FRANCE is heading for deeper unrest after President Chirac refused in a television address last night to withdraw an unpopular labour reform and students and trade unions rejected concessions that he offered.

M Chirac promised a second law to modify the First Employment Contract (CPE), but the Socialist Opposition, student leaders and trade unions voiced fury that he had ignored their demands to withdraw it.

“This is not going to calm things,” François Hollande, the leader of the Socialist party, said after M Chirac’s five-minute speech. Bruno Julliard, the leader of UNEF, the main student union, said: “Perhaps he has a hearing problem. All he proposed was what we have heard for weeks. He has listened to nothing and we are heading for trouble.”

M Julliard urged all students to take to the streets in national demonstrations and strikes on Tuesday. Students yesterday halted rail and road traffic around Paris and several other cities.

More than half the 84 universities in France remained shut or disrupted yesterday, as well as hundreds of Lycées.

M Chirac had little room for manoeuvre when he addressed the nation after weeks of absence while Dominique de Villepin, his Prime Minister, forced through the youth employment law, provoking a revolt among students and leftists who see it as a betrayal of the welfare state.

In his television address, broadcast from the Elysée Palace, M Chirac said that he understood the concerns of the young, but that M de Villepin’s law was a worthy attempt to tackle a youth unemployment problem that runs at 22 per cent.

He would sign the CPE law into force in coming days, but had also asked M de Villepin to table a second Bill that would modify it. “A great number of lycées and universities are closed or paralysed. It is time to defuse this situation while being just and reasonable with the national interest at heart,” M Chirac said.

The law would be modified in two ways. The two-year trial period for workers under 26 would be reduced to one year and employers would have to explain their reasons if they dismissed a worker.

Opponents of the law said that this added nothing to proposals made by M de Villepin. An explanation for dismissal would still not make employers answerable to the draconian French labour laws, loaded heavily on the side of employees.

The Government lightened the effect of the regulations in order to encourage reluctant employers to engage inexperienced workers.

The broadcast was the President’s first attempt to reassert his authority amid the protests and an attempt to save the career of M de Villepin, an appointee with no electoral experience who forced the law through Parliament against the advice of ministers. M Chirac, whose ratings have sunk to their lowest level with one year left in office, argued that the nation could not be governed by protesters.

Opposition groups warned the President that he would “carry heavy responsibility by putting the law into effect” and said that it would be “an unacceptable show of force”.

M Hollande told M Chirac that if he promulgated the law, he would be taking a huge risk. “It is he who will be opening up a major crisis,” he said.

The CPE law has sparked a mutiny in which the young and the left are venting their wrath over what they see as the state’s failure to ensure that they enjoy the same welfare privileges as the older generation of workers.

M Chirac was said to have calculated that he must show firmness to save his credibility in his final year in office and to ensure that M de Villepin, 52, did not resign.

Many MPs in the President’s Union for a Popular Majority party have openly dissented, calling for the CPE law to be suspended.

Worker's Rights

• The Contrat première embauche (contract of first employment, or CPE) would create two-year positions for those under 26
• After Chirac’s speech, employers will be able to dismiss employees only in the first year and must give a reason for doing so
• Youth unemployment is 22 per cent because French labour law makes it difficult to dismiss even incompetent workers, resulting in a lack of vacancies
• The Government believes that employers would be more likely to take on staff if they had more flexibility
• Protesters say that the CPE would make workers feel insecure, while its proponents say it would create more employment that could become permanent
• The CPE is part of a wider equal opportunities law drawn up after riots in November. It was voted through parliament two weeks ago and cleared its last legal hurdle this week

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