French jobs law crisis exposes political paralysis

By surrendering to the street, French President Jacques Chirac is all but acknowledging that his government is powerless to push through even a minor labour reform that many call a necessary first step toward ensuring that France thrives in today’s global economy.

While his move yesterday averted the current crisis, it punishes his prime minister and favoured successor, and fails to solve the deeper problems of a country adrift.

The forces of the status quo won this battle, raising questions about France’s ability to enact more ambitious reforms that many experts feel are needed to help its companies compete with the likes of China and India in years to come.

Chirac’s decision to jettison a disputed jobs contract making it easier to fire young workers effectively buries any of the government’s plans to shake up the system, at least until after presidential elections a year away.

The president’s choice was a tough one. Holding firm would have risked even more of the protests that were turning violent, scaring tourists and paralysing schools nationwide.

The French employers' group Medef grudgingly welcomed “the end to a crisis that has damaged the credibility of our country”.

Even critics of the jobs law admit that the system is ailing, but the student protesters and labour unions say the antidote is more government help, not less.

Economists say that’s what is dragging France down as other countries reform to boost competitiveness, that and the strikes and protests that French workers see as a crucial democratic right.

The crisis also exposed French voters’ lack of faith in their leaders. Polls show an overwhelming 83% of respondents thought the stand-off had weakened Chirac. As he faces what is probably the last of his 12 years as president, it is a sobering number that could leave a mark on his legacy.

“I don’t think that it is impossible to carry out reform in France. The real crisis is a crisis of confidence,” said political analyst Dominique Moisi.

“The French do not condemn reform. They condemn their elite and they condemn the manner in which the reform was imposed on them,” he said.

Villepin hastily crafted the law as a partial response to riots last autumn in poor suburbs, blamed partly on staggering youth unemployment, but also to shake up rigid labour laws that burden companies.

He enraged labour leaders and student groups by strong-arming it through parliament and staring down protesters for weeks, refusing to negotiate.

Chirac then tried to smoothe his way out of the crisis. He decided to sign the law but immediately order revisions. Critics said it wasn’t enough, and yesterday Chirac’s office said the law would be “replaced”, carefully avoiding the terms “repeal” or “withdrawal”.

But the result is the same: the job contract is dead. So, many predict, are Villepin’s chances for next year’s presidential election.

“The defeat is extremely serious for the prime minister. It will be difficult for him to regain credibility and clout and to be a candidate for the next presidential elections,” Moisi said.

The only government member to emerge unscathed, perhaps strengthened, from the crisis is outspoken Interior Minister Nicolas Sarkozy, Villepin’s chief rival and leading contender for the 2007 vote.

The stand-off has also mobilised and re-energised the long-splintered left, and revived debate about the people this reform was meant to target: the youths whose poverty and alienation drove the riots.

Chirac’s decision came after the governing party huddled for days with labour leaders and worked out new measures that focus specifically on “troubled youth”.

Jacques Capdevielle, of the prestigious Institute of Political Sciences, says the chances for sweeping reform are not dead as long as dialogue continues.

“We are talking about what is wrong, and how to fix it,” he said.