Not unexpectedly, the controversial labor reform law (CPE) has been taken off the table by French president Jacques Chirac. The immediate political fall-out will be very negative for the already bruised and battered president who has only about a year left in office. And for his prime minister, Dominique de Villepin, the man who attached his whole political weight to a piece of legislation crucial in reducing long-term youth unemployment in a struggling economy, the damage appears to be irreparable. And that opens up the route to claim the leadership of France’s right to Nicholas Sarkozy which in the long run may be a very good thing. In the short run however this is bad news all way around, not just for France, but for Europe too.
