By Katrin Bennhold International Herald Tribune

WEDNESDAY, MARCH 8, 2006

PARIS Prime Minister Dominique de Villepin, who has staked his presidential ambitions on reducing joblessness, faced his toughest test yet Tuesday as tens of thousands of students and union members across France braved the rain and cold and marched to protest a youth employment plan.

Villepin has seen his approval ratings crumble over the last two months as opposition to a new work contract for young people has grown.

The measure, which allows employers to lay off workers more easily, has come to symbolize the threat to France's revered social model and eroded confidence in a prime minister who has branded himself as a defender of that model.

Fourteen months ahead of presidential elections, Villepin's problems have emboldened the Socialist opposition and may prove a boon to Villepin's chief rival on the center-right, Interior Minister Nicolas Sarkozy.

The demonstrations, which disrupted air travel and public transport in some areas, occurred as the government was juggling a patchwork of political crises, from spreading bird flu to concerns about resurgent anti-Semitism after the torture and murder of a young Jewish man.

Even the merger of Suez, a water, electricity and waste company, with Gaz de France has entered the laundry list of complaints - not because of the allegations of protectionism that have prompted criticism abroad, but because it effectively privatizes the state-controlled gas company.

Among the placard-carrying students, power workers could be spotted protesting against what they call a privatization on the sly.

But the government's attempts to shake up the labor market are proving the greatest challenge.

Villepin's approval rating, which climbed to a high of 45 percent at the end of last year, has slumped to 34 percent this month, a record low for him, according to a monthly opinion poll by the Sofres institute. The downward movement appears to have been set off by the first mention of the new contract on Jan. 16.

The measure allows employers to lay off workers under the age of 26 with no justification during the first two years. A similar contract was signed into law for companies with fewer than 20 employees. It is also the centerpiece of the government's attempt to reduce France's chronic youth unemployment; at 22.2 percent, the jobless rate among young workers is more than twice as high as the national average of 9.6 percent.

But 62 percent of the French oppose the new measure, a proportion that rises to 77 percent for the age group concerned.

According to preliminary police estimates, nearly 400,000 people marched in several cities, including Marseille, Bordeaux, Rennes and Grenoble, a turnout that was at least twice as high as during similar protests last month.

"We are not going to let the right of companies to fire at the snap of a finger become entrenched in French law," Bernard Thibault, head of the CGT, the second-largest labor union in the country, said. "We are not going to let France operate under the same rules as the socially most backward countries."

The Socialist Party has been quick to join labor unions in their opposition. Laurent Fabius, a former prime minister and one of many presidential hopefuls on the left, pledged to withdraw the measure if the Socialists are elected next year.

"That will be the first thing we get rid off," he said.

Jean-Marc Ayrault, leader of the Socialist group in the National Assembly, challenged Villepin on Tuesday to withdraw the legislation.

"The question is simple: Are you going to listen to the French people?" Ayrault asked him during parliamentary question time.

Villepin shot back that France must change in a changing world.

"For 20 years now, insecurity has been the daily reality for many young people in our country," he said. "I refuse to do nothing."

Since last year's riots, which took place in immigrant suburbs with jobless rates that sometimes reach 40 percent, the question of lowering unemployment has become a national debate. While the French press has been noticeably more open to the idea of introducing more flexibility in the labor market, many commentators have been critical of Villepin's method of pushing through his reform measures.

The prime minister forced the first contract for small companies through by decree last August. He then pushed the legislation for young workers through the lower house of Parliament with a special procedure that cuts short the debate, further angering critics.

"How can we not look for solutions when all our public programs have proven insufficient? Everywhere in Europe they have been replaced by policies that make the labor market more flexible," the left-leaning newspaper Le Monde said in its editorial on Tuesday. "But the prime minister has chosen hastiness in his bid to appear presidential. At his own expense."