Ruling party sidelines French PM as jobs row hardens

PARIS - Senior figures in France's conservative party put out compromise feelers to students and unions over a controversial youth jobs law on Sunday, pushing to the sidelines the prime minister who introduced the measure.

Leaders of the ruling Union for a Popular Movement (UMP) appointed emissaries to talk to union and student leaders who have called a new national one-day stoppage and street protests on Tuesday to demand withdrawal of the First Job Contract (CPE).

Leading French trade unions and student organizations called on workers at train stations and airports to go on strike on April 4, threatening another day of paralysis on the country's transport system following a similar demonstration last week.

The CPE, launched by Prime Minister Dominique de Villepin as a way to promote hiring by allowing employers to summarily fire employees under 26 within two years, became law on Sunday.

But in an attempt to quell two months of sometimes-violent protests that have evoked memories of last autumn's riots in poor suburbs, President Jacques Chirac said on Friday that no CPE contracts should be signed until the law had been softened.

UMP deputy Dominique Paille said UMP leaders in the two chambers of parliament would "engage in dialogue and negotiations with the unions ... without taboos".

Paille is close to Interior Minister Nicolas Sarkozy -- the tough-talking head of the UMP -- and the increased role of the party is a new twist in an undeclared battle between Villepin and Sarkozy to lead the right in the next presidential election.

Chirac's speech on Friday appeared to be aimed at keeping Villepin, his protege, in his post while deflating Tuesday's day of protest with an offer of compromise.

But the angry union response to Chirac's address, and a poll indicating that 62 per cent of the large audience who watched it were unconvinced, suggest a crisis that brought over a million onto the streets last month will rumble on.

Francois Bayrou, head of the centrist UDF party, told French TV station LCI that the government's decision to proceed with the job reform was undemocratic.

The unions and students have rejected any talks on a "CPE-lite" and reaffirmed their demand that it be scrapped.

As a carrot, Sarkozy allies hint that the UMP is ready to go beyond the compromise Chirac offered on Friday of halving the trial period and forcing employers to justify dismissal.

The unions have responded by saying they would now be talking to the UMP rather than Villepin's government.

"It's clear now that our interlocutor will no longer be the prime minister but UMP deputies whose boss ... is Mr Sarkozy," CFDT union leader Francois Chereque told France Inter radio.

Critics say the CPE will lead to a culture of cheap "throwaway jobs", while for Villepin it is a key tool in reducing youth unemployment of 22 per cent.

Sarkozy, who has been critical of Villepin's tactics and concerned the crisis could turn voters off from his presidential campaign for major reform in France, said he had already been in touch with key union leaders and student representatives.

"They are ready to open discussions without taboos on the CPE," the daily Le Parisien quoted him as saying.

The role of industrial relations mediator is an unlikely one for Sarkozy, who was widely accused of fuelling last autumn's riots with tough rhetoric.

But the softly-softly approach appears to have earned him support. A TNS-Sofres survey on Saturday indicated he was the most popular politician on the right, his approval rating up four points to 48 per cent.

- REUTERS