France Sacks Youth Labor Law

France Sacks Youth Labor Law: The government has withdrawn the law that caused months of protests. But what happens now to an economy that's still in need of reform?

"President Jacques Chirac pretty much sealed the fate of his country by yanking a modest attempt to allow employers some say over who they employ. The youth-employment law that had sparked riots in the streets was a necessary step away from a functionally socialized labor market in France. Without reform the country is doomed to high underemployment, high taxes, and eventual collapse.

There is a line of thinking which holds that Interior Minister Nicolas Sarkozy can double back and fix all this once he wins the spring 2007 elections. But the minute Sarkozy articulates any sort of economic reform he will be set upon by the same forces that stopped a mild reform that would have allowed employers to hire and fire young employees at will.

This means that 2008 is the earliest that France will even begin to consider vital reforms to its job-killing regulations, and it will be a tough fight at that. Time is running out."