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Protests a symbol of French economic dilemma

Strikes swept across France on Tuesday in protest of a new labor law that would end long-cherished employment protections.  NBC News’ Keith Miller reports from Paris on the stark choice facing France: modernize labor practices or face economic stagnation.
French riot police apprehend a youth during clashes at end of protest in Paris
Paris riot police apprehend a youth during clashes at a student and union protest against new laws ending long-cherished employment protections, particularly those affecting young French people. Thierry Roge / Reuters
/ Source: NBC News

PARIS — Students and union members joined together on Tuesday in nationwide strikes that disrupted airline, train and bus services and sent thousands of demonstrators into cities across France.

They were protesting a labor law set to take effect next month that would allow companies to fire employees under 26 without reason within the first two years on the job. Opponents of the measure say the new law will destroy France’s longstanding workplace protections and cause havoc with the nation's culture and lifestyle.

NBC News’ Keith Miller reports from Paris on the underlying dilemma facing France: Will it change in order to compete as a big player in a unified Europe, or will it stick with its old ways and risk becoming a small fry in Europe and the increasingly globalized world economy? 

What are the goals of the protests in France? 
The goal is clearly to repeal this new legislation, which the protesters are absolutely opposed to.

The new law is very simple, but for the French it is very threatening because of their long-standing laws protecting people's jobs. It says that employers have the right to fire, without cause, any employee under the age of 26 for up to two years after being hired. Currently, the law is that after six months of employment you are then essentially employed for life unless the employee has committed some sort of crime or fraud against the company.

So basically the French have enjoyed lifetime employment for decades now — and the French government wants to stop it. The students have gone into revolt and the trade unions have backed them up, and that’s why we’ve got tens of thousands of people on the streets across France today.

It’s sort of a cliché, if you will, to say that the France will protest over anything, but just how significant are these protests we’re seeing?
This demonstration goes beyond the usual public displays of anger against the government. This has hit a very raw nerve in France because the right to employment, the right not to be fired — almost a right to lifetime employment — is part of the social contract here. It is part of the culture.

People here have grown up with this for generations, and now this generation — the ones now in university — feel that they are the ones being made to pay. So the demonstrators are very serious. They have been going on now for three weeks and with each demonstration, it appears that the numbers are growing.

As to whether they will be successful or not, the students certainly are adamant and determined. They say that they will cripple the government, with the help of the unions, unless this law is repealed.

How is this playing out on the political front?
We might see some sort of compromise within the next week or so because the political stakes are enormous.

In particular, Prime Minister Dominique de Villepin is staking much of his 2007 presidential bid on the success of this law being passed and implemented peacefully. [The French political system contains both a president and prime minister, with the president being the directly elected head of state and ultimate leader, and the prime minister, who is elected by members the ruling party in the parliament, running the country on a more day-to-day basis.]

Villepin was clearly hoping to have broad political support when he launched this, but the extent of the opposition and protests from the students and the unions was probably unexpected and has left Villepin politically vulnerable.

If he compromises, he is discredited. And if he carries on, and it leads to even greater social or economic repercussions, he’s to blame. Of course, he also has his enemies within the political establishment here who are already saying that maybe there is room for compromise, or maybe we can nudge a little here or there.

Most of this is political posturing, but clearly the next president of France will win the election because he’s won on this particular issue.

Beyond employment numbers, what is really at stake here?
This is a story being played out on many levels. At the base level, though, is the fact that the French are going to have to reform their social and economic system if they are going to survive in the new world economy.

That is the dilemma and that is why you are seeing so many young people and older unionists on the streets.

This generation of college students here is called the “lost generation.” Unemployment overall here runs at almost 10 percent and even higher among the youth of France — at almost 25 percent. When more than 50 percent of French youth leave university with a degree, they do not believe they will find a job.

The consensus in France right now is that the current college students will not live a lifestyle as good as their parents. There is a belief that this generation coming of age will probably not be as affluent, not as secure, and perhaps not as happy as their parents.

So, there is a lot of pessimism, some amount of fear, and a lot of anxiety about France’s need to reform and how to reform. It’s causing a huge dilemma and upheaval in the country.  Villepin took the first step, and he’s already been cut off at the knees.

In order to compete in a global market, do they really have any alternative but to go with this new proposal?
Other than this new law, there really isn’t a whole lot on the table. Frankly, it’s going to be up to the French in the end to make a decision. Are they going to remain a big country in a unified Europe? Or are they going to be a small country in unified Europe.

Right now, they are still a big player, but they can’t maintain that level. The competition from other European countries such as Britain, which have completely revised their labor laws, is intense. In addition, the countries that are new to the EU have much more liberal labor laws as well as lower wages.

Clearly, if they are going to remain competitive, attract investment and grow as a nation, they are going to have to make reforms. We can see, though, just how difficult it can be to implement those reforms. It is part of the culture here. It's not just an economic law — we are talking about a social and cultural transformation which the French are clearly not prepared to make.