Chirac bids to quell French jobs crisis

President Jacques Chirac sought to defuse one of the biggest crises of his 11-year presidency by offering to soften a new type of job contract that has sparked furious protests because it would make firings easier.

But Chirac’s proposals to make the contract more palatable only appeared to redouble the determination of union and student leaders who had called on him to withdraw and not simply adjust the measure designed for workers aged under 26.

Having brought more than one million demonstrators onto French streets this week, they renewed strike-calls for next Tuesday.

In a highly-anticipated televised address, Chirac said that the contract’s trial period, during which employers could summarily dismiss a young worker, would be reduced from two years to one.

Employers would also have to offer reasons for firing, he said, something the original law didn’t require.

“It is time to unblock the situation by being fair and reasonable,” said the 73-year-old president, inviting labour and student leaders to “take their full part” in discussions on his proposed new version of the contract.

They had spurned further negotiation as long as the so-called “first job contract” remains on the table, and were immediately dismissive.

“We don’t want to negotiate…We don’t want it at all,” said Bruno Julliard, head of the largest students’ union, on TF1 television. “The president had the chance to give a clear answer, which he didn’t do.”

“It’s despite everything the first job contract. Perhaps a lightened version of the contract, but it is the contract,” said labour leader Gerard Aschiere, adding that Chirac “didn’t respond to demands of millions of workers and youth”.

The contract was among a raft of government measures drawn up in the wake of rioting in depressed suburbs last fall that laid bare the chronic problem of youth unemployment, especially among those with few qualifications and from immigrant backgrounds.

Nearly one French youth in four is unemployed, the highest rate in western Europe and more than double the national average. In the suburbs hit by rioting, youth unemployment rates run as high as 50%.

Chirac had little room for manoeuvre. Abandoning the contract would have been a mortal blow for Prime Minister Dominique de Villepin, its champion and a Chirac loyalist, and for the wider cause of reform in France. But in playing to all sides Chirac may simply have prolonged the crisis.

“When people have taken to the streets, you need a symbolic measure to get them to go home again. Here, we have something that is incomprehensible,” said analyst Jean-Luc Parodi, director of the French Review of Political Sciences. “It’s absurd.”

Villepin, hoping that quick successes against unemployment might strengthen his chances of becoming the conservative camp’s candidate to succeed Chirac in elections next year, led the charge to loosen labour laws that make firing workers costly and difficult.

He argued that giving companies greater flexibility, allowing them to fire young workers if the job doesn’t work out, would spur hirings, giving youths vital work experience that could help them get more permanent contracts down the line.

In his address, Chirac backed Villepin on that point, saying that first job contract “can be an effective tool for employment”.

“The time has come to move forward,” said Chirac. “We must work together to end this shocking situation whereby companies, out of fear of excessive inflexibilities, prefer to refuse an order or to move overseas rather than hire, even when so many people are trapped in unemployment.”

Villepin’s determination to act quickly after Chirac appointed him last May was a catalyst in the crisis over his youth contract. He drafted it without consulting beforehand with France’s powerful unions and rammed it through parliament using a special measure to bypass debate.

The contract touched France’s deep fears about job security and that its country’s cherished labour protections may not survive in the highly competitive globalised economy if workers don’t fight for them.

Students fear that the contract will turn them into disposable workers, little better off than counterparts in China and India where wages and protections are far lower.

Before Chirac’s speech, hundreds of students converged peacefully on the Place de la Bastille in Paris to demand that he not enact the law.

After Chirac spoke, hundreds of students and other protesters peeled out across Paris, shouting epithets and provoking police, who shot back with tear gas outside the National Assembly.

Students railed against Chirac in front of the Louvre, mounted the steps of the Opera Garnier, and darted in front of cars on the Left Bank before heading to the Sorbonne, the epicentre of earlier violent protests.

“He should have ended this conflict,” said Francois Hollande, leader of the opposition Socialist Party. He urged protesters to remain calm. “Everyone must be responsible, because the president has not been.”

Chirac said that no new youth contracts would be signed until his proposed modifications have been included.

That effectively suspends the measure, even though Chirac said he would sign it into law, a move that appeared aimed at trying to appease both labour leaders and his own interior minister, Nicolas Sarkozy, another conservative gunning for the presidency.

Sarkozy had strayed from the government line in recent days, suggesting that Villepin should suspend the contract to allow for talks with unions.

The rivalry between Sarkozy and Villepin is intense and in trying to find a way out of the jobs law crisis, Chirac seemed to be steering a middle ground between the two.

Sarkozy, making clear that he is back on board, welcomed the “wise decision” and urged unions to seek a compromise.