Balladur drops low-pay scheme

Edouard Balladur, the French Prime Minister, yesterday withdrew his controversial plan to allow employers to pay young workers less than the legal minimum wage.

The decision to back down, in the face of student demonstrations which have often turned violent over the past month, was sure to be interpreted as a sign of weakness or at least an example of poor communication by opponents of the Gaullist Prime Minister who marked his first anniversary in office yesterday.

Perhaps worst of all, it appeared to do nothing to discourage a demonstration planned for Paris today. One students' union hailed Mr Balladur's decision to withdraw the Contrat d'Insertion Professionnelle (CIP) as 'a victory' and organisers of the march said it would go ahead.

In January, although a measure to allow more state funding to private schools was outlawed by the Constitutional Court and withdrawn, an estimated 600,000 protesters still assembled to march through Paris three days later.

The government, in a five-year labour law presented at the end of last year, had proposed cutting the minimum wage, the Smic, by 20 per cent for young workers to encourage employers to take on more youngsters. France has a staggering 23 per cent unemployment rate among the under-26-year-olds.

The measure, however, was poorly presented and misunderstood among the young who, encouraged by the main trade unions, saw it as a way of devaluing their worth on the marketplace, not as a means of giving them a chance to find their all-important first job.

Mr Balladur is reported to be furious with Michel Giraud, the Gaullist Labour Minister, for not co-ordinating the campaign for the measure well enough.

The government announcement yesterday said that employers would still get incentives to employ youth, including a 1,000-franc ( pounds 120) subsidy a month for every young worker given a first job and employed for at least 18 months.

The principle of backing down in the face of pressure has become something of a trademark for the Balladur government. Apart from the schools issue in January, the government also withdrew a plan to re-structure Air France, including redundancies, after ground staff invaded Paris runways and paralysed air traffic.

Then the government was conciliatory towards fishermen who had indulged in extraordinary violence, smashing up the fish hall at the Rungis markets south of Paris and fighting police in a pitched battle in the Breton city of Rennes.