Strike threat over French plan to relax labour laws

A €4.5bn plan by the new French Prime Minister, Dominique de Villepin, to put France back to work has provoked union calls for strikes and street protests.

The hardline CGT trades union federation led the protests against M. de Villepin's "plan of action for jobs", especially a decision to allow small businesses to hire new workers on two-year temporary contracts.

The CGT called on other unions to join strikes and street protests on 21 June.

Employers' groups gave the Villepin plan faint praise as a first step towards simpifying the complex laws which govern hiring and firing in France. Left-wing politicians protested that the Prime Minister was trying to buy jobs at the expense of time-honoured French commitments to security of employment.

M. de Villepin's plan blends state interventionism and liberalisation in an attempt to reduce the 10 per cent rate of unemployment without provoking social unrest or breaching budgetary limits.

The Prime Minister said he intended to tackle the sources of the "anger and distress" which led France to reject the proposed EU constitution 10 days ago.

He also signalled French intentions to push for a commercial "fortress Europe" - a policy of "EU preference" to protect industry from Asian competition.

Small businesses complain that they face a labyrinth of administrative obstacles to hiring, and firing, workers. To encourage them to recruit, they will now be able to employ people for up to two years without having to fulfil the normal obligations of the French "work code". Unions fear the principle could be extended to all work contracts.