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France's Embattled Government
By Economist.com
Mar 21, 2006, 13:28

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THE government of Dominique de Villepin, the French prime minister, held crisis meetings on Monday, March 20th, to try to head off a broadening of the student-led protest movement that has gripped the country for the past week. Union leaders were due to meet on Monday to decide whether to call for a general strike, after issuing Mr de Villepin with an ultimatum for withdrawing his latest labour-market reform. They refuse to talk to the prime minister, though representatives of students and unemployed young people met him on Monday. Mr de Villepin says that he will stand firm, though he also called in business leaders to discuss whether to soften the new law.

Further clashes broke out across France over the weekend. Some suggested that 1.5m protesters, ranging from students and their parents to trade-union leaders and members, took to the streets across the country—though police put the total at closer to 500,000. In Paris, there were more extraordinary scenes of violence on the Left Bank, close to the Sorbonne University, where fleets of police vans and well-armed officers have been blocking the faculty for the past week. Water canon and tear gas were used to break up the crowds of students, troublemakers and anarchists who chanted “Free the Sorbonne!” along with various anti-government slogans. Over 160 people were arrested, and seven police officers and 17 demonstrators were wounded.

These protests followed violence only two days earlier, on Thursday, which left 50 police officers injured and provoked more than 300 arrests. This week many universities remain blocked by sit-ins or disrupted by protests. There is a strange mix of both hostility and festival in the air. Many students, self-consciously using slogans their parents invented back in May 1968, seem to think they are reliving those événements. Many of the marchers have been defiantly festive rather than violent, with steel drums, whistle-blowing and dancing.

The students’ principal grievance is the contrat première embauche, or first job contract, devised by Mr de Villepin for those under 26. It would let employers shed workers without formal justification, though with notice and some compensation, during their first two years on the job. After that, employees would be protected under the same terms as standard permanent job contracts.

Although the aim is to encourage job creation in a country with 9.6% unemployment, resistance has been intense. Polls suggest that most French voters are against the new contract. One published on Friday showed 68% of those asked opposed it, with only 27% in favour. For the left, it has become a potent way to mobilise anti-government feeling. Even moderate trade unions are still refusing to talk to the government unless it scraps the contract, due to take effect in April. Some Socialist deputies have appealed to the Constitutional Council, the highest court, to get the law ruled unequal and so illegal. Jack Lang, a leading Socialist, has called on President Jacques Chirac to dissolve parliament.

So far, Mr de Villepin has stood his ground. Backed by President Chirac, he insists that he will not withdraw the contract, though he is prepared to talk about improving some guarantees for those who are fired. Among the ideas on the table this week are shortening the trial period from two years to one, and obliging employers to cite the reason for terminating a contract. But the prime minister looks increasingly lonely. His poll ratings have collapsed; in one published in Le Journal de Dimanche, a Sunday newspaper, on March 19th, he lost 15 points in the past two months, sinking to his lowest score since he was nominated last May. Just 37% of respondents declared themselves satisfied with his performance. Le Monde has accused him of “autism”. Even his own party has started to mutter about the doubtful wisdom of pressing on. Despite managing the Sorbonne evacuation, Nicolas Sarkozy, his interior minister and potential rival candidate in next year's presidential election, has been almost audibly quiet.

In the face of such hostility, each of the presidential hopefuls faces a delicate political calculation. Mr de Villepin, a careful student of French political history, has concluded that no prime minister who backs down in the face of street protest is ever rewarded by the voters. The events of May 1968 are not the only precedent. In the autumn of 1994 students clashed with Edouard Balladur, the prime minister of the day, over a minimum wage law. After fierce street protests, where police used tear gas and the demonstrations turned violent, Mr Balladur considered the political controversy had grown too great. Worried that his loss of popularity would hurt his campaign to become president, he gave in to the protesters—and was evicted in round one of the presidential election the following year. By contrast, Mr de Villepin may bet that, by standing firm, and waiting for another fall in unemployment, he will earn a reputation for courage that will outweigh the charge of political deafness.

But if the government does back down in the face of demonstrations, critics will see yet another example of a country unwilling to reform in the face of global economic challenges. France’s government is trying to discourage an Italian energy giant, Enel, from buying French rival Suez, and may use a state-owned investment fund to block future foreign takeovers. The French rejection of the draft European Union constitution last year, followed by the riots in the banlieues last autumn, suggest a widespread malaise in the country. Polls tell a similar story. Fully 70% told a CSA poll for Challenges, a magazine, earlier this year that future generations would live less well than they did today, and 72% thought that the French were unhappy.

© Copyright; Foundation for Economic Growth and various authors. Individual authors retain their own copyright.

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