Legendary. That is how we will remember Jacque Chirac’s ability to capitulate when the political waters get a little rough.

France needs political changes to address economic problems that will continue to relegate the nation to a second-rate economic power for the foreseeable future. Perpetual double-digit unemployment, lack of innovation, and the inability to compete on an international scale with the healthier economies are all hallmarks of the restrictive, self-destructive rules placed on French companies by their own government. It’s kind of a lesson in the damage that an unfreemarket can do to an economy.

A small change in labor laws might have made it easier for companies to create jobs for France’s chronically unemployed youth.

[T]he First Employment Contract, known by its French acronym as the CPE, in order to curb youth unemployment, which is at 22 percent. It would have given businesses, who say that the country’s tough labor protections are a disincentive to hiring, the right to fire workers younger than 26 for any reason.

But when Chirac is leading the charge, defeat can never be far behind.

Instead of staying strong on the issue and continuing to explain why the country’s political processes couldn’t be hijacked by rioting students, Chirac has sounded the quick retreat.

French President Jacques Chirac announced today that a contested labor law would be taken off the books, handing a victory to student groups and labor unions who have demonstrated in the millions in recent weeks to have the measure scrapped.

The announcement is a blow for Prime Minister Dominique de Villepin, the chief architect of the law, who until late last week still categorically ruled out dropping the legislation. It comes only eight days after Mr. Chirac had formally enacted the legislation, albeit with promises of a speedy revision and far-reaching modifications.

To be sure, that portion of the law wouldn’t have solved France’s woes. It was a step in the right direction, though.

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