French reforms: Le climbdown

France's government duly caves in to protesters against its labour reforms

THE French government this week did what French governments do best: it caved in to massive street protests, and binned a controversial reform. On April 10th President Jacques Chirac announced that he would "replace" the youth job contract that had provoked nine weeks of student and union-led protests on streets and university campuses across the country. His decision buried the contrat premiere embauche (CPE)--and with it any hopes of loosening France's rigid labour laws.

A drawn-looking Dominique de Villepin, the prime minister, promised instead some new measures for "young people in difficulty". These will include more youth training, and financial incentives for employers to recruit unqualified youngsters on permanent contracts. In short, out goes any idea of rewriting the labour law, and in come even more subsidised jobs. By explicitly targeting only young people with no qualifications, the troublesome students are left alone. Triumphant trade unions agreed to suspend their protests, as did most of the students.

Politically, it was a humiliating climb-down for both Mr de Villepin and Mr Chirac. To the last, the prime minister had tried to stand firm, insisting that he would not bow to pressure from the street, as so many previous prime ministers have done under the Fifth Republic. The CPE, he argued, would encourage job creation by giving employers the flexibility to terminate contracts within the first two years. He agreed only to amend the law, as Mr Chirac had asked parliament to do ten days earlier.

But Mr de Villepin faced not only growing demonstrations--the latest two days of strikes and protest marches had each drawn some 1m-3m people. He also had to contend with less controllable forms of protest. Over the past couple of weeks, there have been mass invasions of railway stations and airports, such as Paris's Gare du Nord and Orly airport, as well as road blockades. Many universities have been closed for over a month. There was concern about radicalisation and the risk of further violence. One car outside the Sorbonne, in Paris, was overturned by student protesters, with its driver inside, after it appeared deliberately to have steered into a group of them. As the sense of crisis grew, Valery Giscard d'Estaing, France's only living ex-president, urged the government to move. "It is high time to get out of this mess," he wrote in a Sunday newspaper.

The immediate troubles are now likely to die down. Parliament is expected to vote the new measures into law quickly, bringing an apparent end to the sorry fiasco. But, as France digests the events of the past two months, what lessons will it draw? Already, some are wondering if the country will ever be able to reform. Successive governments have given in to mass street protests; in 1986, in 1994, in 1995, and now in 2006. If a relatively limited liberalisation of part of the labour code provokes such resistance, goes this line, what hope is there of bolder change?

That question especially bothers Nicolas Sarkozy, the interior minister and front-running centre-right presidential hopeful. This week, he repeated his call for a "rupture" with the past, arguing in an interview with Le Figaro that "big changes are indispensable". But perhaps the French are just not up to the sacrifices that change imposes. The most commonly cited reason for the difficulty of reform, said a poll in Liberation this week, is "the state of mind of the French".

Yet an alternative explanation is that the case for change has never been well put. In 1995 Alain Juppe, prime minister and architect of a bold set of reforms, came across as an arrogant technocrat. He capitulated after paralysing winter strikes. This time, Mr de Villepin mistakenly chose to ram his CPE through by decree, with neither a full parliamentary debate nor any consultation with the unions. As an unelected former diplomat, he was perhaps not in an ideal position to bypass the people's elected representatives.

His difficulty is that, had he consulted more widely, he might not have succeeded in getting the CPE through at all. His predecessor, Jean-Pierre Raffarin, spent so much time consulting that most of his proposals for reform ended up diluted. Even his 2003 pension reform, which was carefully negotiated with the unions, did not go far enough. By definition, consensus-seeking, which has long been Mr Chirac's overriding concern, is not easy to square with unpopular reform.

After Mr de Villepin's tumble, Mr Sarkozy now looks the right's most likely candidate in the 2007 presidential election. But does he have a secret prescription for reform? He has always argued, as he did again this week in Le Figaro, that reform "will only be accepted by the French if it is seen as just." The perception of fairness in carrying out change is, he argues, as important as the change itself. So he advocates, for instance, limiting to six months the lay-off procedures that can currently drag on for years; in return, he would boost lay-off payments. "The French accept making an effort," he insists, "on the condition that they understand what they will gain in return." If he is right, the necessary political skill is to extract more from the effort than is offered in exchange, but without appearing to do so. Mr de Villepin's undoing was his failure to get that delicate balance right.

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