France's political convulsion over labour market reform is likely to ease following President Chirac's decision to refer the government's proposed First Job Contract to negotiations between the majority party leadership, trade unions and employers which continued yesterday.
He has bowed to the huge protest movement by students and workers which saw millions more on the streets this week. He has also undermined the government's authority and signalled its passing from prime minister Dominique de Villepin to majority party leader Nicolas Sarkozy.
It is expected the unpopular law will be effectively withdrawn in these talks as students go on their Easter holiday. Young people resent being made the major targets of labour market reform, which needs to be extended throughout the working population. Many of them point out they would not be able to borrow or rent without a fixed contract and regard this as a particularly unfair law,which makes it easier for companies to sack workers during the first two years of employment.
France has a highly distinctive way of dealing with major structural reforms. Because of weak representation by trade unions and parliamentary institutions debate tends to get referred to the streets and become embroiled with political conflicts between the left and the right. The need for greater labour market flexibility is widely acknowledged; but argument runs deep about who should bear the burden of change and what international experience is most appropriate. France needs more time and care to consider whether British or Nordic models contain lessons to be learned. On the left a knee-jerk hostility to Anglo-American neoliberalism impedes rational discussion of these issues.
Inevitably, therefore, they become bound up with ideological and political conflicts between left and right. This is normal and should not surprise. But in France popular mobilisation accompanies political argument to an unusual degree. When a presidential election approaches the argument gets overlaid with personal competition for the most powerful position in political life. Everyone has watched this unfolding drama through that political lens. By agreeing to sign the new law into effect but refer its details to further parliamentary discussion President Chirac has publicly signalled Mr de Villepin's failure to tackle the youth unemployment question effectively and transferred political authority to Mr Sarkozy. No one in France fails to draw the relevant conclusion about who will stand for the Gaullists next year and which of these rivals can best tackle the issue.