Chirac to back job law in address to France

Paris, Mar 31: French President Jacques Chirac was expected to use an address to the nation today to back a youth job law that has driven millions onto the streets in protest, rather than sacrifice the law and his prime minister.

A top court, the Constitutional Council, on Thursday dismissed legal challenges to the CPE First Job Contract, putting the ball firmly back in the politicians' court.

Intense speculation swirled around Chirac's intentions but parliamentary sources said they expected the president to announce he would sign the measure into law before explaining his decision on television at 2330 hrs ist.

Aides told the Le Parisien newspaper the 73-year-old leader had opted to sign the law rather than lose conservative Prime Minister Dominique de Villepin, who is widely reported to have threatened to quit if Chirac backed down over the measure.

''There can be no question of calling into question a law that has been voted by parliament,'' one Chirac advisor told the newspaper.

Villepin aides, however, denied he had threatened to resign.

If he signs, Chirac is likely to face more protests. If he withdraws the law, he could lose Villepin, a long-time ally seen as the man he would like eventually to succeed him.

Unions and students have vowed to continue their protests if the government presses on with the CPE, which aims to encourage firms to hire workers by allowing them to fire employees aged under 26 without stating a reason during a 2-year trial period.

''The president knows the trade unions' attitude. He knows the frustrations of many youths,'' opposition Socialist party leader Francois Hollande told RTL radio.

Making clear he thought Chirac would sign the law, he said: ''Do you think the many students and workers who have been fighting against this text for months ... will understand the president's decision? Do you think that will be a factor of appeasement, a solution for the country?''

VILLEPIN'S FUTURE IN THE BALANCE

If Chirac withdraws the law, he stands a bigger chance of halting the protests that have swept France and sometimes turned violent in the past few weeks.

But such a move would undermine Villepin, who has fiercely defended the law and made it a centrepiece of his efforts to cut youth unemployment.

Business leaders fear France's image will be damaged if protests continue and that investment and tourism could suffer, particularly because the crisis has erupted so soon after rioting by angry youths in French city suburbs late last year.

New figures yesterday showed the February unemployment rate stuck at 9.6 per cent, one of the highest rates in Europe.

Joblessness among under 25-year-olds fell slightly from just below 23 per cent to 22.2 per cent.

Chirac has repeatedly backed Villepin over the CPE. But the protests have left Villepin's future in the balance and a climbdown on the law could sink his hopes of running in next year's presidential election.

The contract has caused divisions within the ruling UMP party, headed by Interior Minister Nicolas Sarkozy, a likely rival to Villepin in the 2007 presidential race -- when Chirac is not expected to seek a third term.

The UMP parliamentary group on Tuesday backed Sarkozy's proposal that the government should not rush to enforce the law.

Student demonstrators and unions have urged Chirac to send the law back to parliament -- stripped of the CPE articles that were attached to it.

Unions have called new protests and strikes next Tuesday and have warned the government that millions more will turn out unless Chirac changes the law.

REUTERS