Posted on 04/10/2006 6:51:44 AM PDT by XR7
LONDON (MarketWatch) -- Bowing to pressure from students and unions, French President Jacques Chirac on Monday unveiled plans to scrap a controversial youth-labor contract that spawned weeks of strikes and led to a complete political stalemate. The first-job contract, also known as CPE, will be replaced by an initiative focused on youths from troubled backgrounds. "The president of the republic has decided to replace Article 8 of the law on equal opportunities with measures in favor of the professional insertion of young people in difficulty," a statement from Chirac's office said. The move comes as a terrible blow to Prime Minister Dominique de Villepin, who introduced the CPE and vowed to stand firm regardless of pressure from students and the unions. The CPE would have made it easier for companies to hire and fire workers under 26. It was introduced to tackle France's number one social problem: that one young person in five is unemployed. Its opponents claimed it would have created systemic insecurity by making it more difficult for young workers to get a mortgage, for instance. In addition, they said the CPE would scupper France's founding principles of solidarity and equality by treating workers differently depending on their age. De Villepin's authority has been gravely damaged by the crisis and he may not recover from the government's latest turnabout. He is scheduled to speak later Monday. At 25%, his approval rating has halved since December, according to a poll by Institut LH2. Chirac, 73, also likely won't emerge unscathed from a confrontation that fanned weeks of disruptions at universities and demonstrations gathering 1 million to 3 million people. He begins his 11th year as president next month with approval ratings at three-year lows. Chirac alienated some of his supporters earlier this month when he decided to enact the law but immediately suspended it to give lawmakers the chance to meet with unions and find a way out of the crisis. Former president Valery Giscard d'Estaing criticized Chirac's strategy in an interview with French newspaper le Journal du Dimanche. "It's high time to exit this quagmire,'' he wrote in an article describing it as "heart-wrenching'' to see France in such disarray. "The enemies of France have viewed these images with delight, and her friends with consternation." Some economists deplore the impact the recent crisis has had on France's image abroad and worry that it will discourage investment. "With the refusal of the CPE and the confirmation that France is incapable of carrying out reforms, more and more companies are going to continue or start to invest and hire massively....abroad," Marc Touati, an economist with Natexis Banques Populaires wrote in a note to clients. He added that while investment in France reached 40 billion euros in 2005, it could fall by 10 billion in 2006. "Given the recent events in France, foreign companies would really have to have become altruistic to invest heavily in France," he said. Emmanuel Ferry, chief economist at Exane, doesn't see such a significant impact on investment, but he agrees that the CPE crisis had blemished the image of France further. "The main consequence of this story is that of the impact it will have on the political landscape in the 2007 general elections. Until then, the capacity to carry out any reform has been annihilated," he said. He added that thankful the markets have been little influenced by the recent political deadlock. "But the CPE crisis is yet another symptom of the social, political and institutional malaise France is experiencing," Ferry concluded. Aude Lagorce is a reporter for MarketWatch in London.
ROFLOL! Reading the article I kept thinking: "Cheese eating surrender monkeys do it again." Then I scrolled down to your post and there was the thing itself!
LOL
This was no surprise. This is the way things happen there. Near dictatorial approaches to legal stuff are counterbalanced with strikes.
Doesn't mean it wasn't a good or bad thing. Just that the people who could mobilize people into the streets didn't want it.
French method of doing government.
Now, if they want a society where young people have great difficulty getting jobs, unless they are among the elite, well, they will reap the whirlwind later on.
Mobocracy.
And the spineless saga continues....
The key economic fact in the article is that the markets in France have not been seriously affected.
International investors are not altruists. They invest where they can make money and do not give a damn about the underlying political structures so long as they can keep making money.
France does not now have the CPE, and foreign investment has been rolling in anyway. The government proposed the CPE, it has been rejected after political turmoil...and markets were not affected. Now, you have some big internal partisans for CPE waving the bloody flag and screaming about how nobody will invest in France.
But the truth is that foreign investment in France was robust before the CPE under the current laws, and the markets were not affected by the dispute, and foreign investment is not going pour out just because the French opted to maintain the status quo.
The capital investors worldwide don't care about the CPE.
It was a bad law, and it's gone now, and it won't make a difference. French economic growth remains on track at about 2% for 2006. All of the screaming and yelling is political, not economic.
International investors are cold-blooded rational capitalists who care about the bottom line. And the bottom line is that the CPE was, is, and will remain irrelevant to them. France is still a good place to make money, so they will continue to invest there, as before.
The political classes on all sides will wave the bloody shirt some more, no doubt, and predict meltdown and The End Of The World As We Know It, but the capitalists who actually make the markets are not impressed.
This shows that the Fwench have bought socialism hook, line and sinker....now they have become a bunch of spoiled rotten adolescents.
There will be a price to pay.....
As we deal with Iraqi transgressions
The French haven't learned Chamberlain's lessons
At one time we thought they were allied with us
Now we don't give a damn if they're hit by a bus
Cheese-eating surrender monkeys…that is what they have become
Cheese-eating surrender monkeys…oui, oui…the French are such scum
Thanks to us they are not speaking German
They are giving new meaning to vermin
At one time we thought they were allied with us
Now we don't give a damn if they're hit by a bus
Cheese-eating surrender monkeys…that is what they have become
Cheese-eating surrender monkeys…oui, oui…the French are such scum
We don't need their wine…they are deluded
Napa Valley's just fine, we've concluded
At one time thought they were allied with us
Not we don't give a damn if they're hit by a bus
Cheese-eating surrender monkeys…that is what they have become
Cheese-eating surrender monkeys…oui, oui…the French are such scum
Oui, oui…the French are such scum
Magnifique!
(as usual)
If you listen to fools...the mob rules.
Wow! Just 15 posts and this thread gets pulled from the sidebar!
The Admin. Moderator must be French.
France - where surrender is an art
Answer....Ashland in Kent, England.
(Because it's the first stop on the Paris to London express.)
I have a slight quibble. True, CPE does not yet exist so investment in France is no worse now than before. But general unemployment of 11-12% and youth unemployment of 20% does indicate serious under-investment in the French economy largely because of it's extreme pro-labor, anti-business national agenda for the last several decades.
It's like the USA was in the 1950s. You were either pro-labor or pro-business, not both. Perhaps it was the brilliance of 401-k plans that made investors out of tens of millions in the workforce that helped us see in simple terms that healthy vibrant businesses are the only secure source of good jobs and full employment.
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