French PM in battle of wills over youth jobs law

PARIS, Mar 27 (Reuters) Hundreds of thousands of people are expected to take part in a national strike in France tomorrow in a trial of strength for Prime Minister Dominique de Villepin over his flagship youth job contract.

Commuters face travel chaos from late today in response to strike calls by unions and students who say the CPE First Job Contract will create a generation of throwaway workers and will fail in its aim of reducing high unemployment among youngsters.

Unions say 135 demonstrations are planned after the failure of attempts to break the deadlock in talks between Villepin and union bosses. Air and rail travel are likely to be badly hit.

''There will be a strong turnout, with a lot of work stoppages in the public and private sectors, and there will be very large demonstrations,'' one trades union leader, Jean-Claude Mailly, told France 2 television today.

Mass street demonstrations are closely watched in France after protests over pensions reforms in 1995 which were widely credited with causing the conservatives to lose snap elections called two years later -- in part on Villepin's advice.

Fears of a broader revolt have been fuelled by incidents in central Paris last week of looting, clashes with riot police and the mugging of student demonstrators by hardcore elements in scenes reminiscent of riots in poor suburbs last year.

French commentators say the mass demonstrations and the risk of violence provide Villepin with the biggest test of his 300 days in office. His pledge to restore the nation's confidence within 100 days of taking office last May has proved empty.

''The Week That Could Change Everything'' yelled the front page of the daily Le Parisien newspaper.

THATCHERITE FANTASY? The left-leaning Liberation drew parallels between Villepin's refusal to give ground and former British leader Margaret Thatcher, who broke the power of unions by defeating a year-long miners' strike in 1984.

''One could ask oneself if the fantasy behind Villepin's policy is not of the Thatcherite type -- to smash union power, to show how pointless demonstrations are and to finish with (the power of) 'the street','' Liberation wrote.

Radical free-market policies are deeply unpopular with French voters and are risky for any leader who espouses them.

Unemployment stands at 9.6 per cent of the workforce and at 23 percent among young people. Critics say the new contract will increase job insecurity because it lets bosses fire workers aged under 26 without explanation during a two-year trial period.

The CPE has opened deep rifts within the ruling Union for a Popular Movement (UMP) whose leader Nicolas Sarkozy, the ambitious interior minister, was expected to distance himself from Villepin again in a policy speech late today.

At the weekend he expressed support for Villepin but urged compromise. Sarkozy fears the protests could hurt his own chances of success in a 2007 presidential election on a platform based on a radical break with the past.

Some political analysts say Villepin is using the crisis to try to overtake Sarkozy as the conservatives' champion. A poll in Monday's Le Monde newspaper showed 74 per cent support among UMP voters for Villepin's stand.

Tomorrow's turnout could prove decisive in the turn of events although a ruling expected on Thursday by the Constitutional Council is also eagerly awaited.

Experts say the body could get the government off the hook by sending the law back to parliament for changes but say it is unlikely to simply strike down the measure.

Reuters SY RN1549