French inch toward social reform

Slumped on a bench outside the unemployment office, folding and unfolding a slip of official paper that testifies to another fruitless visit, Fremo is bitter.

He won't give his full name; a young out-of-work man of Arab origin, he prefers his anonymity. But he is blunt. "They do nothing to help," he complains, jerking a thumb toward the job center. "They ring me every six months to check that I'm looking for work, and that's it.

"I'd love them to find me a job," he adds. "But there are three million people like me in France who'd love them to find them a job. We've been sacrificed."

After more than two decades of jobless rates hovering stubbornly around 10 percent, France's chronic unemployment crisis "is the one big problem with the French social model," says John Martin, a senior official with the Organization for Economic Cooperation and Development. "If a social model should deliver a satisfactory labor market," says Mr. Martin, as European leaders gather outside London for talks about how to adjust their economies and social benefits, "this one has failed dismally for the best part of three decades."

Indeed, 68 percent of the French public said last month that their social safety net was broken. But they are divided over what to do about it.

Many are angry at what they see as hectoring from European Union leaders who have been urging big European nations such as France and Germany to apply free-market remedies (also known as the Anglo-Saxon model) to their flagging economies. And the French rejection last May of a putative European constitution - seen as paving the way for a more competitive, less comfortable Europe - was due in part to a reluctance to relax protective regulations and trim the welfare state.

But in executive suites and even on factory floors around the country, others recognize that global competition is already forcing change upon France. And they're not waiting for the government to refurbish the social model.

Christian Dumas, for example, sees a new competitive attitude that's boosting productivity in his own business. It may be the only thing keeping his small firm, and thousands of French firms like it, alive.

Mr. Dumas runs the family-owned firm making quilts and pillows that his grandfather founded outside Tonnerre, in northern Burgundy, more than 50 years ago. The business has grown, allowing Dumas and his 45 employees to prosper, but in recent months they have been feeling the heat of international competition.

First, eight low-wage eastern European countries entered the European Union last year; then the EU ended quotas on imports of Chinese textiles used in making quilts and pillows.

"We are up against terrible competition," says Dumas. "I told my people that either we give up, and the company goes under in two or three years, or we face the challenge, which means every single employee increases his productivity, and we all improve the quality of our goods. They were absolutely with me."

Dumas says he has "seen a change in mentality." "People realize that jobs are leaving France, and they are ready now to question themselves and the way that they work." Dumas says his workers are willing to find new, more efficient ways to do their jobs, allowing the business to prosper - without benefit or wage cuts.

But observers here question whether the country's leaders - or the public as a whole - are similarly willing to adjust.

President Jacques Chirac, adept at feeling the national pulse, lashed out earlier this year at US-style unregulated capitalism as "the communism of our new century."

"The French won't change just because they are told that change is inevitable," says Marjorie Jouen, an analyst with the Paris based pro-European think tank Notre Europe. "Recognizing that there is a crisis does not put people in the mood for reform unless someone offers a project to motivate us."

"We are in a crisis today because the practical consensus between the left and the right, linking economic efficiency with social protection, has broken down," says French philosopher and writer André Glucksmann.

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