The French government has capitulated to the protesters of the controversial and bitterly unpopular CPE. They caved in after thousands of people – many of whom would have been unaffected by the implications of the law anyway – took to the streets or went on strike in resistance to what seems to me an essential reform for their economy. If there was one problem with the CPE it’s that it was perhaps too discriminatory – why should only the under-26 be subject to the change? Other than this it seems clear that France needs this kind of change if it is ever going to create jobs for its people in the long term.
President Jacques Chirac says that the CPE will be replaced by ‘other measures’ to tackle youth unemployment. Oh. Well, job creation remains, to my mind, the most effective means of reducing unemployment. But what stifles job creation in France? The rigidity of their labour laws and the associated costs. So the best thing to do would be to free up French companies to hire and fire on a more flexible basis according to the cycle of their own business wouldn’t it? So what they need is a law designed to do this. A law like the CPE perhaps? Oops. Tried that and it didn’t work.
Back to the drawing board then I guess. All they’ve got to do is figure out the following: how to reduce unemployment without creating jobs. Good luck!