FRANCE: President Jacques Chirac ended the two-month long crisis over a youth job law yesterday by "replacing" the disputed legislation with a proposal to provide financial assistance to companies hiring young people in difficulty.
The First Job Contract (CPE) was announced by prime minister Dominique de Villepin in January, and precipitated two months of strikes, demonstrations and sometimes street violence. Mr de Villepin earlier swore he would not allow it to be withdrawn, suspended or "adulterated".
Mr Chirac met with the ministers and parliamentarians who had worked to end the crisis at the Élysée Palace yesterday morning to tell them of his decision. The atmosphere in the meeting room was funereal. Tension between the interior minister and head of the UMP party Nicolas Sarkozy and the president and prime minister was likened to that of cabinet meetings during "cohabitation" between left and right.
Having created the crisis, Mr de Villepin was determined to announce its dénouement himself.
"The necessary conditions of confidence and serenity are present neither on the side of the youths, nor on the side of businesses, to make it possible to apply the First Job Contract", he said.
"I proposed to the president of the republic, who accepted it, replacing article 8 of the law on equal opportunity with measures in favour of professional placement for youths in the greatest difficulty."
A parliamentary debate and vote on the new law is to take place this week. Rather than allow employers to fire young people more easily, it will provide government funds - €450 million over two years - to those willing to hire youths from disadvantaged backgrounds.
"The crisis reveals social anxiety as much for a desire for modernisation," Mr de Villepin said. "The challenge is to give each individual his place, create jobs, create growth. The challenge is to preserve our social model while adapting it."
Unemployment among 16 to 26-year-olds is 23 per cent in France, six points above the European average. Among those without qualifications, it rises to 40 per cent.
Despite the "replacement" of the CPE, 25 universities and 50 lycées were still disrupted last night. However, students at the university of Rennes, which was the first to shut down six weeks ago, voted to resume classes, as did Lyon. Karl Stoeckel, the president of the lycée students union UNL called the government climbdown "a historic victory of the young after a historic attack on them, and a historic mobilisation". The trade unions and student groups which organised five general strike days voted to maintain pressure until the replacement law is voted by the national assembly this week.
Some unions and student groups are now demanding that the entire law on equal opportunity - not just the CPE - be rescinded. They object to apprenticeships for 14-year-olds, night work from the age of 16 and the withholding of welfare payments to families who do not discipline their children. They want to reverse the CNE, a job contract enacted last August which allows small companies to impose two-year trial periods.
"At last, the CPE has been withdrawn" said François Hollande, the leader of the opposition socialist party. "Regardless of the words used, it is in fact an abrogation; the government backed down."
In an interview on television last night, Mr de Villepin said the government had "to find a way out of the blockage" the country was in.