A defining moment for the Jospin government is the national conference on jobs that opened last Friday. The negotiations between trade unions, the employers' association and the government are aimed at triggering a breakthrough on unemployment. The French jobless rate is about 12.5 percent, although it is much higher among youth. For public opinion, this statistic has become the main symbol of the country's economic malaise. A plan to create 350,000 entry-level jobs in the public sector defied conventional economic wisdom but addressed the pessimism of a middle class which fears that its children will no longer be able to find secure employment.
Many French managers say the real barrier to job creation is the difficulty of laying off workers.
Mr. Jospin has pledged that he wants to restore a law requiring prior government approval for any layoffs. ''Even if you could afford the buyouts, the process takes so long that your executives have no time left to do business,'' said an executive in a privately owned insurance company. Deregulating the labor market is essentially up to Martine Aubry, the employment minister. Meanwhile, Finance Minister Dominique Strauss-Kahn has two priority assignments. One is the French budget, which he has successfully crafted to keep France on track for the single European currency. The other is privatization.