French controversial labour law ‘dead and buried’

French Prime minister Dominique de Villepin announced in a public address on the morning of 10 April 2006 the withdrawal of the contrat première embauche (CPE).

The withdrawal came after more than ten weeks of protests, which were carried by the students’ movement and trade unions and marked the biggest crisis since Mr. Villepin took over as prime minister in May 2005. It is seen as a defeat for Mr. Villepin himself, who was personally committed to the law project. 

The draft law would have allowed for easier firing of workers aged 26 and under, cushioned by easier access to unemployment benefits. 

The decision to scrap the law was made at a high-level meeting in the Élysée palace involving President Jacques Chirac and Mr Villepin, who were then joined by Mr. Villepin’s rival candidate to follow up Mr Chirac in the next presidential elections, Minister of the interior Nicolas Sarkozy, three more ministers and high-rank politicians of the governing conservative UMP party. Details were going to be explained by Mr. Chirac in a TV broadcast on the evening of 10 April. 

In a press release  issued by the Élysée palace, it said: “Following a proposal by the Prime minister and having heard the presidents of the parliamentary groups and the majority leaders, the President has taken the decision to replace  article 8 of the Law on equal chances by a provision in favour of easier entry into the labour market for young people in distress.” Dominique Paillé, a member of Parliament with the UMP, added that article 8 “will most likely be re-drafted not to mention the CPE any more”. 

The withdrawal illustrates the challenges European governments face to implement radical labour reforms connected to the EU’s Lisbon agenda.

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