Tuesday, April 11, 2006

French students have won

Chirac has decided yesterday to replace the controversial CPE law by a proposition to help young people in difficult situation to find a job. This victory was hailed in left wing parties, unions and students and with their renewed vigor, some of the most extremists ones now want to tackle the CNE that was voted a few months ago (basically, the same law as the CPE but for SMEs ) but the movement seems to be loosing pressure, at least in the universities.

I was not really in favor of that law, especially since it created an unfair discrimination against the young people. In my opinion, a single contract for all private sector employees allowing for more flexibility during a one year period would have been much better but I reckon it would have been quite difficult to implement in France.

So what are the lessons of this crisis? First of all, the Villepin "take no prisoner" method does not work when it comes to sensitive social issues. Discussions with unions, students and companies would have been useful prior to drafting the law. Another learning our beloved politicians will take from this crisis is that the country is not ready for a reform of the employment system. Therefore, it is likely that no candidate to the upcoming 2007 presidential election will put that in its program and France is going to be stuck with its cumbersome and rigid employment code for the next couple of years.

What the impact of all this? The French financial market barely noticed the crisis and hit a two-year high last week. Indeed, the business community is more focused on the progresses of Suez-GDF, Mittal-Arcelor or Lucent-Alcatel deals. Since most of the large French companies have workforce and business that spread across the world, the impact of social unrest in France was very small. In the international community, France has once again shown an image of rigidity but that should not slow FDI very much. Indeed, foreign companies such as McDonalds thrive in France and the repeal of the CPE will not change much for them (they use CDI, the most generous contract, for more than 80% of their 35,000 workforce).

For the few young French people who do not wish to become civil servants, this might encourage them to expatriate, in particular to the UK. This expatriation is the focus of this article in the Guardian (the one I was interviewed for, but they did not publish any of my comments...). Yet, I believe that's a good thing for France since this expatriate community is learning new skills and will (hopefully) come back to France at some point... Well, may be some of us won't come back but we can still send remittances back to France and support the economy this way... OK it's a joke...

1 Comments:

Blogger k said...

Indeed the coming months should be interesting but not much will happen before the next presidential election in 2007. In the meantime, the big reforms in France will be things such as the smoking ban in all public places... Important as well but may be not critical for unemployment :)

8:49 AM  

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