France Surrenders to Itself

French President Jacques Chirac on Monday scrapped a planned youth job law that provoked weeks of protests, in a climbdown opponents celebrated as an unqualified victory.

More here. From the profile France in the 2006 Index of Economic Freedom:

An over-regulated labor market and overly intrusive state remain the biggest drags on France’s economy. France has striven to preserve its statist political economy culture by adopting protectionist trading stances. As a result, growth has remained sluggish (2.1 percent in 2004), the unemployment rate is persistently high, and France has violated the European Union Stability and Growth Pact’s deficit limit for the third year in a row. Some progress, however, has been made. The government has reduced the long-term unemployment benefit cut-off period for workers under age 50 from three years to two and has weakened the 35-hour workweek mandate by allowing employers to offer workers a higher rate of pay for additional hours. In May 2005, the French people voted against the EU constitution. This, plus the anti-capitalist rhetoric of the campaign, makes it appear unlikely that further economic reform will occur in the medium term.

Whole profile here.