Chirac is issued with ultimatum over youth jobs law

Negotiations began yesterday to resolve France's youth jobs law crisis but there was no sign of a rapid or easy settlement. With many universities blocked by the protests, exams looming and further strikes threatened, the government is desperately searching for a way to defuse the tension.

The centre-right government has already made it clear that it is prepared to amend - almost to the point of oblivion - a new easy-hire, easy-fire contract for the under-26s.

But with presidential elections 12 months away, the centre-right is rancorously divided on how much more ground it can publicly concede to student and trade-union protesters. Protest leaders made it clear, meanwhile, in a firmly worded statement, that they would accept only a complete and public climb-down by the government.

Even before talks with centre-right leaders began yesterday afternoon, a meeting of the 12 union and student federations issued a statement giving the government until 17 April to scrap the jobs contract.

If the government failed to meet this deadline, the unions and students warned, there would be more strikes and demonstrations. Student leaders also called for an intensification of campus blockages and more of the wildcat actions in which young people have blocked roads and railway lines.

In the first round of negotiations between ministers and parliamentary leaders, little progress was made. The government representatives put no new ideas on the table. They simply listened to the arguments of the union and student leaders, invited one by one to talks at the Senat, the upper house of the French parliament.

Some government figures - including its number two, Nicolas Sarkozy - have made it clear they would be content to sweep the table of the vexatious "CPE" law and start again. The Prime Minister, Dominique de Villepin, has said privately, however, that he will resign rather than completely disavow a law which he has vociferously championed as essential to the heath of the French economy.

At a press conference yesterday, M. de Villepin appeared to hint once again at resignation. He said he would "draw the appropriate conclusions" from the progress of the negotiations. Parliamentary supporters of M. de Villepin said there was no question of the jobs contract being abandoned.

The negotiations - requested in a nationwide address by President Jacques Chirac - were intended to "enrich" and "clarify" the law, not to bury it, they said.

The Union pour un Mouvement Populaire, the main centre-right party, is, however, deeply divided on this question. The majority - supporters of M. Sarkozy - would be content to see the back of the CPE (and for that matter M. Villepin). Many, loyal to President Chirac and the Prime Minister, are refusing to hand the left such a dramatic and public victory. There does not appear to be any room for a compromise between the two positions. Optimistic sources close to M. Sarkozy think the problem is largely "semantic". If a new law could be framed which removes union and student concerns - and probably the CPE title - it may be possible to persuade M. Chirac and M. de Villepin to cut their losses.

President Chirac had hoped his partial retreat last Friday would break the momentum of opposition. However, an estimated 2,000,000 people took to the streets earlier this week to call for the abolition of the jobs contract. The law would allow employers to hire people under 26 and fire them in their first two years without explanation.