France to scrap divisive youth jobs law

President Jacques Chirac announced plans today to replace an employment law that triggered massive protests and strikes across France, bowing to intense pressure from students and unions and dealing a blow to his loyal premier.

Chirac's office said a new plan focusing on youths from troubled backgrounds will replace the "first job contract," which would have made it easier for employers to fire any worker aged under 26.

The move comes as a blow to Prime Minister Dominique de Villepin, who championed the contract despite weeks of protests - at times violent - across the country. Villepin was to make a statement later today.

The new plan emerged after talks last week between unions and leading lawmakers from Chirac's ruling conservative party. It was not immediately clear how unions and student groups would respond.

Acting on a proposal from Villepin, his longtime protege, Chirac "decided to replace" a key provision of the law with a measure aimed at "youths in difficulty," a statement from Chirac's office said.

The conservative government has pushed the law as a way to reduce sky-high unemployment among French youths, but opponents fear it will cut into coveted job security in France.

Chirac enacted the law earlier this month, but immediately suspended it to give ruling conservative lawmakers the chance to meet with unions and look for a way out of the crisis.

Unions were expected to make their own announcement today about whether to stage more of the protests and strikes that have shut down universities and tangled traffic in recent weeks - and cast a shadow on what is likely to be Chirac's last year in office.