[gilligan]

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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

http://quote.bloomberg.com/apps/news...jJ8&refer=home

[Mr Skinner]

Well...some call it pussying out, others call it democracy...after all the majority of the people have spoken against the law...

[gilligan]

now the youth of france can have jobs and not worried about getting fired. with no reason to work hard, france will continue to go down the toilet.

jobs should be earned, not guaranteed.

[Mr Skinner]

I know...there's always a backside to the medal...but even employers went out and criticized the law. But it's not completely dead if I got it right...it's in for revision...

[Tasha]

I hear no one is starting new businesses in france cause no one can work overtime.

It's really fucked up

ah well, still would LOVE to visit the country..

[Ta'veren]

if it weren't for the french there would be no america, so they aren't all that bad

[Tasha]

France is a nice country.

It's only ignorant TOURISTS that piss them off.

If you do a little research before you travel somewhere, know some of the customs atleast and try to speak the language (albiet badly...) the locals will love you.

[gilligan]

Originally Posted by The_Shootist

France is a nice country.

It's only ignorant TOURISTS that piss them off.

If you do a little research before you travel somewhere, know some of the customs atleast and try to speak the language (albiet badly...) the locals will love you.

that has nothing to do with their social and economic system, diplomat tomo.

[Tasha]

Show me wehre I said it was.

I'm waiting.

Their economic system is shite.

We all know that.

honestly, if I seriously wanted to work more than 35 hours a week but couldn't cause some police man would come and take me away, than obviously something is wrong with the sysem.

"But officer, I WANT to work!"

"No no, 35 hours ONLY!"

^^^ something is wrong there, maybe a hint to the french taht something is wrong is when more than half of your citizens are doing nothing from 4 to bed but sit out one of those cafe patios and drink coffee.

[AnnonUSA]

Those Guys are Pussies!

[TheBagman]

Originally Posted by gilligan

french puss out, again

What's new?

[gilligan]

i was being sarcastic the french are just a notch above us stupid americans.

[Mr Skinner]

I'm just waiting for the day the statue of liberty gets blown up...I'll know who did it

[Slutter McGee]

Originally Posted by The_Shootist

France is a nice country.

It's only ignorant TOURISTS that piss them off.

If you do a little research before you travel somewhere, know some of the customs atleast and try to speak the language (albiet badly...) the locals will love you.

Thats pretty fucking stupid for a country that relies on tourism as a primary form of monetary gain.

Well...some call it pussying out, others call it democracy...after all the majority of the people have spoken against the law...

This is why democracy sucks. An ignorant majority having a say in business that they don't know shit about. Thats why the US is a republic, not a true democracy. Could you imagine what would happen after the Mexicans breed and take over, if the power of the majority was the power to make law.

Slutter McGee

[Mr Skinner]

Originally Posted by Slutter McGee

This is why democracy sucks. An ignorant majority having a say in business that they don't know shit about. Thats why the US is a republic, not a true democracy. Could you imagine what would happen after the Mexicans breed and take over, if the power of the majority was the power to make law.

Slutter McGee

Lol

Republic is derived from latin: res publica means people's rule...just as democracy

Well...it would eventually balance itself out. Look at Switzerland: They got direct votes when it comes to important issues. It doesn't get any more democtatic than that. And I'd say they're doing pretty well, innit? But of course I gotta admit: That works for a tiny country with strict immigration laws, not for a giant country like the USA.