02/1400/francedaily/

I reckon.. i'll leave em' to it.. seems to complicated

Inquiring-Mind · Apr 10, 2006

this just proves collective power works....

matthew · Apr 11, 2006

Aristartle said:

you should read previous posts about the issue. I've already made comments about my opinions on the situation.
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I'll look ... bit lazy .. oh yes lazy i say.

Pointbreak · Apr 19, 2006

The students have successfully fought to preserve the right to high unemployment rates.

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Chirac Scraps Youth-Labor Law, Bowing to Protests

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Chirac Scraps Youth-Labor Law, Bowing to Protests

Aristartle Snow Falling on Cedars Lifetime Supporter

matthew Almost sexy

Inquiring-Mind Senior Member

matthew Almost sexy

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