Barroso backs French labour reforms

His statements come as pressure on the French government is heating up after the country's trade unions announced Monday night as an ultimatum date for the cabinet to withdraw the controversial "first employment contract" or face a possible general strike.

The legislation is viewed by its opponents as a way for employers to exploit young people as it would allow them to fire under-26 year olds without any warning during a two-year period.

French prime minister Dominique de Villepin argues that more flexible regulation would help reduce the jobless rate among the youth, currently standing at 20 percent among 18-to-25-year-olds.

Mr de Villepin indicated on Monday he would not shelve the bill - passed by the French parliament earlier this month and awaiting the signature of president Jacques Chirac before it comes into force.

Flexicurity praised in Brussels

The French youth labour law is one of several measures introduced by the current centre-right government in a bid to make the country's labour market more flexible.

Last year, Paris pushed forward a revision of the 35-hour working week, paving the way for private sector employees to work longer hours if they wish to.

However, according to the CER scoreboard, which compares member states’ progress in making Europe's economy more competitive, France and most other EU countries have still done little to make it easier for companies to hire and fire workers.

As a result, their labour market policies "risk creating an 'insider-outsider' split: they heavily protect people in standard, full-time employment but discourage the hiring of new workers and increase the insecurity of marginalized outsiders."

By contrast, Denmark and Sweden have been praised for their approach - dubbed "flexicurity" - which combines liberal hiring and firing rules with generous unemployment benefits and active job search assistance or retraining facilities.

The same concept is set to be analysed for the needs of other EU member states, in a report the commission will publish in the first half of 2006.

And the idea has also been floated in the draft conclusions of the EU leaders' summit starting on Thursday (24 March), seen by EUobserver.

The draft document urges member states "to pursue, in accordance with their individual labour market situations, reforms in labour market and social policies under an integrated flexicurity-approach, adequately adapted to specific institutional environments and taking into account labour market segmentation."

"These principles could be a useful reference in achieving more open and responsive labour markets and more productive workplaces", say the draft conclusions.