Unemployment statistics released yesterday are the worst since French Prime Minister Lionel Jospin came to power in June 1997.
Nearly 40,000 French workers lost their jobs in July, an increase of 1.9 per cent. That means more than two million people - 8.9 per cent of the workforce - are now unemployed.
The Employment Minister, Ms Elisabeth Guigou, admitted that the increase was "not a good result", but thinks that French unemployment will drop to 8.7 per cent by the end of the year. She emphasised that France, like all developed countries, is suffering from the economic slowdown, and that thousands of young men are entering the labour market early because the country has just ended conscription.
The employment and health ministers this week reached an agreement with eight trade unions to create 40,000 new jobs in hospitals to offset the advent of the 35-hour working week in the civil service next January. But several of the unions claim that at least 50,000 new hospital employees are needed.
Yesterday's statistics marked the third consecutive month of bad news, after 14,000 workers lost their jobs in May and June.
Most evenings on the television news there are images of protesting workers occupying shut-down factories. The debate on restricting the right to fire - sparked last spring by lay-offs at Danone and Marks & Spencer - is certain to resurface this autumn.
The contrast with 2000, when 428,000 people went off the unemployment register, is devastating for the ruling socialists.
True to character, Mr Jospin did not even try to put a positive spin on the problem when he went on national television this week.
He said economic growth had weakened, the positive effect of the 35-hour working week was behind France and the government had created the hundreds of thousands of "youth jobs" it promised in 1997.
"It is clear that decreases in unemployment will be less significant and that there may be times when it even goes up," he said.
Mr Jospin's entourage are gloomy about his chances of winning next year's presidential election. An opinion poll published by the Journal du Dimanche on August 26th showed that President Jacques Chirac's approval rating rose six points to 60 per cent, while Mr Jospin's fell one point to 48 per cent.
Socialist officials fear that Mr Jospin's pedantic manner alienates the public, and they complain privately that he is not combative enough in fighting Mr Chirac. The Prime Minister's televised reaction to insults levelled at him by the president on Bastille Day was typically mild. "It's true I was a little surprised, and even a little shocked," Mr Jospin said on August 28th. "I didn't expect this kind of criticism of the government on the national holiday . . . It shows one is reaching the limits of cohabitation."
France and Germany's finance ministers and central bank chiefs admitted yesterday that the global slowdown has had more of an impact than expected, undermining their budget and growth targets for this year.
At a news conference following a Franco-German economic council meeting, the French Finance Minister, Mr Laurent Fabius, said growth in 2002 will not match the levels attained in 2000. The German Finance Minister, Mr Hans Eichel, said the effects of the global slowdown mean his growth target of two per cent for this year will "certainly not be reached".