After weeks of protests by youth and union members in Paris and other cities, the French government has abandoned a job law that would make it easier for businesses to hire, and fire, young workers.
President Jacques Chirac announced the decision earlier this week, but ultimately it was the country's Prime Minister Dominique de Villepin who bowed to pressure and decided to scrap the law.
De Villepin addressed the nation to express his regret over the failure of the law and announced that new measures were being presented to parliament. The government will introduce a new policy, not a new law, that will directly help disadvantaged youth.
The now-defunct "first job contract" law would have allowed employers to fire anyone under the age of 26 without cause, and without notice or severance, within the first two years of employment.
The government said the law would encourage firms to hire more young people. This in turn would have eased the crisis of high unemployment among young people, which sits at 26 per cent nationally and has high as 50 per cent in some suburbs.
However, millions of youth and union members denounced the law as unconstitutional and took to the streets in protest, often clashing with police. The crisis is estimated to have cost the country's economy about 150 euros ($208 million).
Under France's current employment laws it is very difficult to fire an employee and dismissals are subject to stringent, procedural restraints.